PENNSYLVANIA – State Auditor General Eugene DePasquale only stated the obvious Wednesday when he reported that city pension deficits are pushing Scranton toward insolvency.
The city pension fund for firefighters is financed at only 16.7 percent, and within 2½ years, Scranton will not be able to pay benefits to retirees, Mr. DePasquale said during an announcement at City Hall. The police and nonuniform pension accounts are only slightly healthier, he said.
City pension funds may owe retirees up to $10.5 million resulting from a court order to provide $21 million in back pay to police officers and firefighters, he said.
Scranton has become toxic to lenders because of its fiscal instability, and Mr. DePasquale said the city could be pressed into bankruptcy within five years.
Dozens of municipalities in the state face pension distress, but Scranton’s situation is the most dire example, Mr. DePasquale said.
Mayor not at fault, but his problem
Despite the significance of the state auditor general’s announcement, Mayor Bill Courtright took a pass on Mr. DePasquale’s City Hall appearance. The mayor said he had a prior engagement at a school.
He surely was aware of the severity of the pension emergency anyway and his time would have been spent better at city fire headquarters discussing the calamity with union members.
Mr. Courtright is not responsible for the city’s predicament, but he has an obligation to address it. He wants to lease or sell of the Scranton Sewer Authority and use proceeds to shore up pension funding and hopes the recently enacted commuter tax will help relieve the distress.
Mr. DePasquale, though, provided sensible advice by calling for comprehensive municipal pension reform. Merging municipal plans into a statewide system and boosting state revenue for communities with endangered pension funds are valid proposals.
The city, though, first must obtain pension concessions from municipal unions, and it is in their best interest to comply.
The situation is unsustainable. The crisis is here.
http://thetimes-tribune.com/opinion/pension-crisis-now-official-1.1744091