Chilton: Rise coming in pension payments
According to State Budget Director
For
The total increase to
It doesn't stop there. School boards, special districts and boards, utilities, planning commissions, community action agencies, libraries, housing authorities -- all of them will be seeing their pension costs going up by half or more.
In
For
"Our analysis is a bit higher, likely because we are hiring the additional seven police officers authorized by the fiscal year 2017-18 budget," Parrish said on Friday. "Assuming that no legislative changes are made during the upcoming special session of the
For the
"This may give you some sense of how significant this increase is to the city budget," Parrish said. "Not to be too simplistic, but the city will have two options to deal with the shortfall: Cut expenses (reduce services -- that is, lessen parks opportunities, reduce public safety staff, limit street repairs) (and) raise revenues (taxes)."
Parrish called the increase "untenable" for the city. "This increase is so large that reductions to make up the loss will change the entire complexation of this government and its services to the public," he said. "The best thing the state could do, from my perspective, is to slowly increase rates over time so that we can absorb the cost rather than a large grab for funds over a short time."
The city is already having trouble recruiting some workers because pay rates are comparatively low. Less attractive pensions makes city pay even less attractive, he said.
"We are suffering significant shortfalls in recruiting and retention of CDL drivers (and others)," Parrish said. "That means that not only will we have to pay more to the state for the pension system, but I will also have to pay more in local salaries to make up for the loss of the pension."
Mayor
"I'd like to see it phased in over a three-year period so it's not such a financial hardship on cities of all sizes," Watson said. "That will bankrupt some of them. Then, if we have to come up with it, look out, here comes more cuts. It will be difficult. It's hard to promote your city when you are constantly having to cut services and limit things."
A special session of the
"To address budgetary implications to the Commonwealth and to all employers, priorities must be set and choices must be made," Chilton said. "Unfortunately, the choices are not happy choices -- make structural changes to the pension plans and/or reduce other spending.
Although
"We can take this for one year or maybe even another," Mattingly said. "But this is a big hit -- and not just for government. This is a big hit on the citizens, because we may be able to take it out of reserves this year, but that means less miles of road we pave or fewer projects we put on in the parks."
Mattingly said the local government cost projections add fuel to a pension fire that's already out of control.
The increases are based on payroll size. But even smaller entities will have to pay more. For instance, the Riverpark Center will have to fork over an additional
The CERS plans are better off than other
"This is in spite of the fact that the assessment of funding levels is based on the old actuarial assumptions that were used in the fiscal year 2016 calculations," Chilton said. "Applying realistic assumptions, CERS plans' funding levels are actually much lower. In addition, using the same investment rates of return that corporate plans are required to use -- the Corporate Bond Index rate -- the CERS unfunded liability goes from
Steve Vied, 270-691-7297, [email protected]
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