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All Of You Owe The County $2,500 More

By Greg L | 15 July 2012 | Prince William County | 12 Comments

Exploding unfunded pension liabilities for Prince William county government and professional employees of the school division now amount to $2,500 for every man, woman and child in the county, according to new data from Sheriff of Nottingham.  That’s with a school board and Board of Supervisors that’s supposedly comprised of Republicans, who love to wax poetic about fiscal responsibility ever four years when they’re up for re-election.  Now they’ve hurtled us all towards bankruptcy.

The Schools are the worst culprits, which is hardly surprising given how out of control they’ve been over the past few years, allowing unfunded pension obligations to explode since 2007 as this chart shows:

PWCS Unfunded Pension Liabilities By Year
FY 2007 $366,861,735
FY 2008 $372,494,560
FY 2009 $467,796,082
FY 2010: $697,342,992
FY 2011: $773,130,650

Of course the County Employee numbers aren’t much more reassuring.

PWC Government Unfunded Liabilities By Year
FY 2006 $72,860,000
FY 2007 $76,860,000
FY 2008 $80,104,000
FY 2009 $116,844.000
FY 2010 $200,810,000
FY 2011 $225,355,000

I’d like to know what the plan is for resolving this liability before Prince William County declares bankruptcy as have so many other localities in the past year.  Nearly a billion dollars of debt for a locality that is budgeted to collect $790 million in tax revenues in fiscal 2013?  That’s utterly unsustainable, and given that these obligations are exploding at more than 10% per year, far faster than we’re ever going to raise taxes in the county, we’re looking at insolvency here in the very near future.  There’s no way to meet these obligations with our current fiscal structure in the county.  No way at all.

We’re utterly screwed, folks.  Taxes are going to explode so we can pay public employees retirement benefits that most of the rest of us will never have, and the kicker is that the ones who set up this disaster are the same ones who claim they’re fiscal conservatives.  I can only imagine what the alternative would have been.

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  1. Anonymous said on 15 Jul 2012 at 9:06 pm:
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    If you add up all unfunded liabilities that all the states, citys counties and the federal goverment have with the national debt, we are worse off than greece.

  2. KimS said on 15 Jul 2012 at 10:15 pm:
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    Sorry to say this, but anyone who is surprised by this hasn’t been paying attention. The increase in the unfunded pension liability was deliberate. It started when the economy crashed and will continue until next year. Why do you think the VRS contribution rate increased 50% in one year?

  3. Loudoun Insider said on 15 Jul 2012 at 10:53 pm:
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    Have you all figured out by now that things really don’t change all that much no matter what party’s politicians are in office??? Dems love to spend us into oblivion. The vast majority of Republicans talk a big game about limiting spending but then lose their nerve once they get into office.

  4. Loan Arranger said on 16 Jul 2012 at 8:19 am:
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    Perhaps its time to see what Governor Walker did in Wisconsin. Years of Union blackmail for votes nd poor fiscal management by scared legislatures might just be coming home to roost in Virginia.

    We need strong leadership to “Fix” this problem. I’m guessing Cuccinelli could sort this out from the Governor’s Mansion. I hope he weighs in on this issue

  5. KimS said on 16 Jul 2012 at 8:39 am:
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    Sorry to interrupt, again, but this was known and expected. Those of you who followed the budget debates in PWCS should remember this. Do you recall why PWCS was out of cash and couldn’t afford raises for teachers without cutting services?

    It was because the VRS contribution rate had doubled in one year resulting in an increased pension benefit cost of $28 million. Why did that rate double? To start paying back the unfunded pension liability that had been allowed to increase over the past few years.

    See, in 2008 the housing market crashed and local taxes declined. That meant less money for schools, and many schools faced having to layoff teachers. The state decided that massive teacher layoffs wouldn’t look good, so they allowed local governments to defer increasing the VRS contribution rate (the % of salary that is provided to VRS each year for pension benefits - a rate that is set by the state, not PWCS). Obviously, when you don’t pay as much as you should into your pension fund your unfunded liability increases. That increase was fully expected and known.

    It also meant that local governments would have to pay that deliberate underfunding back at some time in the future. That time is now, and is why the VRS contribution rate increased 50%.

    So, not only was the increase in unfunded pension liability known and expected, it’s already being paid back.

  6. Fed Up Conservative said on 16 Jul 2012 at 4:34 pm:
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    “Taxes are going to explode so we can pay public employees retirement benefits that most of the rest of us will never have”

    That shade of jealously doesn’t become you Greg. Yes. I’m a former county employee and I have a pension. I worked for over 31 years for the county making a decent salary but I’ll never be rich. I’m thankful for my pension but I certainly couldn’t retire for good. I’m on my 2nd career now. When I went into govt employment I had friends and relatives who did other jobs. Some did ok for themselves while some have done very well and make salaries I could never hope for as a county employee. I had one relative complain about my pension while he never got one working for a very large telecomm co. He complains while he lives in his million dollar home and drives his Infinity and has a lifestyle I could never have.
    Again, I’m thankful for what I have but will never apologize for it.

  7. Anonymous said on 16 Jul 2012 at 7:31 pm:
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    Wasnt that the way Gov McDonnel balanced the virginia budget with good ole republican fiscal prudence or did he just not pay the pension fund for a year or two then claim a surplus? We have got to call truth to power no matter which party is in. Period.

  8. BristowBristling said on 16 Jul 2012 at 9:15 pm:
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    Thank you Fed Up Conservative. I too am a retired PWC government employee after having served almost 30 years. Like you, I am living comfortably while working a part-time job to supplement my retirement. I resent those who try to make me feel like I have done something wrong by choosing to devote my life to local government work and then leaving with a decent retirement income.

    In the 1970’s I looked at many job opportunities. Several with benefits that far outweighed those of PWC. I chose PWC because it is my community and where I wanted to serve.

    PWC offered me, as a recruitment tool, VRS (paid by the County), free single healthcare, pay for performance annually, COLA’s, and other incentives.

    Over the years those benefits slowly dwindled. I paid for my share of healthcare which continued to rise in cost, pay for performance was toyed with, changed, and now is not offered annually, COLA’s are also no longer provided annually, the 401a was taken away, the VRS multiplier opportunity to rise to a rate of 1.81, which many jurisdictions chose to go to, was not given to PWC employees.

    Now new employees have to contribute more and receive less with less pay to do so.

    No, I will not feel bad about my retirement pension. I worked hard and honored my commitment to PWC. If citizens want to pay less and not support what little the county employee is given in return for their service, perhaps citizens here need to
    re-evaluate the importance of those services that are being offered to them.

    Because politicians choose to dip their fingers into the VRS pot and play with those monies, don’t blame me. I also objected to their making a sound retirement program into a fiscal nightmare.

  9. Greg L said on 16 Jul 2012 at 10:53 pm:
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    I’m hardly going to shed a lot of tears for the plight of public employees. I know many have foregone raises in the past few years, but compared to the private sector their standard of living is rising far faster than the private sector, where incomes have actually fallen considerably. Those of us who don’t have pensions, which in the private sector is pretty much all of us, aren’t too happy about the idea we’re saddled with this enormous debt we’re going to pay off so public employees can get benefits we’re not getting. My taxes will likely be raised for this? I’m not happy about that at all.

    It’s worth noting that none of us begrudge public employees for taking jobs that offered these benefits, nor do we think the promises made to you should be broken. It’s just worth revisiting the idea that benefits packages that include pensions and lifetime health benefits might be worth revisiting for new employees. The folks footing the bills for this can’t afford such luxuries, especially when the median income for private sector employees in the county is lower than the median public sector income.

    I’m left wondering just how these benefit packages were decided. I know there isn’t collective bargaining for public sector unions in Virginia, but after pensions in the private sector evaporated, why did folks decide that pensions for public sector employees were sacrosanct and everlasting? They aren’t a privileged class and shouldn’t be treated that way.

  10. BristowBristling said on 17 Jul 2012 at 5:53 am:
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    Greg, I completely agree with you regarding taxes being raised to pay debts incurred due to government spending. Where I disagree is placing this on the shoulders of the employees. There are so many areas of fraudulent and frivolous government spending that need to be investigated and cut to better balance the budget without raising taxes.

    “I’m left wondering just how these benefit packages were decided.”
    We live in the Northern Virginia / DC metropolitan area. Although there is no collective bargaining in Va., there is strong competition between jurisdictions for high quality, competent employees. Benefit packages become a recruitment tool to bring and KEEP those types of employees here vs them going to our neighboring counties (for instance Fairfax). This is true particularly for public safety employees. The costs incurred in hiring and training them (the Academy and so forth) is tremendous. By not dangling the carrot of benefits to them, losing them to other jurisdictions who do actually costs the tax payer more in the long run, both financially and through experience.

    I’ll clear up the healthcare issue. After retiring, I pay my premium. The County does not pay it.

  11. Fed Up Conservative said on 18 Jul 2012 at 3:01 am:
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    Greg: “that include pensions and lifetime health benefits”

    You do realize that we pay for these lifetime health benefits don’t you? I was allowed to keep my county health insurance as long as I was willing to pay the full price. I tried working part time for a while but that barely paid for this health care.

  12. Padre said on 18 Jul 2012 at 6:48 am:
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    County health care stops as soon as you are medicare eligible also, even if paying the full price out of your very own pocket.

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