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May 16, 2016

Municipal Pension Distress in 66 of 67 PA Counties

(Image courtesy of Pixabay)

66 of Pennsylvania’s 67 counties have at least one municipality with a pension plan under financial stress. What’s to blame for this unmanageable fiscal distress? The state’s outdated model is setting Pennsylvania communities up to endure this financial downfall. Here’s how Pennsylvania counties are suffering and handling the cutbacks.

Northampton County

Located in Northampton County, the historic town of Bethlehem faces challenges to provide necessary government services. Bethlehem’s non-uniform and police pension plans are carrying a debt of nearly $53 million. In addition, the members of the community are now carrying the bill, a total unfunded liability of $931 per capita.

Lehigh County

Fountain Hill Borough in Lehigh County finds itself in a tough situation. Currently, the municipality carries an unfunded amount of $315 per capita. The Borough Council voted to raise the 2016 property taxes by 27%, increasing the tax rate from 5.61 mills to 7.11 mills. This increase will cover the debt and negatively affect Fountain Hill residents.

Alongside Fountain Hill, South Whitehall Township suffers from an unfunded pension liability of $501 per capita. The 2015 South Whitehall Township budget included a proposed 36% tax increase to cover the municipality’s rising pension costs even with significant budget cuts.  Budget cuts reduce the quality of life services South Whitehall taxpayers enjoy.

Blair County

At the center of Blair County sits Altoona. The city is popular for being the birthplace of Sheetz. It’s also becoming known for their pension crisis due to reaching 74.79% of its pension funding in 2014. This was low enough to put Altoona in distress, which occurs when a plan is below 90% funded. The distress is costing residents $107 each and will continue unless we obtain meaningful municipal pension reform.

Lancaster County

The bustling county of Lancaster is home to plenty of tourism and industry. On the outside, the community appears “manageable,” but there’s a downward trend. Lately, Lancaster can’t hire additional services including police and firefighters because of the cost of current pension liability.

York County

Today, York is facing a mountain of pension problems. Currently, 74% of York’s budget goes to pensions and the remaining 26% is left for everything else including roads, public safety and park. Only one fourth of the city’s budget is dedicated to improving community services. This budget strain puts York at risk for financial distress.

What can we do to help?

The first step to fixing the problem is to enact municipal pension reform. Tell your PA state legislators that you want them to #fixthenumbers.