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June 13, 2016

On the Brink: Lower Burrell, New Kensington, and Arnold

ower Burrell, New Kensington, and Arnold

Photo courtesy of Wikimedia

The small steel mill cities of Lower Burrell, New Kensington, and Arnold lie about 18 miles northeast of Pittsburgh along the Allegheny River. Lower Burrell is home to the historic Allegheny River Lock and Dam No. 4, which is listed on the National Register of Historic Places. The New Kensington Production Works Historic District was the original production site for Alcoa, helping to bring aluminum goods to America and the world.

The river lies in the heart of these communities, but unlike its waters, the cities’ finances haven’t flowed so smoothly. Despite their rich industrial history, these communities are burdened by the weight of municipal pension funds that they simply can’t sustain.

Budget Shortfalls Leave Services Neglected

While working on the 2016 budget, Lower Burrell faced a deficit of $500,000. Improvements to the city park system were boosted by a bequest from the estate of a local couple and a grant from the Community Foundation of Westmoreland County. The Council considered raising taxes to pay for the city’s $3 million sewer budget.

In 2013, Arnold was forced to close its Fire-EMS service due to a high percentage of patients using Medicare and Medicaid, which do not fully reimburse ambulance services. The New Kensington Ambulance Service took over Arnold’s ambulance needs at that time. But today, New Kensington Ambulance service is asking Arnold for financial assistance after the city provided less than 1% of its budget to the emergency service.

Three Cities, One Common Challenge

The three cities carry unfunded actuarial liability per capita of $239 for New Kensington, $286 for Lower Burrell, and $461 for Arnold. As of 2013, Arnold’s municipal pension was only 69% funded, leaving it “moderately distressed” by the State’s reckoning. In 2015, Arnold increased the wage tax to 1.3 percent, with the increase going toward the city’s pension fund.

With such a burden, the communities have been forced to make hard choices about where to best spend the rest of their shrinking budgets. And they’re not alone, with 41% of Pennsylvanians living in a community that is financially distressed. You can call for a solution to this problem by contacting your Pennsylvania Senators and Representatives and telling them to fix the numbers.