Our local governments are facing multibillion-dollar deficits that will, unless leaders take tough action, continue growing, consuming an ever larger share of taxpayer dollars.

The problem is the pensions due to public employees, a problem that has grown into an actuarial nightmare threatening to affect basic government services. Our elected officials have tried to fix the problems. But they haven’t done enough.

The numbers are so big, they’re hard to grasp:

The state of Ohio faces a gap of $77 billion between what it owes to its five public pension plans and what it has funded. That’s more than the gross domestic product of Panama.

The mounting pension liabilities are putting pressure on municipal budgets that are already strained. These pension gaps will continue to be a threat to taxpayers unless legislators summon the will to make more substantial changes.

Some experts, including the Pew Center on the States, point to Rhode Island’s reforms as a possible model. Rhode Island suspended cost-of-living raises for retirees until the system is fully funded (that could be decades); raised the retirement age for all workers to be in line with Social Security’s guidelines; and created a hybrid traditional-401(k) style plan for current employees, not just new hires.

Legislators need to work up the political courage to take the next step, rationalizing benefits for current workers, before the pension gap saddles future generations with unsolvable financial problems.

Cincinnati Enquirer

 

Local governments can’t be forgotten in budget

Despite expectations the state will enjoy a budget surplus at the end of the current two-year fiscal cycle, Ohio legislators may not feel they can afford to reverse all the cuts made in state aid to municipalities and counties.

Still, as we have pointed out, it would make sense to provide more state aid to local governments facing special budget challenges of their own.

Ten other legislators have introduced a bill to restore state aid to localities to the same levels they were in 2005.

As state Rep. Jack Cera, D-Bellaire, pointed out last week during a meeting with officials in Belmont County, “Our local communities are struggling to make ends meet and provide basic vital services. … enough is enough.”

Not all villages, cities and counties in the Buckeye State are facing the same challenges. As the state’s economy picks up, some local officials may have little, if any, trouble funding services.

But things are different in some regions of the state, including here in Trumbull and Mahoning counties.

It is doubtful the measure (House Bill 17) will be enacted. Gov. John Kasich and many legislators are unlikely to go along with a blanket restoration of local government aid.

Still, consideration should be given to more state aid for beleaguered villages, cities and counties that are not enjoying the economic resurgence helping some regions of Ohio.

Warren Tribune Chronicle