By Jeremy Duda | Arizona Capitol Times
A proposed pension reform initiative would put a straightjacket on city and county budgets until they fix a problem they have little power to change.
The Responsible Budgets Act would bar the state, counties, cities or any other subdivision of state government that participates in an underfunded pension system from increasing spending, except for inflation and population growth. A provision in the initiative defines “adequately funded” as at least 80 percent funded.
But most city and county employees participate in state-run pension plans, such as the Arizona State Retirement System and the Public Safety Employees Pension System. All decisions regarding benefits and contributions by employees and employers are made at the state level.
As a result, cities, counties and government subdivisions such as fire districts and utility districts would be effectively barred from increasing spending due to a problem they have virtually no control over.
The initiative also seeks to eliminate pensions for elected officials.
