Sheriff's Pension Plan

An interesting observation made today by Commissioner Craig Leuthold and Finance Director John Troyer during Commission's budget hearing.

Leuthold asked Troyer what the cost of the Sheriff's Office's defined pension plan was on an annual basis.

Troyer answered by saying the promise made by Knox County voters when they approved the defined plan, amounted to 131 million dollars.

To cover the cost, Mayor Ragsdale opted to take out a 20 year bond of 57 million dollars and absorb the Sheriff's Office employees existing plan of 30 million dollars.

But that still left the county more than 40 million dollars short. So how is the rest of it covered?

According to Troyer, 5 cents on the property tax rate goes toward the debt payment on the 57 million; and another nickle goes to cover the cost of the plan as it goes forward.

That extra nickle, in Troyer's words, is "alot."

Leuthold pointed out that the 5 cents could have gone toward the Sheriff's operating budget, or to education, or to paving the county's roads, or to any of a number of other areas. But since voters approved the pension enhancement it must go toward the pension plan.

Voters approved the pension plan - with language included in the referendum - that showed it could impact the property tax rate by as much as 8 cents.

A slight majority of Knox County voters said that was OK, but now it appears the cost will be more than that; and not just to the property tax rate, but also to services that won't be funded because of the pension obligation.