Mayor Crews, Sen. Danielson: State Has Dropped the Ball on Funding For Fire, Police Pension Plans

Over the last four years, the City of Cedar Falls has increased annual payments to a pension fund for police and fire employees by almost $1 million per year.

Cedar Falls Mayor Jon Crews said increases in pension payments are one reason the city government thinks it is necessary to act now to prevent a budget shortfall in the future.

He said four years ago Cedar Falls paid $413,880 into the pension fun. This year it will pay $1,362,200.

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He blames the state legislature for the increase. In the early 1990s, the state of Iowa created the Municipal Fire and Police Retirement System of Iowa, also known as the 411 pension plan, which brought together hundreds of individual city's fire and police pension plans into one statewide program. At the time, the state legislature said it would pay a portion of the fund's bills. In the last few years, however, the state's payments have dropped to zero.

"They get to give the benefits to the employees, but then we get the bill and the blame for having to raise property taxes," Crews said.

Iowa Senator Jeff Danielson, D-Cedar Falls, would like to remedy the situation. He has introduced a bill in the state senate to do so.

"The state is currently behind its original promise in total $50 million. The state made a promise; it hasn’t kept it," he said.

He said it would be fiscally impractical for the state to repay the entire $50 million this year. Instead, he would like the state to pay about $9.8 million this year, or about 3.8 percent of the fund's bill.

"We have to start somewhere," he said. "This is currently an unfunded mandate."

Asked whether current fire and police employees should contribute a higher percentage of their paychecks to the pension fund - the percentage has been frozen at a 9.4 percent cap for the last several years - Danielson, who is a firefighter, said he wants the state to fulfill its obligations first.

"There is not a single police or firefighter in the state who isn’t willing to talk about what their contribution should be. But right now, we’ve kept our promise, we make our contributions," he said. "It seems to us that the major problem right now is the state has not kept its promise."