Blair County leaders held their fourth public budget workshop Thursday for some fine tuning. The budget will be introduced next week on November 23rd.
The budget will tentatively be just under $50 mil for 2017. The money to fund it comes from federal and state resources that help pay for things like social services, children and youth, court services, etc.
There is also real estate tax, which is a major revenue source for Blair County. That will make up almost half of the $50 mil.
Commissioner Bruce Erb said no money will come from reassessment.
“The county raised in real estate taxes in 2016 approximately $22 million,” he said. “After reassessment, that amount remains with the new assessed values at $22 million; however, state law allows the county, as well as the municipalities to have a maximum tax increase of 10% above that revenue amount during the year of reassessment.”
That 10% tax increase is important; it’s going to help fund county pensions.
“A little over $2 million would be raised from that tax increase,” Erb said. “The first million dollars is going to go to increase our contribution to our significantly underfunded pension plan. Blair County has the poorest funded pension plan of any county in Pennsylvania. Our contribution as figured by the actuary should be somewhere around $6 million to $7 million next year. By putting this additional million in, it just takes us to $4 million. So we’re still below where we need to be.”
Meanwhile, health insurance costs are going up. The county finance department projects to spend about $500,000 on that alone.
“It is the most significant financial problem that Blair County faces, and the can’s been kicked down the road,” Erb said. “We have to face it now.”
Erb said the county is at a point currently where the money coming out of the pension plan exceeds the $2 million they are trying to put in by approximately $4 million or more. He said for the past at least 12 years, there was not much contribution to the pension fund.
“They should have been contributing approximately $35.8 million and only $800,000 was contributed,” Erb said. “So we are very much behind.”
Erb said there is really no other way to fund the county pension plan.
“The only way would be is investment results,” he said, “which would have to be astronomically better than any benchmark, and, really, we would still not be able to do that.”
Erb said if this tax increase does not happen now, the fund will run out of money. At that time, the funding would have to come from direct tax revenues, which means as much as $7 million or $8 million each year would have to be generated in order to pay out the retirees.
“We owe a legal and moral obligation to our retired employees who were promised this,” Erb said.
