Covington Mayor: Cities Should Not Suffer Because of Pension Board's Inaction
Cities face many financial hurdles every day. We work to provide our citizens essential services, from police officers and firefighters who are there in your time of need to safe roads and sanitation systems. There are a lot of expenses with limited income opportunities. Most city officials have learned to do more with less.
That will soon be tested at a level most cities, like mine, will find hard to overcome. Last July, the gubernatorially controlled Kentucky Retirement Systems (KRS) Board of Trustees approved drastic assumption rates for the County Employees Retirement System (CERS). Covington is facing a $3.2 million increase come July 1, 2018. That is money needed for public safety, street repairs and public programs. Instead, it will all be used to cover a debt arbitrarily imposed on the city by the board. We are not alone; the county and the local school system also face a looming bill.
Cities have always paid what was required for our employees’ pensions. We will continue to meet our obligation, but the impact of this extreme increase could have been lessened if the KRS Board would have voted to phase in the rates, as many systems across the country have done. They refused to act and now it is up to the legislature to step in and pass a bill that will ensure local governments don’t crumble under this enormous burden.
Local employers need some type of rate relief. If legislators refuse to provide it, many cities could see layoffs and devastating cuts to the programs and services people depend on. There is no room for political games in this issue. Senate Bill 1, the pension reform legislation currently being debated in the legislature, would have a minimal impact on the CERS unfunded liability and would result in even higher employer contribution rates due to the switch to level-dollar funding. Rate relief for CERS employers is not tied to the bill — one is not dependent on the other.
Regardless of what happens to Senate Bill 1, action must be taken to ensure local communities don’t suffer due to the inaction of the KRS Board. It would be unconscionable for the General Assembly to leave their constituents hanging in the balance.
Joe Meyer is the mayor of Covington