Friday, July 27, 2007
Pittsburgh Pensions Are the City’s Responsibility
Mayor Ravenstahl and City advocates continue to beat the drum for a state bailout of Pittsburgh’s heavily under funded pension plans. Claims are repeatedly made that municipal pension problems are epidemic across Pennsylvania and that only state tax dollars will be able to solve the problems. Not so. There are 3,129 local government and authority plans in the state. Pittsburgh and Philadelphia account for 75 percent of all unfunded liabilities.
In Allegheny County, there are 294 municipal and authority plans. The ratio of funded to total liabilities for all plans excluding Pittsburgh is 96 percent. Only 7 plans were below 60 percent funded. In short, Pittsburgh’s municipal plans account for over 90 percent of all the unfunded liabilities in the County. The Allegheny County plan is close to fully funded. The City’s authority plans are fully funded.
Pittsburgh’s unfunded liability problem is the result of overly generous provisions in the plans and years of inadequate funding by the City. And it is not the state’s fault. Pittsburgh gets over half of all the state funding for municipalities in Allegheny County. And the City has only one quarter of the population.
It is not the responsibility of taxpayers in other communities to remedy the City’s mistakes, the excessive generosity and the failure to fund plans at an adequate level.
Indeed, the state and school pension plans will soon develop their own massive problems as result of excessive generosity of the legislature. Taxpayers will have enough burden covering those acts of imprudence.
In Allegheny County, there are 294 municipal and authority plans. The ratio of funded to total liabilities for all plans excluding Pittsburgh is 96 percent. Only 7 plans were below 60 percent funded. In short, Pittsburgh’s municipal plans account for over 90 percent of all the unfunded liabilities in the County. The Allegheny County plan is close to fully funded. The City’s authority plans are fully funded.
Pittsburgh’s unfunded liability problem is the result of overly generous provisions in the plans and years of inadequate funding by the City. And it is not the state’s fault. Pittsburgh gets over half of all the state funding for municipalities in Allegheny County. And the City has only one quarter of the population.
It is not the responsibility of taxpayers in other communities to remedy the City’s mistakes, the excessive generosity and the failure to fund plans at an adequate level.
Indeed, the state and school pension plans will soon develop their own massive problems as result of excessive generosity of the legislature. Taxpayers will have enough burden covering those acts of imprudence.
