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Pension fund costs haunt Easton’s 2015 budget plans

By Joe McDonald, WFMZ.com Reporter, news@wfmz.com
Published On: Apr 23 2014 09:22:45 PM CDT
Sal Panto Jr., Mayor of Easton
EASTON, Pa. -

Facing a projected $1.5 million funding gap in its tentative 2015 budget, Easton may be forced to close fire stations and swimming pools, Mayor Sal Panto Jr. warned City Council Wednesday.

“These are the tough decisions that are needed to be made,” Panto said.  Unlike previous years when the city found new revenue sources like the passage of an earned income tax, Panto said he “didn’t see the gap being closed by revenue (increases) this time.”

About 80 percent of the deficit is driven by pension fund obligations to city firefighters and police officers, Panto said, in presenting his  $33 million preliminary budget for 2015.

Panto said pension costs have increased 270 percent over the last 5 years, a trend he said is “not sustainable.”

Panto said Easton is not alone in skyrocketing pension fund costs.

He predicted that unless the state legislature passes pension reform, then the state will “have Detroits through all of Pennsylvania.”

 In 2013, Detroit filed for bankruptcy, the largest municipal bankruptcy in U.S. history with debts of about $20 billion.

Councilman Jeffrey Warren said Harrisburg’s inaction on the problem was “absolutely shameful.”

“They need to step up to the plate,” Warren said.

Panto has until October to find a way to fill the shortfall.

Besides the preliminary budget, Panto said bids for the new City Hall “came pretty much on budget” at $13.2 million.

“It’s not a Taj Mahal we’re building by any stretch of the imagination,” Panto said.

He said the building should be ready for move in by September 2015.

The new building will be energy efficient and designed to be as “paperless as possible.”

Panto said work on the parking deck was delayed. “The weather killed us on this project,” the mayor said.

The low bidders for the City Hall project were: C.C. Construction Services, $10.1 million, general construction; H.T. Lyons, $1.6 million, HVAC; MBR, $624,000, plumbing; West Side Electric, $877.270, electrical.