Anyone have a billion dollars to spare? That is how much money the municipalities in West Virginia are short of meeting their pension obligations to their police officers and firefighters.
Charleston city treasurer Victor Grigoraci detailed this problem to city council members in March. He studied the 53 separate police and fire pension plans in West Virginia.
Grigoraci found that as of July 1, 2012, they had promised their uniformed officers a combined $998,321,288 more than the cities had put aside.
The plans are 20 percent funded. Charleston’s two plans are only 6 percent and 8 percent funded.
While legislators have dedicated a tax on insurance premiums to these city plans to the tune of $17 million a year that is far from the money needed.
Cities have upped their contributions to the plans about 50 percent above normal. Employees also contribute to their retirement.
In his report, Grigoraci said that as towns and cities are subdivisions of the state, the state ultimately is on the hook. He pointed out that as the state has in the past decade fixed its worker’s compensation and medical malpractice problems, the state can fix this problem.
Legislators who regulate municipal pensions must do something. But what? An agreement by unions and city officials in Detroit gives hope.
Unions agreed to scale back the pension plans in the face of the city’s bankruptcy court proceedings.
“Detroit’s current pension system simply costs too much relative to its battered tax base, and the watchword for Detroit this summer is feasibility,” the New York Times reported last week.
But one big question is whether the city can legally cut government pensions while in bankruptcy court.
People who are willing to take a bullet for others or to rush into a burning building to save a life deserve good pay and benefits. Yes, in some cases they retire at 50 to a similar job. But they earn those pensions.
The problem is figuring out a way to pay for them. Right now, the state is a billion dollars short.
— Charleston (W.Va.) Daily Mail