News Column

The Commercial Appeal, Memphis, Tenn., David Waters column

July 21, 2014

By David Waters, The Commercial Appeal, Memphis, Tenn.



July 21--Blame it on Detroit and other deadbeat municipalities that finally put the fear of God into governments for failing to live up to billions of dollars in promises made to employees and retirees.

Blame it on DeSoto County and other suburban sirens that lure urban taxpayers with promises of lower taxes, better schools and fewer problems -- temptations that result in higher taxes, declining schools and more problems for Memphis.

Blame it on former Memphis city officials who avoided tax increases or service cuts by hiding generous retirement benefits in the footnotes of annual budgets and shifting those burdens to future taxpayers.

Blame it on current city officials who are trying to avoid tax increases or service cuts by shifting the burden of generous retirement benefits from the people who agreed to pay for them to the people who are supposed to get them.

Blame it on Wall Street analysts and investors, who encouraged public and private employers to rig their balance sheets to bolster bond ratings or quarterly earnings.

Blame it on anonymous accountants who suddenly decided that local governments should no longer be allowed to rig their balance sheets.

Blame whomever you like for the city's current financial struggles, and the fear and loathing it has generated.

That doesn't help Memphis paramedic Julian Wilson or countless other city employees or retirees who now are being asked to pay the price for decades of rigged budgets, rising costs, risk-averse politicians and revised bookkeeping standards.

Wilson, 52, has been watching over us for 25 years.

Whenever an elderly person falls, or a child chokes, or a man gets shot, or a woman gets beaten, or anyone has a stroke or heart attack or asthma attack, whenever an illness or injury suddenly threatens someone's life, we call Wilson and he responds first -- usually within four minutes.

In exchange, we paid him about $56,000 a year, covered 70 percent of his health-insurance premiums, contributed to his pension, and told him he could retire if he served us for 25 years.

It was a good deal for Wilson and a bargain for us.

Over the years, Wilson's been shot at, threatened with knives and other weapons, attacked by dogs, yelled and cussed at, all for trying to keep his end of the bargain.

He hasn't had a raise in five years. Now, the city is making plans to quintuple his health-insurance premiums, if he retires.

"I feel like they pulled the rug out from under me," Wilson said after he attended Tuesday's City Council meeting.

"I just want what I was promised. I just want what I've earned."

It's good that the city is finally facing its financial realities.

New accounting standards and state laws are forcing the city to change the way it keeps its books.

Fixed costs such as pensions, retiree benefits and other long-term debts now make up nearly half of the city's operating budget. (By comparison, it's about 20 percent in Nashville.)

The city can't afford to be in the health-insurance business anymore. As more people live longer, old-fashioned pension plans aren't sustainable anymore.

The city's population and tax base isn't growing fast enough to make up for rising costs, ill-advised decisions by former officials, or larger economic fluctuations.

"If you think growing pains are tough, try shrinking pains," said Brian Collins, the city's chief financial officer.

That's the bottom line, but the bottom line isn't going to respond when we call for help.

To their credit, city officials are making allowances for retirees over 65 who don't qualify for Medicare; those under 65 who can't get insurance through a spouse or other job; survivors of those killed in the line of duty; those disabled in the line of duty.

They say they will help current employees find other affordable health-care plans. They say no one who has a pension will lose it, no one who has made pension-plan contributions will lose a penny of it.

"There are no easy solutions," said City Council chairman Jim Strickland.

He's right.

"There are better solutions," said Thomas Malone, a former firefighter and president of the Memphis Fire Fighters Association.

That's the challenge. We owe it to Julian Wilson to find them.

The balance sheet, no matter how accurate it finally might be, can't lift a finger when lives hang in the balance.

Contact David Waters at 901-529-2377 or waters@commercialappeal.com.

___

(c)2014 The Commercial Appeal (Memphis, Tenn.)

Visit The Commercial Appeal (Memphis, Tenn.) at www.commercialappeal.com

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Source: Commercial Appeal (Memphis, TN)


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