Unresolved Pension Issues in Lexington
The budget strain caused by the unfunded liability of Lexington’s police and fire pension program remains a problem without an easy fix. Outgoing Urban County Council member Doug Martin offered a pension presentation complete with many figures at Tuesday’s work session. ‘I think this is the most serious problem facing city government right now,” said Martin.
Martin’s power point program noted the city’s financial challenge for paying police and fire pensions along with medical benefits comes to 585 million dollars. The city has been borrowing millions annually to meet that obligation. The unfunded liability is the amount of money needed to make pension payouts over time. Martin says some cities have opted to freeze cost of living adjustments. He says reductions in benefits for new police and firefighters may be part of the answer. Council member Peggy Henson says this is a nagging issue which deserves a firm solution.
“We have to have some kind of closure to this on how we move forward,” added Henson.
Any substantial change in pension policy must be authorized by the state legislature. Lexington officials have taken such a request to lawmakers previously. But Lexington Mayor Jim Gray is trying to be optimistic about concrete action in 2013.
“I know better than to predict any outcome..of any legislative group, however…you’ve got to have confidence and you’ve got to have conviction that people will do the right thing..that we will come together and solve a problem,” said Gray.
The council took no action on the pension matter during Tuesday’s work session.