December 14, 2015

Plain Talk: Municipal Pensions DO Affect You

Municipal pensions can have a serious impact on municipal services, like roads and trash pickup.


Image courtesy of Wikimedia Commons

Maybe you’re years from retirement, or maybe it’s right around the corner and you’ve been diligent about keeping up your 401k. Perhaps somebody in your family was a police officer or a firefighter. You might not even live in an area affected by Act 47. Surely, you think, municipal pensions are a problem that only matters to municipal public safety employees.

The truth is, as in many cases, much more complicated – and yet, simple. Municipal pensions DO affect you, no matter where you live in Pennsylvania.

Uncontrolled legacy pension costs for public safety employees are a threat to every community in Pennsylvania, regardless of your area’s Act 47 status. Sixty-six out of 67 counties in Pennsylvania have at least one municipality that’s threatened with financial stress from overburdened municipal pension plans. These affected communities range across the board from rural to urban places, including places like Farrell, PA, where the city’s unpaid pension liabilities amount to $343 per person. Even if you don’t live in an affected municipality, the issue can snowball. Farrell, for example, shared police services with two neighboring communities, so lack of available funding affected them all.

Even fiscally sound municipalities are impacted by unsustainable municipal pension costs. Look at Lancaster, PA. Their municipal pensions are considered “manageable,” but look at trend projections and you’ll see that it’s “spiralling out of control.” Unable to hire additional police officers, Lancaster is now facing a real threat to public safety. Communities throughout Pennsylvania may well find themselves in similar situations – even if everything looks fine today.

And, the impact is on more than just public safety. Municipal services we take for granted, such as snow removal and garbage pickup, are so-called “quality of life” services – and they’re often first in line for cuts when municipalities need to make tough choices regarding their finances. While decision makers don’t want to choose between filling potholes or hiring additional officers, they often need to make choices aligned with public safety…even if it means your car’s rims are in danger.

At the end of the day, it doesn’t matter where you live. When municipal pensions spiral out of control, everyone loses. Communities are unable to hire more police officers, need to cut municipal services, implement new taxes, and more – just to stave off bankruptcy.  Municipal fiscal instability has a ripple effect – moving outward and blanketing the Commonwealth.

But there’s good news. You can help us to fix the numbers. In less time than it takes you to swerve around a pothole, you can send a letter to your House and Senate members urging them to take action. This is everyone’s problem – now, let’s make it everyone’s solution.