Coral Gables’ Pension Plans May Face Hard Future: See Case of San Diego
December 14, 2010 Leave a comment
How long will Coral Gables continue to defend and finance a terrible pension plan that is highly disadvantageous to taxpayers and the city’s budget.
After San Diego voters rejected a budget-balancing half-cent sales tax increase last month, Mayor Jerry Sanders unveiled what he calls a radical idea: He’ll ask voters to eliminate the city’s traditional defined-benefit pension plans for new employees, offering them 401(k)-like savings accounts instead. “We saw the private sector go through this,” the 60-year-old Republican says. “Government will have to relook at how we do stuff as well.”
Cities may have more trouble borrowing under legislation proposed on Dec. 2 by Republican Representatives Devin Nunes (Calif.), Darrell Issa (Calif.), and Paul Ryan (Wis.). Their bill would bar cities and states from issuing tax-exempt bonds if they don’t use more conservative return projections that could result in higher estimates of pension liabilities. “Lucrative pension promises are being made to public employees that taxpayers simply cannot afford,” Nunes said in a Dec. 2 statement.