Kasim Reed and Atlanta’s fiscal crisis
This was going to be the column where I regretted not endorsing Kasim Reed last fall.
I would write about the visits that Atlanta’s new mayor has made to the AJC’s offices to talk about fixing the city’s finances, in particular the crushing unfunded pension obligations it faces. I would write that I was impressed with his new priorities and his resolve.
Reed would have gotten my vote, I would write, if he had talked this way during the campaign rather than putting first and foremost a plan to hire 750 more police officers. That was probably good electoral politics, for it no doubt matters to a great number of Atlantans.
I simply didn’t think then — and still don’t — that such a plan was feasible until the new mayor had gotten a grip on pension costs, which have come to consume about 20 percent of Atlanta’s general budget. I thought I heard Reed signaling that he now agreed.
Then came his first budget.
It includes 100 new police officers and a 3.5 percent raise for current officers, at a cost of $11 million. There’s also $4 million to open all of the city’s recreation centers in an effort to stem youth crime. Yet he projects flat revenues.
Yes, there are cuts, and no raises, for other departments. In that sense, Reed is choosing, as he says leaders must do.
But paying for this proposed budget hangs on spending some reserves, increasing a range of fees, and completing two deals: a sale of the city jail to Fulton County for savings of $16 million a year, and $13 million from selling City Hall East.
Neither deal’s final. The budget must be final June 30. That’s a lot of unhatched chickens.
The mayor speaks compellingly, and seems sincere, about finally getting Atlanta’s finances in order. Budgeting new revenue before it’s in hand is not going to reassure skeptical residents that things have changed.
But there is a more important element here.
Unfunded retirement benefits are a nearly $3 billion problem: almost $1.5 billion each for pensions and health care. Making legally required payments for pensions alone will cost the city an estimated $125 million this year.
Changing benefits for those who have already retired or left the city’s payroll is off the table, Reed says, and in any case is probably illegal.
Changing benefits for future workers and those who aren’t vested — the latter move sparks lawsuit threats from labor unions — would save $8 million to $12 million a year, Reed says.
That leaves a $100 million-a-year problem. I don’t think the city can solve it without getting workers to agree to benefit changes. They’ll surely want something in return.
Raises are one option — paying more today instead of promising to do so tomorrow. That choice at least forces elected officials to fund the decisions they make, and it doesn’t lead to problems that keep compounding over time. But why not tie raises, maybe even larger ones, to the needed pension changes?
Also problematic is that the raises are only for police, and it’s firefighters who have been most vocal so far about opposing any pension changes.
The history of compensation changes in the city, particularly the pension enhancements in 2001 and 2005, shows that what is given to one group of workers eventually is given to the others as well. That’s partly how Atlanta got in this mess.
I like much of what Kasim Reed says. I don’t want to see him get stuck before he gets started.
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64 comments Add your comment
Michael H. Smith
June 13th, 2010
5:58 pm
Georgia relying more on feds to pay state bills
Legislative leaders in Georgia love to gripe about the spend-o-holics in Washington, but they have increasingly relied on the federal government to pay their bills.
http://www.ajc.com/news/georgia-relying-more-on-548006.html
There you have it folks, we can’t pay our government workers that we have presently and comrades Cynthia and Peter want us to create more GUB’MENT jobs with benefits and pensions all charged to the national credit cards that have long since been maxed-out. Meanwhile ignoring the economic backbone that supports everything: Private sector jobs which pay more into the government treasury than they consume from the public trough of the government treasury.
Don’t worry about the private sector mule, just load the GUB’MENT wagon!
Red November
June 13th, 2010
7:03 pm
“He let OSAMA make a total fool of him and 3000 AMERICANS paid for his incompetence..I know you god fearing conservatives hate the truth….lol”
@miles the liberal: hate to break the news to ya, mouth breather, but the 9/11 Commission report stated in it’s conclusion that “nothing could have been done to prevent the attack.” Actually, they were wrong: we could have profiled Arab Muslims. Now you sit there and peep through those mindless liberal rose colored glasses and tell us with a straight face you people on the modern regressive left would have allowed that. Idiot.
Meanwhile in other news…
“PHOENIX (AP) – Sheriff’s deputies raided two Sizzler steak house restaurants in Phoenix on Saturday, arresting nine employees who are suspected of being illegal immigrants and using fraudulent documents to get jobs. The raids were part of a yearlong investigation into whether the operators of the two Sizzler locations broke a civil law by knowingly hiring illegal immigrants, Maricopa County Sheriff’s Office Lt. Brian Lee said in a statement. Deputies were looking for 23 suspects wanted for identity theft, Lee said. Authorities believe one of the suspects was deported three times and has been hired back by Sizzler each time he returned.”
All you liberals who think the Arizona immigration law is racist can go stuff a burrito.
Hey, what’s the Community Organizer In Chief’s approval ratings these days?
http://www.rasmussenreports.com/var/plain/storage/images/media/obama_index_graphics/june_2010/obama_approval_index_june_13_2010/322431-1-eng-US/obama_approval_index_june_13_2010.jpg
Well that sucks.
On, and buh-bye Dirty Harry Reid. Not been nice knowin’ya….
“A new Rasmussen Reports telephone survey of Likely Voters in Nevada, taken Wednesday night, shows Angle earning 50% support while Reid picks up 39% of the vote. Five percent (5%) like some other candidate, and six percent (6%) are undecided. “
Peter Haskett
June 13th, 2010
7:25 pm
What laws protect job creation?
Michael H. Smith
June 13th, 2010
5:27 pm
“Cutting through the chase: The SEC failed to regulate Wall Street, Libertarian Greenspan said trust the banks, along with pushing for deregulation of derivatives was Robert Rubin and Larry Summers (Obama chief economic adviser ) which gave us AIG. Had enough, or shall we go further into the insane so-called Free Trade and Immigration policies of Clinton and Bush, now Obama that has royally screwed this economy out of jobs and the creation of jobs as never before?”
I have not had enough. I am waiting for you to answer the question to the question. You said @ 1145am: “When the private sector economy is properly regulated, the laws will protect job creation.” I am asking for an example of such a law. Or are you saying that the economy has never been properly regulated? Either way you named a bunch of executive level Federal Appointees instead of citing your “job protection law.”
I never said government workers were any better than private sector workers. I am saying that government workers took their jobs because of the benefits and money. If your retirement fund has lost tens of thousands that you’ll never see again, then you should have worked for an employer who had a guaranteed pension plan. Why should a government employer be penalized for a personal decision made many years earlier to exchange unlimited income potential for security in retirement? Why do you hate police, firemen, teachers, and judges?
Nor do I want the “us” in “they want us to create more GUB’MENT jobs with benefits and pensions” to create more public sector jobs. I want “ya’ll” to create private sector jobs with benefits and pensions and good pay. What’s stopping you? Wouldn’t be that there’s no business with which you could compete, would it?
Furthermore, when retired gov’t employees get the full amount of pension they are entitled to, they will create jobs with that money. They will have more time to spend their dollars on consumer goods, travel and tourism, entertainment, and other high dollar items at places that employ millions of workers. All along the way that retiree will shop, fly, and drive, supporting our private economies and local governments and services through sales taxes. Indeed, customers create jobs. The source of a customer’s funds is irrelevant. As long as there are customers, there will be jobs. And there are tons of jobs in food & beverage & retail. I’d personally rather work for the census.
Michael H. Smith
June 13th, 2010
8:35 pm
Or are you saying that the economy has never been properly regulated?
It is and has been poorly regulated and I never mention a job protection law, I only cited the commerce section of the Constitution that speaks directly to providing (which means protect, promote, assist, foster etc.) for the general welfare of the economy. That is your answer, do you need to hear it another 100 times?
Nor do I want the “us” in “they want us to create more GUB’MENT jobs with benefits and pensions” to create more public sector jobs. I want “ya’ll” to create private sector jobs with benefits and pensions and good pay. What’s stopping you?
What is stopping the private sector at the moment is a socialist Democrat Congress and President.
Wouldn’t be that there’s no business with which you could compete, would it?
Fortunately I don’t own a business at this time and wouldn’t venture out into one in the present business climate given the current regime’ but Americans can compete with any other business in the world when our government does its’ job of regulating correctly and does a good job at representing American job interests in compliance to the commerce section as I’ve cited. That means having a Trade policy that doesn’t reward outsourcing nor allows illegal immigration and excessive amount of immigration which is also outsourcing.
Why should a government employer be penalized for a personal decision made many years earlier to exchange unlimited income potential for security in retirement?
Very simple answer: Government cannot pay, want to settle for dimes on the dollar Peter? Because that’s about where this thing is headed, look at Greece and the rest of Europe, they are all going on an austerity plan where GUB’MENT unionized worker are going to take very brutal cuts or face a total collapse of the entire economy and walk away with absolutely nothing.
Government workers never put into the economy what they take out in dollars Peter, that’s why they – at least – use to be called Public Servants. Something you GUB’MENT workers seemed to have forgotten. We the private sector puts up all the dollars, you the public sector put forth all the sweat equity.
Why do you hate police, firemen, teachers, and judges? I don’t with the exception of one well deserving “firejerk” from New Yuck who thinks public sector poop don’t stink and I don’t buy into you are not against the non-union private sector. As far as education, government should not have a monopoly on anything that can be performed by the private sector. In fact government should never compete with the private sector period, so there goes the postal service too. I disagree with Eric Johnson on this is Free Market, it is a regulated market meant to freely have competition between businesses but not between governments and businesses. The judiciary branch is not a business enterprise it solely is government and business should never compete or take the place of government to provide governance.
The source of a customer’s funds is irrelevant. As long as there are customers, there will be jobs. And there are tons of jobs in food & beverage & retail. I’d personally rather work for the census.
Everything economic is relevant to the economy and where dollars are being made does make a very big difference. Peter, you only cite what is wrong with this economy to cure its’ ills. The nation cannot survive on service industry jobs alone. We have too many paper shufflers, grass cutters leaf-rakers, pant pressers, burger flippers and two bit opinionist already. Somebody has to actually make something of value that other people in this world want to buy, not only we few debt ladened Americans.
A $500 billion trade deficit with China. A $47 billion trade deficit with Mexico thanks to NAFTA and illegal and abusive immigrant labor trade akin to a serfdom. Remember NAFTA was supposedly going to bring in a $10 billion dollar trade surplus to U.S. coffers, what happened Peter, where were those good government regulations?
I’ll give Geithner some honest credit, at least he is pressing China to stop pegging their currency to our dollar, instead of apologizing all over the place, stooping and cowtowing before them like his boss.
Peter Haskett
June 13th, 2010
10:50 pm
Enter your comments here
Michael H. Smith
June 13th, 2010
11:16 pm
Here’s one for Ole King Rowee. Whimper whimper.
No one is going to lose their home when he is guvna? Is anyone going to have to qualify for a loan, Sire?
Or, is the laws that prevent loan fraud and PROTECT JOBS Peter going to be put back on the books to REGULATE BANKING COMMERCE?
If not Rowee, it just doesn’t seem fayah to me. Whimper, whimper.
Sick of Dems
June 14th, 2010
8:05 am
Red November—Couldn’t have said it better myself.
Horrible Horrace
June 14th, 2010
8:56 am
Close the rec centers.
JackLeg
June 14th, 2010
9:22 am
Port O’John, typical liberal bull$hit, why is it that as soon as we talk about cutting government jobs the ONLY government jobs that liberals want to cut are the “Most Visible” jobs. Cops, fireman and teachers, why is it that these, as liberals believe, are the only government jobs we can cut? Here are some other things we can cut, how about the $700 per month car allowance for senators and congressmen, or why do we pay for senators and congressmen need to have office space and a staff for life? Look at all the savings there and we did not cut one job or pension. Why not have ALL government workers pay 20% of the cost of their healthcare costs, the rest of pay more than that. Why not look at duplicate job functions within the bureaucracy and stream line the paperwork for ANY government agency. If we did these few things we could save BILLIONS of your tax dollars..
Kyle, did you thank Stephanie Ramage for your clown suit?
June 14th, 2010
10:28 am
Not a single word from Kyle about how Lisa Borders rigged the APD chief “search” to include Turner as a candidate.
It’s one thing for Stephanie Ramage of The Sunday Paper to put a clown suit on the AJC. It’s another thing altogether when Kyle wears it with pride.
Intown
June 14th, 2010
10:40 am
Kyle, even if Kasim is a feckless and ineffective Mayor, you should still regret not endorsing him for Mayor. Norwood is a looney tune and would’ve been an absolute catastrophe for the City. The fact that you can’t see through her nonsense speaks volumes.
Loony tune
June 14th, 2010
10:50 am
We shall soon see even a Loony Toon like Buggs Bunny would have been better than a continuation of the machine. Just look at the politics played to keep the machine going with naming Turner the new police chief.
What, you doubt it was ever going to be anybody but Turner? Ha Ha Ha Ha!!!!
fiff
June 14th, 2010
11:12 am
Crime is up because our sweet, innocent, victimized inner city youths begin reproducing at 10 y/o.
The1One
June 16th, 2010
2:35 am
Look bottom line is we need Police Officers, we need Firemen, and we need Correctional Officers. These jobs are sensitive. Im sorry but when you work 20-30 years under the stress of maybe getting killed on a call, burned in a fire, or rioted against in a jail. You should be able to sit back and not have to worry about your bills at age 60. The pension is a mess because of the people who run the government. Its not the officers fault. Why punish them for the city’s shortfalls. Compare Atlanta’s crime, pension, and pay to any other city of comparable size… Its a slap in the face to Public Safety. Why work in Atlanta barely making 40,000.00 a year when you can go to Memphis and be at 50,000.00 in a few short years, or New York, or D.C. Its bad enough they dont get comparable pay to other big places. So now lets pinch at there pensions. And whats this crap about closing the City Jail. I mean seriously. Now police officers have to be careful how many people they arrest so Union City jail doesnt get crowded. WTF…