City Manager Richard Miranda is scheduled to present his recommended city budget to the mayor and council today — a budget that addresses Tucson’s $27 million shortfall through the elimination of 92 positions, cuts to outside arts, public-access television and human services groups, along with an increase in business license fees.
We appreciate the city’s efforts to avoid raising bus fares and reducing the harsher proposed cuts to arts and social services, but believe it sends the wrong message to raise license fees when you’re already fighting the perception that Tucson is business-unfriendly.
When economic times are tight, though, there are no easy answers to balancing the city’s budget, no magic source of revenue that will fund every program, cover every service and pay city employees a competitive wage.
But if we agree with Councilwoman Regina Romero, who said “budgets are moral documents and reflect the conscience of a community,” how can the mayor and council, in good conscience, continue to avoid the larger problems that virtually guarantee another shortfall next year? What does it say of a leadership that’s willing to ignore fiscal warnings and just hope things work out?
Last year the council voted 6-1 in support of city employee raises that added $11 million a year to payroll costs, and last month unanimously approved a paid César Chávez holiday that will add another $500,000 to the city’s burden.
Although it can be argued that both these actions were long overdue, it makes no sense to commit to millions of dollars in new expenses then turn around and say you don’t have the money. You can’t give someone a raise today and hope they enjoy it even as they wonder if their position will continue to exist down the line.
Part of the reason for the city’s budget woes are employee pension and insurance costs. As in most governments, the city pays the insurance cost for retired employees who are not yet 65 and thus Medicare-eligible, an expense that added up to more than $15 million in 2013.
More than half of that was spent on direct subsidies to retiree health plans, but the rest was the cost of increased premiums that come with carrying the former – generally older – employees on the city’s health plan. Currently the city owes about $240 million for present and future retiree health-insurance benefits.
Working to put current employees on a separate health plan would save workers money in premiums and could allow the city to reduce its outlay to retirees.
Another employee issue the council should take on is the sick-pay sell-back program for police and fire personnel.
As reported by the Star’s Darren DaRonco, police officers and firefighters can cash in up to 208 hours of unused sick time each year. Police can start doing so after 15 years on the job and 480 hours banked, while firefighters can start after five years and 360 hours.
The buyback has been policy for years, and while the city expected to spend $2.6 million buying back sick days this year, the real financial damage comes from the now-discontinued practice of “pension spiking.”
Pension benefits are calculated using an employee’s three consecutive highest-earning years. By using the buybacks, veteran police and fire personnel could artificially inflate their yearly pay and receive a larger pension that what they truly paid into the system.
Public safety employees should be adequately compensated for their job as part of their salary, not through some back-door benefit that was clearly abused and has added untold millions in unavoidable long-term pension costs.
Miranda’s budget may not be perfect, but it provides a viable solution for the next fiscal year, and whatever changes the council makes we hope will be for the better.
But unless the city is willing to address the larger, more difficult issues, the system will continue to be unsustainable, and whatever program or service was “saved” this year probably won’t make it the next.