Posted 12/10/2012 12:00 am
Updated 6 months ago
The Arkansas Legislature will have plenty on its plate starting in January. Whether to extend Medicaid to the 250,000 Arkansans who don’t have health insurance is just one ample serving.
But lawmakers should add to their agenda a potential solution to the question of the projected insolvency of a number of Arkansas police and firefighter pension plans.
An article last week in the statewide daily reminded us of the comprehensive story Arkansas Business published on Sept. 17 by Senior Editor Mark Friedman. His piece detailed the looming danger facing the pension funds and the potential that Arkansas taxpayers could be on the hook for the unfunded liabilities, which, at the end of 2011, stood at $311.89 million for the 144 police and fire pension funds that are locally administered.
Now, three more firefighter pension plans face insolvency in the next decade, in addition to the seven troubled plans about which Friedman wrote.
Opinions on what would happen if the funds become insolvent differ. But one scenario is that the employers — in this case the cities — could be responsible for the pension payments. Another is that retired police and firefighters will simply lose their benefits. Neither is an attractive possibility.
The Arkansas Municipal League has put forth several suggestions to the retirement boards and to legislators. They include placing on the ballot a constitutional amendment that would allow local governments — with voter approval — to raise millage rates for the pensions.
The Legislature, now controlled by Republicans, has a chance to get ahead of this financial crisis. It would be highly gratifying — and memorable — if it chose to fully embrace the nascent bipartisanship expressed by some members and address this threat to the pensions of police and firefighters, who surely deserve the consideration, as do the state’s taxpayers.