EYEWITNESS LOCAL NEWSPENSION PROBLEMS
from Eyewitness News Online
Pension Crisis Looming For Charleston and Other WV Cities
Reported by: Deborah Linz
Web Producer: Jeff Morris
Reported: Sep. 26, 2012 10:26 AM EDT
Updated: Sep. 26, 2012 11:22 AM EDT
Charleston , Kanawha County , West Virginia
Out-of-control pensions are draining cities and counties across the country. Several have had to file for bankruptcy as a result.
Eyewitness News Anchor Deborah Linz spoke with Charleston Mayor Danny Jones to see if cities in West Virginia could be next.
Jones said the pension problem in Charleston is $250 million.
That means if every police officer and firefighter in the city of Charleston were to retire, the city would be $250 million short in paying their pensions.
Jones has already had to cut 25 members of the fire department and 20 police officers to save money.
"It's going to cost taxpayers the continual raising of fees," Jones said.
Jones said the user fee will likely go up at least another dollar his next term.
But residents aren't the only ones paying the price – city employees haven't gotten a raise in four years.
Charleston isn't alone in its pension problems. A recent study found West Virginia cities must find $976 million in the coming years if they want to keep their promises to retiring police and firefighters.
The shortfall stems from a state law passed in 1991, allowing cities to lower their payments to uniform retirement funds.
Right now, Charleston pays 11.3 percent of its $84 million budget to pensions every year, that's about 9.5 million dollars
Huntington, on the other hand, is in far worse shape. Jones said the River City is ground zero, paying 25 percent of its budget to pensions. That means $10 million of its $40 million budget goes directly to pensions, consequently paralyzing the city from growing and reaching its full potential. Jones is adamant the Legislature needs to step up and fix the problem before it's too late.
"You wait for one of our cities to go bankrupt, and then they will have to act because it will hurt the state's credit rating," Jones said.
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