County councilman proposes reducing pension payment to lower proposed tax hike

Nov. 19--WILKES-BARRE -- Luzerne County Councilman Harry Haas has proposed reducing the county's contribution to its pension fund next year as a possible way to avoid a tax increase in the 2020 county budget.

Haas proposed the idea during a Monday budget work session at which council discussed the pension obligation, projected to increase by $1.5 million next year in the budget proposal county Manager David Pedri submitted last month.

Pedri's proposed budget includes a 5% property tax increase. Pedri has said the tax hike is needed to pay for increased mandated expenditures such as heath care and pension obligations.

At Monday's work session, Haas suggested the county should not pay the projected increase in the pension payment for next year.

In a follow-up email sent Monday evening, Haas proposed a budget amendment that would reduce the payment from the budgeted $10.85 million to $9.35 million.

During the work session discussion, Haas acknowledged that "would not be the best thing" for the county's long-term financial health.

However, the short-term advantage of reducing or eliminating a tax hike next year cannot be ignored, Haas said. He also said the booming stock market should help the pension fund grow.

Other council members questioned the idea.

"I don't think it's fiscally the right move," said council Chairman Tim McGinley.

"Your idea might be good in the short term but it might be very problematic in the long term," Councilwoman Sheila Saidman said.

Haas agreed, but said he wants the county to do the best thing for everybody and that the proposed tax increase is "putting the taxpayer on the hook."

Council members including Haas said they want to hear from the county's actuary to gain insight into issues surrounding the pension payment.

During the discussion of pension issues, Pedri said he has been advised "the best thing to do for a pension fund is to hire people for Luzerne County."

He also said he has explored what it would take for the county to move from a pension plan to another type of retirement plan.

"I don't think it's really feasible," he said.

Pedri has previously said that contributions from current county employees are needed to partially fund the pensions of retired employees.

Council is holding a series of budget work sessions and hearings prior to its scheduled adoption of the final county budget on Dec. 10.

Three citizens spoke at the second and final budget hearing Monday, held between work sessions devoted to proposed budgets of county divisions.

Walter Griffith, who was elected to council this month and will take his seat Jan. 6, said three new proposed positions and proposed raises for the county's non-unionized employees, not to exceed 2% on average, should be removed from the budget.

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