Scranton Pennsylvania out of money and are battling over raising property taxes 78% to meet their pension and payroll obligations. The city of San Bernadino California has only $150,000 in the bank and is about to declare bankruptcy, joining other cities like Stockton, Harrisburg PA, Mamoth Lakes California and Central Fall, RI. What is the root cause of this and in so many other cities: out of control employee benefit plans. St. Petersburg is no different. In fact, the problem of out of control pensions is so bad that retired workers make more on average than active employed citizen workers! That’s right, people that stopped working for the city between age 50 and 60 and do not actually perform a service for the city, earn more monthly on average than active city workers! (continued below…)
If you want the City to change its spending patterns and want to stop
a $10 million tax hike, you need to show up at the city council meeting tomorrow at 8:30 a.m. at 175 5th St N, or email Council members and the Mayor at firstname.lastname@example.org and Mayor@stpete.org to tell them no new taxes! Cut Spending!
The total amount being paid out every year – to retired workers only – is $52,238,355. The total annual payroll for the city in 2011 was $101 million. The city is thus paying out just over half as much in pension benefits to 1,131 retired workers as it pays to its 3100 full-time and part-time workers in 2011. The average payout to active full time and part time workers (salary only) was $32,600 while retired workers received $46,187 per year. These salaries are in addition to health and other benefits (The city spent over $40 million on health benefits for retired workers in 2011)! Thus the retired worker is earning more every year than the current full time city worker – about $14,000 more on average!
The Sun Beam times previously analyzed the rising pension costs over the last five years. The city spent $52 million on pension costs in 2011 and only $36.5 million in 2006. The city also has increasing health insurance costs for retirees with a $177 million unfunded liability. The city continues to spend more money every year on health benefits for 3500 government workers, rather than working to control these costs (yes, they spend more on retired worker health benefits than on active worker health benefits!). Yet the City refuses to address these problems. Citizens have been asking the city to control pension costs since the property tax boom was peaking starting in 2006. Yet heads were buried in the sand and now we are at the point of raising taxes $10 million. But soon, there will be no amount of tax hikes that will solve this problem. It is time for the St. Petersburg city leaders to get serious and sit down with the unions and renegotiate benefit plans to sustainable models. That is the best way to protect the actual retirees from bankruptcy and scenarios like scene in Scranton. It is also the best and most moral way to protect the taxpayers and keep our city a quality place to live for everyone, not just the political class.