Mayor Outlines Tax Cuts, Trash Fee, Pension Changes
Published: February 13, 2013
In a broad-ranging State of the City address, Mayor Stephanie Rawlings-Blake outlined major changes she hopes to introduce in the coming months, saying “the old ways of doing city business must end.” Fueled in part by a consultant’s report projecting $750 million in “structural deficits” and a $3.2 billion pension-funding shortfall, Rawlings-Blake told the City Council and visiting dignitaries that “we cannot build the foundation of a growing city on the mud of a fiscal swamp.”
Rawlings-Blake proposed to renegotiate the payments-in-lieu-of taxes major nonprofits pay, collect a new commuter tax, and institute fees like suburbs have for residential trash and recycling. She also proposed to cut the city’s workforce through attrition and move new city employees from the defined-benefit pensions they now get to a 401(k) defined-contribution system. She said ending the “outdated and unsustainable benefits” would create savings that would allow higher salaries for city workers.
Rawlings-Blake targeted the fire department specifically, saying she wanted their current 42-hour duty week increased to 52 hours, which she says is the area norm.
The mayor also promised a “nearly” 50-cent cut in the property-tax rate, or “22 percent over the life of the plan.” She was unclear on what the life of the plan actually is, or how this proposed tax break meshes or clashes with previously proposed tax relief, like former mayor Dixon’s “20 by 2020” plan, which promised to cut 20 cents off the per-$100 rate.
Promising “specific details in the coming weeks and months,” the mayor said she made her proposals “with complete sincerity and humility.”
During the City Council meeting immediately after, Councilman William Cole (11th District) introduced a bill to convert the elected officials pension system to a 401(k) plan. The new plan would cover “future elected officials,” he said.