Sunday, June 27, 2010

Pension crisis a costly matter

There is a sobering article in today's Courier Times about the pending Public School Employee Retirement Systems (PSERS) pension crisis . . .

Local property owners face hefty tax increases to pay for underfunded state retirement benefits over the next several years. As school district officials across the county were approving final budgets this month, they weren't just thinking about the next school year.

Even though Neshaminy and Bristol Township school districts still have to approve their budgets this week, administrators have also been trying to plan what to do for at least the next several years because of a looming state pension crisis. Many districts are stockpiling money in rainy day funds to make up for stock market losses and contribution rate spikes to the Public School Employee Retirement System of between 16 percent and 35 percent from 2012 to 2016. But with the size of the storm that's brewing, school officials are worried that it won't be enough without legislative action.

The increases translate to tax hikes of anywhere from $200 to $2,000 a year over the next several years, according to the Pennsylvania School Boards Association. This means current tax bills could double or triple by the end of the coming spike in retirement costs. For instance, a homeowner with a Neshaminy School District tax bill of $4,400 this year could see it go up to almost $5,000 by 2015, officials said.

There is a chart in the newspaper that isn't in the online edition that shows Neshaminy residents could face an average tax increase of $1,571 over four years to fund this pension deficit.

When you contact your Harrisburg rep to demand their intervention, don't be fooled by the usual pledge that they will do something about it. This problem isn't new, and it's something that THEY created. We've seen this coming for several years now, but the folks in H-burg have procrastinated until now before they would even consider some sort of fix. You can ask them why they waited so long, but is there really any good excuse?


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