Why Phoenix pension reform starting from scratch

A public vote on Phoenix pension reform will have to wait.

The architect of the plan, City Councilman Sal DiCiccio, has pulled the plug on the ballot measure. Well, hit reset anyway.

This after supporters took out petitions for the “Responsible Budgets Act” around mid-January. After DiCiccio seeded the effort with a $25,000 donation from his excess campaign funds and since put in another $40,000 or so.

After collecting what should be more than the 20,510 voter signatures needed to put the plan to a vote this fall. So what gives?

Bad signatures, apparently. DiCiccio said this week that, despite an estimated 31,000 signatures gathered by petition circulators, he doesn’t believe there are enough valid ones to qualify the measure. The nature of the invalid signatures isn’t clear; the magnitude is.

“I just don’t have confidence,” DiCiccio said.

Getting back on track isn’t a process of separating the wheat from the chaff and simply adding new signatures to the valid ones already collected. That’s because under Phoenix law, petition signatures have a shelf life of six months — in essence, backers have a window of six months to collect signatures and submit the petitions.

Then there’s the timetable of restarting the campaign. DiCiccio and co. will now eye collecting signatures anew possibly late October or early November, given that the services of petition circulators will be locked up by candidates and causes who need canvassers for the Nov. 6 general election.

That would indicate a public vote won’t happen until March or May 2019.

The measure is a big deal. It would require the city to spend almost all excess general-fund revenue to pay down its pension debt, change how it calculates that debt and end pensions for elected officials.

DiCiccio has railed against the city’s ballooning pension liability for the better part of the last decade, and its implications for the city budget and services. Phoenix’s public-safety pension costs have shot up from $56 million in its general fund in 2007 to about $207 million last year, a jump of 270 percent.

The proposal DiCiccio supports would drastically raise the pension liability total, which he believes is even worse than portrayed. He is, in essence, trying to create a stark picture to force the city to rein in spending.

“I just don’t have confidence.” Phoenix City Councilman Sal DiCiccio

On whether a “Responsible Budgets Act” petition effort would have enough valid signatures.

Presently, the industry standard allows the pension liability to be reduced by the projected investment gains of the fund – that is, the assumed rate of return. DiCiccio favors replacing that rate of return with lower 10-year historical returns he says are more realistic.

For the upcoming years, for example, instead of 7.4 percent projected earnings, it’d be adjusted to the 4.6 percent average for the last decade.

The measure would also require Phoenix to fund the pension plans at an ambitious 90 percent – with police, fire and other public safety workers first – or else freeze its general-fund budgets beyond population and inflation growth.

By comparison, of the 230 municipal public safety agencies that are part of the state Public Safety Personnel Retirement System, only 35, or about 15 percent, have funded their pensions at 90 percent or higher.

Regardless of the merits of the Phoenix measure, the new timetable is terrible for voters.

Turnout for city elections is already dismal. The last mayoral election, in 2015, drew less than 21 percent of the electorate — and that was with four of the eight council seats also on the ballot.

Even had it qualified for the November special mayoral election,turnout would likely be no better.

A special election for ballot measures in the spring will mean even fewer voters. That’s hardly the way to determine whether Phoenix adopts a severe approach to pension reform.