Raise the sales tax rate to fund the pension?

Memphis Bridge in Money

MEMPHIS, Tenn. — Sources tell WREG-TV the heads of the fire and police associations in Memphis have proposed raising the city sales tax to restore full healthcare benefits.

The head of the Memphis Fire Association however told WREG that is not something that will go forward and be proposed to the public.

Current city employees and some retirees will pay 24% more for healthcare, while some retirees will lose their entire insurance subsidy.

We are told there has been a proposal for a tax hike by half a cent to 9.75%.

That rate would put Memphis equal with several surrounding municipalities which raised their sales tax to fund new schools.

If the proposal were to moved forward, voters would have to approve it.

There are estimates the hike could raise more than $45 million per year.

A similar change in the sales tax, to fund pre-k, was defeated last November.

The Segal Company, a human resources consulting firm, found the city pension is underfunded by $467 million.

That contradicts a report commissioned by the firefighters union which put the number at $301 million and a report done by PricewaterhouseCoopers which put it at $682 million.

As of July 1, the State of Tennessee requires local governments to contribute 100% of the cost, determined by outside agencies, needed to keep their pension funded.

 

 

17 comments

  • langor1

    And when the money from the increase is squandered what then? There just can’t be a non-ending, continual cycle of % tax increases based on government inability to manage itself fiscally.

    • Christina

      Right. Why can’t this City manage the budget with what we have? Quantity of tax dollars is not the issue. Prioritizing allocations is the issue.

      • Gonebabygone

        The sales tax increase failed when it was vaguely linked to education. If they vaguely link an increase to funding benefits, it will fail again. The citizens here do not have faith that these people will spend it on what they claim is the reason for needing the increase. If they specifically allocate it to benefits, more property owners may back it because it spreads the burden to everyone who spends money here whether or not they own property. If they merely infer to like they did with pre-k funding, it doesn’t have a chance.

        Another thing, it isn’t the people having to make decisions on what to cut that people should be concerned with. It is the ones staying silent to preserve their image to keep from angering their voter base that need to go. If they had come up and out with some ideas on what to cut and reallocate, the benefits might have never been touched. They’ll be the first to vote to send money to their pet projects and the last to speak about how to cover the expense. Fiscal irresponsibility for the sake of votes has to stop.

    • Get Informed

      Collierville just passed the same exact increase. The taxes will be the same as Collierville. Your talking about a quarter on a 50.00 purchase to fix a very crippled Memphis economy and help literally thousands of first responders families not go bankrupt. They are talking about making elderly and disabled police pay , not the 366 a month for insurance they were guaranteed for 30 years , but 1600 a month. That is many city employees entire pension plus some and they don”t get social security. Most will have nothing and many will lose everything including their homes. Am I happy with our policitians? NO! But be mad at the right people, not police and firemen. This tax will save thousands of police and firemen from financial ruin. Pass this and then go after the politicians that created this horrible situation with a vengeance. This whole mess is destroying your police and fire departments. I hear nearly all the Ohio paramedics, as many as 200, that Memphis pleaded with to come here and paid them 10k dollar moving bonus each due to utter desperation, is moving back because of how badly they have been treated. It takes as much as a year to hire a fireman and then as many as 2 years or more to get that fireman to paramedic. I strongly believe we will be desperately short of paramedics again when this happens. The police are already leaving in droves. The numbers I saw were in 2011 we had 2800 police personnel.I am told it is now around 2200 and shrinking daily. A friend just told me minutes ago 4 quit this week and some retired.Austin and Aurora and Dallas and Nashville are recruiting heavily here and they are cherry picking the best of the best because they have far better pay and benefits. Look them up they are online. See for yourself. It matters who you have as fire and police. Who do you want investigating homicides and rapes and horrible crimes against children? Help the police and firemen. Change the politicians.

      • Memphis Has Fallen

        Vote the politician’s out FIRST! Only then will I embrace a tax increase. Otherwise, we will be in the same predicament. Memphians have proven over and over again that they will continually vote idiots into office. I have little faith in Memphis voters. Get them out FIRST, so that they won’t steal or misappropriate the money from the tax increases that you are suggesting. Get them out FIRST.

    • Get Informed

      Collierville just passed the same exact increase. The taxes will be the same as Collierville. Your talking about a quarter on a 50.00 purchase to fix a very crippled Memphis economy and help literally thousands of first responders families not go bankrupt. They are talking about making elderly and disabled police pay , not the 366 a month for insurance they were guaranteed for 30 years , but 1600 a month. That is many city employees entire pension plus some and they don”t get social security. Most will have nothing and many will lose everything including their homes. Am I happy with our policitians? NO! But be mad at the right people, not police and firemen. This tax will save thousands of police and firemen from financial ruin. Pass this and then go after the politicians that created this horrible situation with a vengeance. This whole mess is destroying your police and fire departments. I hear nearly all the Ohio paramedics, as many as 200, that Memphis pleaded with to come here and paid them 10k dollar moving bonus each due to utter desperation, is moving back because of how badly they have been treated. It takes as much as a year to hire a fireman and then as many as 2 years or more to get that fireman to paramedic. I strongly believe we will be desperately short of paramedics again when this happens. The police are already leaving in droves. The numbers I saw were in 2011 we had 2800 police personnel.I am told it is now around 2200 and shrinking daily. A friend just told me minutes ago 4 quit this week and some retired.Austin and Aurora and Dallas and Nashville are recruiting heavily here and they are cherry picking the best of the best because they have far better pay and benefits. Look them up they are online. See for yourself. It matters who you have as fire and police. Who do you want investigating homicides and rapes and horrible crimes against children? Help the police and firemen. Change the politicians.

    • Get Informed

      Your right! You need to fix this! With votes! But until then the only way to save these first responder elderly retirees and disabled people is to vote this tax. I pay more in charity a month than this tax will cost the average person a month to protect the people that risk their lives for Memphians they do not even know on a regular basis and in ways you couldn’t even imagine. I hate taxes that are wasted. This will be the one that is not if they will earmark it as required to go to public safety. I totally believe our city govt supported this pension 100pct funding law in Nashville which has effectively put us in a time crunch to make quick big payments to shore up what the city council has not contributed over a decade. (The employees contributed their 8%, or so depending on hire date,l it is payroll deducted. (That is right the employees pay into this pension. More than half of the money in it is employee money and it’s interest. More than most people pay into a 401k). The city did not pay their 6.2 pct for many years. I do not know what they spent that money on. But now it is owed as commanded by the state and they need to pay it. Should we bankrupt the people who did everything right and made their payments? Or should we make the city follow the contract made with these people and pass this sales tax, then go after the politicians responsible for mishandling the monies and maybe even figure out whether it went to a special pet project or divided to several groups like the chamber of commerce ( I think they usually get 1.5 million of your dollars a year) why I do not know. This will be a bandaid to fix all the immediate financial woes and to make our first responders sound and help Memphis be a safer place. Next we need to do some surgery and remove some of the people who are mismanaging any monies.

    • Get Informed

      The answer is election day. Vote to pass this tax and protect your first responders. Right now nothing else can save them and anything else will be too late. Its a few bucks a month. Then vote out whoever you think knew they were not making the pension payments that they knew were supposed to be made and then double crossed the people who protect Memphis everyday.

  • A. Dickerson

    This situation saddens me and it scares me that the leaders of this city has been so financially irresponsible someone should be held responsible for this pathetic situation. I think acity audit should be done ASAP to see exactly what got our city employees suffering.

  • Don

    I receive a construction union pension. I receive a letter every year with details of the shortages in the fund. This pension IS NOT GUARANTEED. I understand it can be taken over and restructured at any time if the funding goes
    below a certain amount. Nobody is going to raise property taxes to ensure my income. And, by the way, almost everyone has been drastically affected this year by increases in health care premiums, including me. This is a never ending story if you raise taxes to fund a pension when people are leaving Memphis in droves. Who wants to stay in a city where obviously the City Council has no merit whatsoever due to the Mayor asking the public for options. WHO IS RUNNING THIS TOWN?!

    • Get Informed

      City employees got no such letter. They got a guarantee. And the laws covering private pensions are much stronger than public pensions (they are not covered with nearly as many safegaurds). You could sue to get your pension. What happened to eithics. What happened to a deal is a deal. If you are mad be mad at the people who mismanaged it and vote them out. Not at the people who paid in 8% when the city was supposed to pay 6% and did not even do that for many many years. Protect the people that protect you. They did no wrong. The city emergency responders need your help. The city will not pay what they owed them and are bankrupting elderly and disabled people that had a guaranteed benefit for 30 years that just got jerked out from under them. Your talking 50 cents on a 100.00 grocery trip. First help the first responders that sacrifice so much for people they don’t even know. I know a few that died in the line of duty and several that are disabled because of it. Then fix the rest by voting someone in that will fix any other problems.

      • Hunter

        Tell like it is !!!! What needs to happen is the tax payers, business owners and people unfortunate enough to be homeowners in this city start demanding the removal of the mayor and those council clowns. Then you can bet they would start pulling rabbits out of their hats .

  • Ken Wagner

    To me our text system here in the city is so messed up some things we are already paying 9.75% other things we are paying 7.75% and then again some things we are paying 9.25% are we going back to the old way of 9.75% across-the-board?

  • jihn

    The city is already poverty stricken, the only one left to pay any taxes are already over burden with to many taxes on everything they work hard for, and now they want more money? GET OUT OF THIS CITY WHILE YOU CAN!! Its not worth the burden on your family.

  • Chuck

    NO!!!!! The Memphis City government needs to figure out another way without raising taxes!! NO , A sales tax hike will do nothing but drive consumers out side the Memphis to shop. Then we , as citizens , are going to loose out again. The sacrifices need to be made from inside the Memphis City Govt. This is why Memphis is the laughing stock in the State of Tennessee!!

  • Teresa

    First, why is it ok for the city not to pay ANY of its bills? If I don’t pay my utility bill I will have no power, they haven’t paid their part of the pension or their part of the schools! How is it the employees problem? We pay our bills.

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