Pa. auditor general unveils pension fund numbers
State to give Northampton County $9.3 million, Lehigh County $8.9 million in help.
Pennsylvania Auditor General Eugene DePasquale came to Easton City Hall Thursday to announce $299.1 million in funding for police, firefighter and municipal employee pension plans.
The funds, which are released annually, come from a 2 percent state tax on casualty and fire insurance premiums paid to out-of-state insurance companies.
“This money is critical to avoid either one of two things: either benefit cuts or tax increases on the local level and still making sure that cities can hire the necessary public safety officers that they need to make sure their cities are safe,” DePasquale said.
Lehigh County will receive $8.9 million and Northampton County will get $9.3 million. Lehigh Valley’s cities will also get assistance, with Allentown being given more than $5 million, Bethlehem $3.9 million and Easton $1.5 million.
Last year DePasquale’s office designated $289.9 million in pension aid to municipalities across the state. Lehigh County received $8.7 million and Northampton County received $9 million last year.
“This funding is helpful in the short term, there’s no question,” DePasquale said. He and Easton Mayor Sal Panto support pension reform.
Panto, who is also the president of the Pennsylvania Municipal League, said the city puts another $5 million toward legacy costs in addition to the state funds.
Easton’s unfunded pension liability grew by $19.03 million between 2009 to 2013, and for six years, DePasquale’s department determined the city’s pension levels were at a “Distress Level II,” which allows officials to charge a nonresident earned income tax known as a commuter tax. They also collect a 1.45 percent tax on the earned income of city residents and people who work in the city and don’t pay the tax to another municipality. The Easton Area School District also collects 0.5 percent, for a total earned income tax of 1.95 percent.
The money raised by the nonresident earned income tax accounts for more than $2 million that’s applied to the cost of the city’s pension plans, city officials have said.
Easton will lose the ability to charge nonresidents an earned income tax once the city’s pension plans are 70 percent funded.
Panto said Thursday that the city’s fire pension is just short of 69 percent funded, while its police and nonuniformed employee pensions are funded in the mid-50s.
The tax on out-of-state insurance companies also goes toward volunteer firefighters’ relief associations. DePasquale’s office in November announced $55.1 million for those associations, with $1.4 million going to Lehigh County organizations and $1.3 million going to Northampton County organizations.
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