Wicomico County's Budget dilemma is soon to be exacerbated as the State of Maryland attempts to shift a significant portion of the Schoolteachers Pension liability onto the Counties.Most taxpayers are not aware of the enormity of this problem. The system's fiscal health has gradually deteriorated over the past decade. In fiscal 2000, the system's actuarial liabilities consistently grew faster on an annual basis than its actuarial value of assets, resulting in its unfunded liabilities increasing each year to the present. As a result, the system's actuarial funded status reached 100% in fiscal 2000 - and that is the good news. However, since then - the fund has dropped to 64.1% as of June 2010. This has prompted the growth rate for State pension contributions to far outpace its revenues. From fiscal 2002 to 2011, the annual State cost of teacher pensions grew 159%, while general fund revenues grew just 39%. Current projections predict that the annual State general fund expenditures on pensions for both State employees and teachers will grow at twice the annual rate of general fund revenues between fiscal 2012 and 2015. While general fund revenues are expected to grow 4.9% annually during that time, pension costs are projected to grow 9.9% annually. This trend makes the current structure of State pension benefits unsustainable.
The State has tried to prop-up the sinking fund by diverting a portion of the ARRA stimulus money - (which ought not have been allowed - emphasis added by author). But the ARRA stimulus money is set to expire by the end of 2012.
Overview of the State Retirement and Pension System
Total State expenditures for employee and teacher pensions is projected to be 1.54 billion in fiscal 2012, of which $975.6 million is projected to be for teachers, community college faculty, and librarians employed by local governments. Of the total figure, about 84% is projected to be paid from State general funds, with the remainder evenly dived between special and federal funds. As recently as fiscal 2006, the State contribution was approximately 652.4 million, less than half the current payment. As I said - it is a Time Bomb - and it is soon set to go off.
The taxpayers of Wicomico have been warned - not only by SBYnews analyst and professional banking analyst like Meredith Witney - but also by the major bonding underwriters like Fitch.
New Posts to fall below.
6 comments:
Joe,
As a county employee, this article makes me want to cuss up a storm. Why on earth, are we as county employees going to be responsible for state employees pension and benefits. These people make much more money than we do. They probable have cola and pay raises. We haven't in many years. They probably don't have to worry about furlough days. We still do. Oh! Of course, they have the union burning a hole in our budget. We have absolutely no representation and some of us get treated like sugar honey ice tea. And, too top it off, we work all season long. They probable don't especially teachers. This is a crock pot of dodo. Pollitt ain't dodo. He's cronies ain't dodo. The good 'ole boys ain't dodo. All administrator involved who allowed this dodo to hapeen ain't sugar honey ice tea. Your income shold be used to clean up this mess in wicomico. You all are crocks. Nothing but a bunch of corrupted crocks. I hope all of you will fly out of this county and hit a mountain or just fry in hell. Corrupted Cash Cow Crocks.
Just imagine how us non public sector taxpayers feel-those of us who try and scrape out a living owning a small business who don't have any pension unless we personally save for it, who pay 100% of our Health Care Insurance and who never get a paid Holiday ,COLA or any other perk of the Public sector. Take the outrage you feel as a county employee and multiply by a thousand for the private sector worker (of the 50% of us who actually pay tax in this country.)
To 2:43 Posting
You are absolutely right. Not only are Wicomico taxpayers going to be burdened with the added schoolteacher pension luggage, but all US taxpayers are burdened by the added debt caused by the ARRA stimulus diversion to Maryland's pension fund. Not to mention the State income taxes that were paid by the Maryland citizens.
Thus, the taxpayers are not bailing out the schoolteachers pension fund, once, not twice, but three times.
This type of crap and ponzi scheme must stop and NOW! Where hasn't the US Attorney's office intervened into this Ponzi scheme.
Response to 3:24
DITTO! That is exactly what has happened.
I knew sooner or latter the 'spit would hit the fan'. I knew it - and I could see it coming almost as if I were brokedown and on railroad track and just waiting for the next scheduled train.
GREAT REPORTING!
Norman Conway and Rudy Caine need to either be recalled and or terminated. They have done an aweful lot of damage to our economy. These guys are not the peoples representatives, but rather, our enemies.
Really scary scenario. 2015 is not that far out. I can only assume that all . . ell is going to fall out come next legislative session. I hope the people are prepared for the unraveling of our economy.
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