Atlanta taxpayers should cross their fingers that their City Council will seize on a great opportunity this week and vote to revamp the pension scheme for city workers.
Atlanta’s pensions have been a billion-dollar time bomb ticking for years, thanks in large part to a pair of ill-considered — and possibly illegal — plan changes made during the last decade. Those changes vastly increased the city’s liabilities at an unfortunate time of stock-market stagnation.
Mayor Kasim Reed deserves much credit for his determined pursuit of a solution to the pension problem, and things came to a head last week when the City Council’s Finance Committee approved a reform plan that could come before the entire body as early as today.
City workers are understandably upset about the plan, but Reed has rightly described the issue as a matter of preserving pensions or preserving jobs; he’s estimated that up to 200 workers will be laid off if the Council doesn’t approve a solid reform plan.
What’s more, with projections that today’s $1.5 billion in unfunded liabilities could triple to $4.5 billion within 10 years if left unchecked, it’s not a matter of whether to keep the city’s promises to workers. It’s a matter of changing the deal now, or breaking those promises even more egregiously later.
Taxpayers have a huge stake in this debate: Atlanta has been paying about one-fifth of its general budget — more than $100 million — toward pensions in recent years. It’s a drain on resources that have been even more scarce than usual during the recession and sluggish recovery.
“Atlanta’s greatness is confined by this pension liability,” Reed has said. Bringing the pensions under control is an opportunity Council members must seize.
– By Kyle Wingfield