Phoenix city council to decide language of pension reform act

PHOENIX – Pension reform continues to be a hotbed issue for the city of Phoenix, with two councilmembers expressing reservations over a reform proposal set to appear on the November ballot.

Councilmembers Kate Gallego and Daniel Valenzuela expressed concern over the Phoenix Pension Reform Act on Tuesday, saying the proposal is vague, inconsistent and will end up costing tax payers more money.

Gallego said she believes the proposal will be contested in court and end up costing the city high legal fees.

“We will be sued, there’s a lot of precedent, we will lose and it’s not fair to tell taxpayers that they’re going to save that money when they’re not,” she said.

Supporters of the Phoenix Pension Reform Act maintain the legislation would save taxpayers money by phasing out city employee pensions in favor of 401(k)-style retirements, however Valenzuela said they estimate the initiative could cost the city at least $350 million just to make the switch.

“(It) probably will be much, much higher than $350 million,” he said. “Once we get past that initial cost of at least $350 million, will there be a saving? The answer is yes, the question is how do we pay for this $350 million plus to get there?”

Gallego and Valenzuela said they both want transparency on the ballot and for taxpayers to be informed when voting, so the language of the ballot needs to reflect the potential $350 million cost.

“All I’m asking for, all we are asking for is transparency,” said Valenzuela. “It’s not fair to say that we want transparency and then give half the information. We need to put all the information out there.”

The council will vote Wednesday to finalize the language of the initiative that will appear on the Nov. 4 ballot.