Wednesday, December 31, 2014

Cranely Using Smoke and Mirrors on Pension Deal to Hide City's Sacrifice

From a financial perspective, there are actual steps in the City's pension deal that on the surface appear to help reduce the funding problem, but that is only half of the story.

Yes, getting the retirees to suspend COLAs for three years and then reducing the COLA formula will mean lower benefits paid and help solvency.

Yes, the city paying more into the fund certainly will help solvency.

The details Cranley is hiding deal with where the city will get the additional money to increase funding for the pension trust. Here are the problems:

  1. What is the long term impact of moving $200 Million from the retiree health care trust?  Is this the fund Cranley and Luken already screwed up?  Previously this year the Plan was only going to be $100 million, so how did it double in size and still have Council backing?
  2. Where does the $38 Million a year for seven years come from?  Saying the City will "borrow against future revenue" is no different from saying "I'll gladly pay you Tuesday for a hamburger today."  Revenue from what?  The pension fund?  Income Taxes? A bake sale?  Cranley's hiding the details. He does not want us to know what he's doing.
  3. Where does the additional 2.25% of the annual operating budget come from? How much is this actually?  Is this based on the $358 Million in expenses or just of salaries? What is Cranley going to do, increase revenue or cut something?  Which ever he is planning, he's not giving the details and is once again hiding something.
What Cranley is doing is typical Cranley.  He's making something sound comprehensive, but he leaves out nearly all of the substance. Either Cranley has no clue where the money will come from or he is hiding it because it will be politically unpopular.  The answer is mostly likely the latter and as is the Cranley way, he's hiding the details in hopes that people will accept half of the truth and forget the rest later.

This is the type of Mayor we have, one who hides the real sacrifices the city has to make to allow him self the ability to take a faux victory lap.  This plan may actually be workable, but the Citizen of Cincinnati deserve to know the real impact this will have on the City Budget and the services the City provides. Hiding details is dishonest.  This is insulting to people of Cincinnati. This is, however, how Mayor John Cranley operates.  We must demand the truth from the Mayor.  We won't get it, but everyone in the City must call out the Mayor's half truths and lies every chance we get.

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