This is an interesting email from another local government reform group called "LowerTaxesNow.org" about Orlando and their excessive pension losses and costs.
They talk about how the taxpayer is getting stiffed by the excessive and growing pension costs, which makes you think that local School District and County government pensions may have the same problem because I think they all use the same central pension "investment" fund for Florida governments. It may be normal for the value of the pension fund to drop in down economy, but reading that that Orlando must kick in enough to not only MAKE UP the loss (employees should share some of the loss, but apparently not), BUT, they say that the taxpayers are on the hook to GUARANTEE an 8% growth in the value of the investment fund, which is unbelievable to me. Thus, the pension is a guaranteed investment program that pays more than most investments, and means the taxpayer is funding a growing pension scheme where the employees don't share in the losses. (needs further research...)
NO privage employer any more provides such "defined benefit" pensions, but instead provides 401k type of programs where the employee decides which investments to make, and they, not the employer, win or lose based upon the success of the investment.
So, one more thing to research... any elected official in Florida should ensure there is complete transparency on the pension programs, because that is what is bankrupting California and some of their cities because of excess pension funding.
vj
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The financial house of cards
that is the Orlando government is falling down. The same people who
gave the key to the city to convicted embezzler Lou Perlman have spent the city
into insolvency. It is time for the taxpayer to wake up and
demand real reforms.
Matthew Falconer Let's start with some facts. Orlando's 2009 budget is
$926,090,108 (in 2005 it was $604 million). There are roughly 200,000 residents
in the City. That comes out to approximately $10,000 for each working taxpayer
living in the city not including the $1.5 billion spent in Orange County schools
or the $3.5 billion spent in Orange County. But we know about this burden. Here
is the part most people do not know.
The City of Orlando lost $150 million in its
"defined benefit" pension plan in 2008. What defined benefit means is that you,
the taxpayer, need to pay that money back even though you already paid it once.
But it gets worse. The Orlando pension plan guarantees an 8% annual return on
the fund investment (which was approximately $1 billion). So you, the taxpayer
need to dig out of your pocket another $75 million just for the pension fund
losses in 2008 (Orange County lost over $1 billion in its pension fund last
year, but that is another story). It makes this deficit up by increasing the
pension contributions for employees. Did you know the average annual pension
contribution for a police officer exceeds the annual salary of a
taxpayer earning minimum wage?
Sorry, but it gets worse. The City borrowed $100,000,000 to fund the new Magic Arena. The interest rate on the arena is higher than expected so the arena will cost $100,000,000 more than expected with debt service. The city is even borrowing to pay for the design work for commuter rail. At the same time the city gave a developer $6 million for a downtown movie theater and millions more to subsidize a speculative office project in a low income area. Taxpayers have twice subsidized the purchase of Church Street Station which is again in foreclosure (is the third time a charm?). People are upset the City of Orlando is paying twenty-seven year olds $131,000 annually plus benefits, but the real problem is the City of Orlando is on a collision course with bankruptcy. The same people that brought you the venues and the $1 million Ambassador scooter program will not prevent the City of Orlando from this fate. What the city needs is a new group of leaders who are willing to stand up and say we have a pension problem. Leaders who are willing to say civil servants should not make double the wage of the taxpayer. Leaders who will turn our local government from its current bureaucracy to a model of efficiency. Leaders who will give government back to the people. The hard working taxpayers of Orlando deserve better. A lot
better. Take a look at General Motors to see the future of your local
government. Our local government has the same business model as General
Motors and government as usual is not sustainable. Orlando has already
raised real estate taxes in a recession, doubled parking fees, raised utility
fees by 18%, installed red light cameras that generate $10,000 a day in fines,
and increased every fee it can. This burden creates higher unemployment in the
private sector but enables the City to keep 165 unionized workers on the payroll
in permitting and economic development at a cost of $100,000 per employee.
Permits are down over 80%. What are these people doing?
The fee increases will continue until we, the taxpayer, put a stop to it. Unemployment in Orlando has gone from 3.3% to 9.9% in five years. The primary regulator of business is our local government. Unless we force government to serve the people instead of enriching itself our economy will not improve. The question is when will we fix it and who will step up. Please JOIN www.LowerTaxesNow.org. Send this to all of your friends. The future of government will be dramatically different from our current model. If the taxpayers unite it will come sooner than later. The sooner we reform our government the sooner our economy will recover. I have almost finished my book; "Building a Better Local Government." It is a road map for fixing the problems with our local government and an economic recovery plan. Don't give up. The problems are many but the solutions are within our grasp if we unite as taxpayers. Join me July 4th at the next Tea Party in Orlando tentatively scheduled for 11 a.m. at the Amway Arena. I will outline a plan to reform local government and give government back to the people. Orange County Taxpayer Budget Review Board www.TaxpayerBudgetReviewBoard.org |
