York mayor on pension crisis: 'The system is simply broken'

Mayor Kim Bracey during a new conference Monday endorsed bipartisan efforts by mayors, legislators and business leaders statewide to approve legislation to address Pennsylvania's growing municipal pension crisis.

The crisis is reflected in York's own pension fund, which was the subject of an audit released Monday by state Auditor General Eugene DePasquale and shared at an 11 a.m. news conference. Despite efforts to shore up the fund, increase funding for pension obligations out of the city's operating budget, and an improving stock market, York's overall funding ratio still dropped from 62 percent in 2011 to 58 percent in 2013.

Before the pension reform accomplished through the most recent FOP contract, general fund budget support for York's fund was projected to rise from 21 percent of the city's total spending in 2014 to 28 percent in 2015, which points to an unsustainable rate of long-term spending growth, according to a release sent out by the city. Municipalities across the state are facing similar pension difficulties, and Gov. Tom Wolf in his recent budget speech mentioned the need to strengthen municipal pensions.

"We have done everything possible to fix our pension woes but they continue to mount. The system is simply broken," Bracey said Monday. "As stated previously, this is a fiscal crisis that needs attention now or many of Pennsylvania's cities will be bankrupted, and I join mayors all across the state desperate for a real solution."

Bracey joined efforts by the Pennsylvania Municipal League and others to push for municipal pension reform, starting with discussions on upcoming House Bill 316. According to the release, the bill contemplates:

• All current employees being held harmless and retaining existing rights and benefits at current levels
• For new hires only, adoption of a cash balance hybrid plan that includes aspects of  both a defined benefit and a defined contribution plan
• Authorizing an optional 457 plan as an additional employee retirement tool
• Requiring pensions to be calculated on base pay and a small percent of overtime, curbing pension "spiking"
• Removing pension benefits from the collective bargaining process  
• Establishing pension plan portability options for new hires
• Improving job and pension security for uniformed unions

In addition, Bracey also is pushing a solution that resets state distribution formulas for pension aid.

"We are at the beginning of long but vitally important discussions on municipal pension reform," Bracey said. "Whatever form this legislation ultimately takes it must be a comprehensive solution to this statewide problem that keeps our financial promises not only to our workers, but our taxpayers too. We have no other choice."