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June 1, 2016

Municipalities in Distress 101: York

Photo courtesy of Wikimedia

York, the birthplace of our nation’s first working Constitution, the Articles of Confederation, is rich in history and charm. With a gradually growing population of over 40,000 people, York boasts the cultural and recreational resources of a large city and the sense of community of a small town.

Yet, just like many municipalities across the state of Pennsylvania, York is facing mounting pension problems. Currently, 74 percent of York’s budget goes to pensions and the remaining 26 percent is left for roads, public safety, parks and other budget items. With more than $64 million in pension-related debt, York’s municipal pension fund issues put them at risk of serious financial distress.

What’s to blame for this unmanageable fiscal distress? The state’s outdated municipal pension model is setting communities like York and many others across Pennsylvania up to endure persistent financial stress. Ultimately, this complicates a PA municipality’s ability to budget and ensure crucial municipal services such as public works, public safety, snow removal, parks and recreation, and road maintenance are fully funded. According to York’s Mayor, Kim Bracey, “We’re begging our legislators to help fix the system so we can have our pensions 100% funded and fight other battles. Many have said we could find ourselves in an Act 47 position.”

Auditor General Eugene DePasquale has expressed concern that the City of York’s employee pension funds are slipping closer to severely distressed levels. “York is like many of the large and small communities across the state where they are struggling to meet pension obligations,” DePasquale said. “York is unique in that it continues to lag years behind in meeting its pension payments.”

Since taking office in 2010, Mayor Bracey has fought hard to solve the problems that impact York’s budget. In recent years, the City of York has looked to allocate funds in order to meet the increasing pension obligations. However, the costs are unsustainable. In fact, from 2011 to 2013, York’s overall funding ratio dropped from 62 to 58 percent. “We have done everything possible to fix our pension woes but they continue to mount. The system is simply broken. As stated previously, this is a fiscal crisis that needs attention now or many of Pennsylvania’s cities will be bankrupted, and I join mayors all across the state desperate for a real solution,” Bracey said.

Unless real municipal pension reform occurs, funding York pensions will continue to be a struggle. You have the ability to share your concerns with your Pennsylvania Senators and Representatives. Tell them you want action!  Tell them to fix the numbers.