Counties, cities may give more to pensions: State board slated to take up proposal for bigger contributions
Local governments already worrying about their fiscal 2010-11 budgets got a bit of bad news this month, learning they'll likely have to spend more to underwrite their workers' future pensions.
Officials with the N.C. League of Municipalities told their member governments last week that a state board in January will take up a proposal to require cities and counties to pay more into the statewide local-government pension fund.
The suggested increases would ask them to pay 6.35 percent of payroll into the N.C. Local Government Retirement System for civilian employees and 6.82 percent for sworn law-enforcement officers, league Executive Director Ellis Hankins and Chief Legislative Counsel Paul Meyer said in their Nov. 17 warning message.
Cities and counties now pay 4.8 percent of payroll for civilian workers and 5.27 percent for sworn law enforcement. The rate has been steady for more than 20 years.
…The state…had only to pay 3.57 percent of payroll into its system when in theory it should have had to put in 6.3 percent.
Employer contributions to the state-employee system will have to rise to 6.71 percent next year to make up for the loss of investment earnings, officials with the state treasurer's office said last month.
A similar problem confronts the local-government fund.
"Even if we achieve investment target returns as the economy recovers, it is very likely that the funded status will continue to decline as losses from the 2008 downturn are distributed over the next several years," State Treasurer Janet Cowell said in October. "State and local governments will need to continue to budget for increased contributions to the system."
…retirement system analysts see pressure for additional increases lasting until 2016, possibly reaching 11 percent of payroll.
Ray Gronberg
1/25/10
Did Greensboro’s City Council document the conclusion that the budget could support more local tax revenues to fund municipal employee pensions on top of confiscated beer and wine taxes, $4 million for a hotel parking deck and more funding cuts from Guilford County?
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2 comments:
No Greensboro needs to handle this in the same manner that any other business would handle it. When a business falls on hard times, it must look at its expenses, and eliminate unnecessary cost. In recent years this has required that no pay increases be given, and that unnecessary positions be eliminated. Greensboro needs to implement a zero based budgetting system.
Let's not spend more than we make on what we don't need.
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