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Yesterday, the City posted more details about the proposed pension plan. The plan commits the City to pension payments in a range of approximately 27-38% of its payroll for the next 30 years. Based on the assumptions being used, the actual payments will almost certainly rise in short order to the upper limit of that range.
That means that the City will pay $26 billion in pension payments over the next 30 years. The payments will average about $850 million each year. But, of course, those payments are back-end loaded so that the current mayor and council will avoid most of the pain of paying for this plan.
But here is the real kicker. If you assume that property tax receipts will increase by 3% annually, the payments under this plan will equal about 50% of property taxes collected by the City for the next 30 years.
50% of property taxes! That is before you hire a police officer, buy a fire truck, fix a pothole or provide any of the services we expect from our City. Obviously, that is not sustainable. So get ready for you property taxes to skyrocket if this deal is enacted and voters remove the property tax cap next year.