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Host: Scott LaMar

Radio Smart Talk: PA municipalities face $ challenges

Written by Scott LaMar, Smart Talk Host/Executive Producer | Apr 26, 2013 8:40 AM

Radio Smart Talk for Friday, April 26:

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Distressed municipalities in PA

It's estimated that pension plans for Pennsylvania state workers and school employees are underfunded by about $41 billion.  Those pensions have garnered much attention from Gov. Tom Corbett and state lawmakers the last few months.

What hasn't gotten as much notice is the underfunded pension plans for retired municipal workers in Pennsylvania.  They total about $6.6 billion.

Pennsylvania has almost 2,600 municipalities and more than 3,200 local government pension plans -- about a quarter of all such plans in the nation.

The Pennsylvania Economy League reports 41% of all the state's population live in municipalities that are financially distressed.

As a result, the pension crisis is just one of several challenges municipalities are facing.  Cities, boroughs, and townships say they are all dealing with issues such as arbitration awards and unfunded mandates as well.

On Friday's Radio Smart Talk, we'll hear from Lancaster Mayor Rick Gray, Chambersburg Borough Manager Jeffrey Stonehill, and Greater Reading Chamber of Commerce and Industry President and CEO Ellen Horan.  They're all part of the organization Coalition for Sustainable Communities.

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  • Radio Smart Talk img 2013-04-26 08:36

    E-mail from Thomas:

    "Why is it that Lancaster city lost a lot of family sustaining jobs, and it seems the city does not attract industry, just service jobs that do not pay family sustaining jobs? Lancaster has lost large industrial plants that pay property taxes to be replaced with "boutique hotels, convention centers, and ball fields" that do not pay the taxes that industrial plants pay, nor pay the wages.

    To me it seems that if a city wants to succeed financially, they need family sustaining jobs, that fund home purchases, and home ownership that contributes to a safe and vibrant city."

  • Radio Smart Talk img 2013-04-26 08:37

    E-mail from Tom:

    "'Affordability' is too subjective a term to be a hard and fast fact when determining limits of municipal obligations. It is in the eye of the beholder. Obligations to the taxpayers are no different than obligations to public employees, who are also taxpayers. Yet it seems that public employees are always the target, the blame, and the cause of “unsustainability”. When in fact, many municipalities do not want to risk the ire of the taxpayer by not preparing for what they see down the road. It is a tough job with tough, unpopular decisions to be made, but obligations are obligations. Otherwise, expensive court battles lie ahead."

  • Radio Smart Talk img 2013-04-26 10:48

    E-mail from Neil:

    "Are any of today's panel or the Coalition for Sustainable Communities participating in the movement to call a Pa State Constitutional Convention to address reforms? The State and local governments are in a straight jacket under the current State Constitutional restrictions when it comes to altering taxing models to reflect the changes in communities, leaving few options, meaning taxes repeatedly fall on too few because of the limited avenues for taxes. People should be able readjust their tax schemes to create an equitable system to support local services."

  • Radio Smart Talk img 2013-04-26 10:48

    E-mail from William:

    "Pension issue for Police and Fire. Retirement age for PA Cities is 50 years old by state law. According to a CALPERs study the average mortality for an officer that receives life time health care is 86. This means that our city has to pay for 36 years of retirement for an officer that only works for 20 years. The law was past in the 1950's when mortality was 65 and although the state increased the age for newly hired state police to 55 they refuse to do the same thing for cities due to organized public safety union lobbying. An increase to 55yrs would save us 10% on our unfunded liability.

    A single unified pension system for all (public safety) municipalities where there is an equal contribution between the employee, the municipality and the state is the real solution. Why is it not considered?

    2. A statewide Non-profit payroll tax (mandatory contribution) would also solve the problem of municipal funding for non-contribution by the mega meds and eds so called non-profits."

  • Radio Smart Talk img 2013-04-26 10:49

    E-mail from J.:

    "If your legislators won't commit to helping you in these reforms... would you (personally) consider running for the state legislature, highlighting these important issue as the impetus for the campaign?

    I know you both probably enjoy being chief executive as opposed to a legislator, but why not? Consider it a sacrifice to do the right thing."