The City of Dallas is prepared to provide $1 billion to the struggling Dallas Police and Fire Pension fund, according to a new plan unveiled Wednesday.
The pension fund has asked the city for a $1 billion bailout to be paid in 2018. The city says that would amount to a $2,000 tax increase for the average homeowner – an amount Mayor Mike Rawlings calls ridiculous.
But for the first time Wednesday, it became public knowledge Rawlings is willing for taxpayers to contribute that amount of money over the course of 30 years.
Dallas's chief financial officer explained that would amount to about a $115 tax increase for the owner of a $24,000 home.
“I think the combination of us putting over a billion dollars over 30 years will get it back to a place that we'll be solvent. A situation for the future -- for a pension fund that will be there a long, long time,” Rawlings said.
The mayor has criticized the high interest feature offered to police and fire known as the deferred retirement option plan. The plan allows public safety employees to keep working while receiving pension checks that are deposited DROP. Their money has been earning a guaranteed 8 percent interest rate.
The city's CFO says one drop account reached $4.3 million and more than 500 accounts are over $1 million.
The city's plan would end interest for drop and could lower the pension payments for those who already received the high interest when they withdrew their money.