(WMC-TV) - Mayor A C Wharton released his annual budget Tuesday. There will be no tax hike for Memphis taxpayers in 2015, but public safety will take a hit.
Personnel costs dominated the mayor's 25-minute speech. He says if there is no pension and health care reform, the city will see cuts in services or a property tax hike.
The mayor began his speech with a message to employees.
"I understand, acknowledge, and appreciate the sacrifices you've made for the good of our city," he said.
The mayor noted his $596 million budget is $18 million less than last year. He called pension the "elephant in the room."
He says it will cost taxpayers an additional $60 million to $80 million per year; the pension system can explode any moment.
"Every time it explodes, we will have to either cut essential services or increase taxes," said Wharton.
He said the unfunded pension liability exceeds $700 million. His solution: To switch employees from defined benefits to a 401(k) plan.
Wharton also says he will continue to use attrition to lower public safety costs.
"For example, not filling positions as they become vacant to right-size our police department, but we will not put our citizens at risk," he said.
He says the other elephant in the room is retiree health care. His budget would change what they pay.
"Beginning on January 1, 2015, retirees can keep their health plan, but must pay all of their premiums," he said.
Wharton says retirees who are ineligible for Medicare will not be impacted. Pension and medical care reform savings would be used to pay unfunded pension liability.
The mayor will ask for $23 million to redevelop Raleigh Springs Mall and $1.5 million for MATA.
Jason Miles was in that meeting with Kontji Anthony, and he will bring you reaction to the mayor's budget proposal tonight on WMC Action News 5 at 10.
To read the mayor's budget address in its entirety then follow the link: http://ftpcontent4.worldnow.com/wmctv/FY15%20Budget%20Speech.pdf.
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