CIR law no guarantee of tax relief (Ne. public unions)

[Omaha Steve]

http://www.omaha.com/article/20110717/NEWS01/707179905#cir-law-no-guarantee-of-tax-relief

By Matt Wynn
WORLD-HERALD STAFF WRITER

As a bill to overhaul the state labor court percolated through the Legislature this spring, many held out hope that finally, finally, Omaha would see some financial relief from its police and fire pension plan.

The legislation was expected to help reduce compensation if, as widely believed, the city was overpaying for employee pension benefits.

Turns out, as the law is written, the city probably isn't overpaying.

Omaha's pension costs are low when examined using the ground rules in the new law. That's right. Low compared with seven cities of similar size that have police and fire pension funds.

There are two fundamental reasons:

» The law was purposely written to consider only new pension costs, not reward cities for payments on past obligations. If you think of it as a credit card, the city can count only payments for its new purchases, not for paying down the debt it piled up for years as it let its older bills slide. Similarly, the labor court will look only at the amount the city pays into the fund for current employees' retirement, not the much larger payments toward its $573 million in long-term debt. And those new, ongoing costs are lower for Omaha than for the seven other cities studied by The World-Herald.

FULL feature story at link.