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Make ‘Tough Decisions’ Soon

August 5, 2012
The Intelligencer / Wheeling News-Register

Wheeling's pension funds for police officers and firefighters are in much better long-term condition than similar programs in some other West Virginia municipalities. Unfortunately, that isn't saying much.

As we reported last weekend, the two retirement systems in Wheeling have a combined unfunded liability of about $52.6 million. Money in the police fund is adequate to cover only 35 percent of long-term needs. The firefighters system is 26 percent funded.

Statewide, the average percentage is only about 17, however. And some cities are in much worse shape; Charleston, for example, has a $250 million liability.

To their credit, Wheeling officials set up a multi-year schedule to pay down the liability. This year the city is to pay $3.35 million - about 11 percent of the general fund budget - toward that paydown schedule.

While that is a manageable number now, holding to the schedule will become more difficult. To meet it, the city's annual payment will go up to $4.7 million in five years - and to a whopping $7.06 million during the last year of the schedule, in the 2024 fiscal year.

Unrealistic planning for municipal police and firefighter pension programs - with much of it occurring in the state Legislature - is to blame for the liabilities. To some extent, cities remain handcuffed by state law in what they can do to address the shortfalls.

Obviously, that needs to change. Municipalities should be given full flexibility to avoid dumping huge burdens on taxpayers in the future - or defaulting on pension promises.

Various schemes to deal with the problem have been suggested during the past several years. Obviously, none has been appealing enough to be implemented.

At some point, "tough decisions" will have to be made about the pension programs, Wheeling Finance Director Michael Klug told our reporter. The longer decisions are put off, the tougher they will be. City and state officials should begin making them soon, to avoid fiscal calamities in the future.

 
 

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