Police Pension ADC Shortfall: $13.4M
Mayor Young's FY2027 Proposed Budget underfunds the Police Pension Actuarially Determined Contribution by $13.4M, the exact same amount it cuts from the 2019 voter-approved sales-tax pension transfer. Here is how that number was calculated, and what it does to the General Fund.
How the Shortfall Was Calculated
Line by Line from the FY27 Proposed Budget
Every figure below is pulled directly from the FY27 Proposed Budget exhibits. The math is intentionally simple, that is the point.
| # | Line | Amount |
|---|---|---|
| A | FY26 Police Pension ADC (adopted budget, Line 051307) What the actuary said was needed last year, and what Council adopted. | $36,142,478 |
| B | FY27 Police Pension ADC (Mayor Young proposed, Line 051307) Exhibit E, Police Services Expenditure Detail, p. 170. | $22,742,478 |
| C | Year-over-year ADC reduction (A − B) A 37% cut to the actuarially determined contribution. | −$13,400,000 |
| D | FY26 Sales-Tax Referendum Transfer (Exhibit B, p. 11) Dedicated 2019 voter-approved 0.5% sales tax for police & fire pensions. | $26,900,000 |
| E | FY27 Sales-Tax Referendum Transfer (Mayor Young proposed) Same line, halved with no narrative explanation. | $13,500,000 |
| F | Referendum diversion (D − E) Exact dollar-for-dollar match with the ADC cut. | −$13,400,000 |
The tell: Lines C and F are identical, −$13,400,000. The dollars the actuary said belong in the Police Pension are the same dollars cut from the dedicated voter-approved referendum transfer. The shortfall is not an accident of revenue forecasting; it is a transfer.
Interactive, The Diversion Visualized
From Voter-Approved Pension Funding to the General Fund
In FY26, 100% of the dedicated sales-tax referendum went to public-safety pensions. In FY27, roughly half is rerouted to plug the General Fund.
Where the 2019 Sales-Tax Referendum Actually Goes
Hover bars for detail. Toggle between dollars and share of the referendum.
Source: FY27 Proposed Budget, Exhibit B (p. 11) Sales-Tax Referendum Transfer; Exhibit E (p. 170) Police Pension ADC, Line 051307.
What the Shortfall Does to the Budget
The Downstream Impact
Pension unfunded liability grows
Underfunding the ADC by $13.4M in a single year compounds. The unfunded liability the 2019 referendum was passed to close gets pushed back onto future budgets, with interest.
Voter mandate effectively reversed
Memphis voters raised their own sales tax for one stated purpose: public-safety pensions. Cutting the dedicated transfer 50% while underfunding the ADC moves the money to the General Fund instead.
General Fund balances on the pension's back
The $13.4M freed up by underfunding the ADC is what keeps the FY27 General Fund at $897.7M without raising property taxes or cutting another visible line item.
Police recruiting and retention pressure
An ADC squeeze signals to sworn officers that pension promises are negotiable, at the same moment the budget books a $28M Police attrition credit and cuts $9M of overtime.
Sources
- Police Pension ADC, Line 051307FY27 Proposed Budget · Exhibit E, Police Services Expenditure Detail · p. 170 ↗
- Sales-Tax Referendum TransferFY27 Proposed Budget · Exhibit B, Revenue Detail by Category · p. 11 ↗
- 2019 Sales-Tax Referendum (0.5%)Shelby County Election Commission certified results · October 2019