Yesterday, members of Mayor Michael Nutter’s campaign listserve received a plea for action from the Mayor as his administration readied itself to resume an important fight with members of City Council over the city’s Deferred Retirement Option Program, better known as DROP.
The letter called on supporters to sign a petition demanding that Council pass legislation eliminating DROP, which has effectively allowed city employees to shake extra money out of the pension system– in some cases, a whole lot of it– immediately upon retirement.
That would require Council to depart from the position it took earlier this year, when a 14-member majority of Council voted to leave a modified DROP in place. In June, Nutter vetoed Council’s bill, and its members chose to adjourn their session without taking further action. But the Council majority in favor of retaining a modified DROP is large enough to override the Mayor’s veto if its members chose to do so.
The Mayor’s letter argued that DROP, which has cost the city more than $100 million since it was introduced in 1999, would cost taxpayers an additional $15 to $20 million as modified. That, he wrote, was “too much.”
His opponents dispute his numbers, and claim that the additional cost would be less. But that is no argument.
Analysts with no personal stake in this debate have concluded that if Philadelphia’s pension system doesn’t begin collecting considerably more money, it will be insolvent in a few years’ time. Larger-than-necessary pension outlays, such as those called for in the vetoed bill, are indefensible regardless of their size assuming that city leaders’ goal is to keep the pension system in existence for beneficiaries who depend (or will depend) on it.