Pittsburgh Inches Closer to Pension Funding Crisis Resolution

December 30, 2010 (PLANSPONSOR.com) – Pittsburgh City Council members said a pension bailout package they pushed through Wednesday will avert a state takeover of the pension fund,

A Pittsburgh Post-Gazette report said that in a 7-2 vote, council dedicated to the pension fund about $414.7 million in parking tax revenue over the next 31 years.

On Tuesday, it proposed dedicating 30 years’ worth of parking rate increases to the fund. When Mayor Luke Ravenstahl criticized that plan, council on Wednesday morning proposed dedicating 30 years of local services tax instead.

Ravenstahl vetoed the bill Wednesday evening, and council plans to meet today to override the veto and meet the December 31 deadline for averting state takeover, according to the newspaper.

In all, the 37.5% parking tax will generate about $47 million for the city next year. Council’s bailout would take about $14 million of the tax revenue annually for 31 years. Council reopened and amended the 2011 budget to reallocate the money to the pension fund, the newspaper said.

The pension fund, now 29.3% funded, must be at least 50% percent funded by December 31 to avoid a takeover. Unfunded liabilities now total about $700 million.