Many of Tucson’s government-funded (and most vital) organizations are facing serious budget cuts and pension problems, despite ruthless cutbacks in spending. Possibly solutions are still being discussed, but the problems are massive and costly.
Tucson Unified School District Takes a $6 Million Hit in Funds
In May of this year, the Tucson Unified School District faced a funding reduction of almost $6 million, and had to make layoffs to excess staff, and make cuts in transportation, custodians and maintenance workers, and materials and supplies in order to keep the school budget from dipping into the red.
The funding cuts to the Tucson Unified School District put strain on schools throughout the city, but administrators managed to make very few layoffs to teaching staff and administrators on the school level. They wanted the funding cutbacks to have as little direct impact on the students as possible. But their financial situation isn’t likely to improve in the near future, despite these budget changes; not unless they receive a new source of funding, and soon.
Pensions for Tucson Firefighters and Police Officers Are in Danger
The pension system that Tucson has in place for their retired police officers and firefighters is quickly crumbling under the financial strain of rising benefit costs and very few assets remaining. The problem primarily stems from pensioners outweighing the number of active employees that are paying into the pension system, however.
Many of the active employees feel that they can’t afford to pay into the pension program as it currently stands, and the lack of those funds is creating a problem for the retired employees and their spouses who are still collecting pension funds.
South Tucson Serves as Warning in Pension Crisis
In South Tucson alone, the cost of keeping the pensions of their retired police and fire department members is weighing in at a staggering $520,000 per year. But despite the growing needs of these of retired government employees, the pension crisis will only get worse. Funds are quickly drying up, with no source of additional funding in sight.
South Tucson estimates that it’ll need $8 million in pension liabilities for the next twenty years. But they only have $176,000 invested at this moment, which is just 2.2 percent of the funds they need to cover pension costs.
So what will happen if the city fails to meet the projected investment rates of a highly “optimistic” 7.5? They’ll have to make up the difference by taking money from the city’s general fund.
Earlier in 2015, the South Tucson City Council had the offer of paying down the debt with a one-time payment of an unspecified amount proposed by the City Manager, but the Council claimed they couldn’t find the money needed to pay down the debt in their $10.2 million annual budget.
Costs are anticipated to increase over the next two years, due in part to two statewide lawsuits that dealt with compensation for pension-collectors. But the city of Tucson is currently developing a proposal to help keep its commitment to police and fire department pensioners after taking a closer look at the budget.