Philly’s Unfunded Pension Liabilities: $5.3 Billion
A stark reminder of the seriousness of the “pension crisis” you hear about so often: A new report says that Philadelphia is $5.3 billion behind on payments to the pension system that is supposed to pay for the retirements of its municipal employees.
The city is far from alone: An audit released Wednesday by State Auditor General Eugene DePasquale says that 562 Pennsylvania cities are collectively $7.7 billion under water — up from $6.7 billion two years previously.
“It’s gone up by $1 billion with no sight of action yet by the Legislature,” DePasquale said. “There’s no way around it; we need a statewide solution.”
The likely result of the shortfall? “If you live in any of these municipalities, if it’s not addressed, you’re going to be dealing with tax hikes or cuts to public safety or a combination of it,” DePasquale said.
DePasquale’s report offers 13 recommendations to resolve the issue; one involves consolidating all the funds at the state level.
“As I said a year ago when I initially raised the issue, our municipal pension challenges are not going away,” DePasquale said. “It is important to note that this increase in pension liability has occurred during a growing economy. Clearly, these pension challenges cannot be corrected by a strong stock market. This is going to take some decisive actions by the governor and the legislature to prevent this municipal pension issue from crippling state and local taxpayers, and jeopardizing the future for our communities.”
Patrick Kerkstra’s 2012 Philly Mag piece on the pension crisis remains, almost three years later, one of the definitive takes on the matter.