web1_web1_LCCC-Logo.jpg

LCCC: Police have located person with gun on campus Tuesday

web1_trey_brown.jpg

Trey Brown leaving as Wilkes football head coach

<p>It&#8217;s not an easy thing to swallow. Luzerne County is expecting an impressive $11.6 million windfall through one-time receipts. A property tax increase is under consideration. Yet the advice residents are hearing: Don&#8217;t use any of the $11.6 million to avoid the tax hike.</p><p>Yet the advice is sound, and should be followed. This is a case of avoiding short-term gratification for long-term gains that far outweigh the immediate benefit.</p><p>Both County Manager C. David Pedri and Harrisburg-based Public Financial Management, a consultant in county finances, urged the bulk of the money &#8212; $8.6 million &#8212; b<a href="https://www.timesleader.com/news/local/682381/county-council-advised-to-use-most-of-11-6m-windfall-for-pension-payments" target="_blank">e put into the county pension fund</a>, and the rest be set aside in a reserve.</p><p>The argument may not be easy to take when you see your tax bill rise, but here it is: Since this is a one-time shot of cash, putting it in the general fund means a one-time solution to a recurring structural deficit. We&#8217;ve seen a lot of that, particularly at the state level in recent years, and it is always a failed policy.</p><p>It&#8217;s simple: Recurring money shortfalls inevitably need to be fixed by raising taxes or reducing spending. Papering over a shortfall with gimmicks or one-off options kicks the proverbial can down the road, allowing the underlying problem to fester and re-emerge, uglier than the last time.</p><p>Using the money to make a timely payment on pension debt is actually the opposite. It prevents putting off a nagging problem that can and does grow.</p><p>Public pensions have become the black hole of many government budgets. They create chronic red ink as politicians gamble by avoiding payments needed <em>now</em> to meet future obligations. The longer those payments are delayed, the deeper the red ink.</p><p>Because pension payments may not come due for years or even decades, the danger of the problem may not become glaring until it is simply too late to fix, while a little action early and often could have prevented the problem to begin with.</p><p>As Jennifer Learn-Andes noted in Wednesday&#8217;s story, paying into the pension fund has an important added bonus. The pension fund is invested, and money made from that investment goes back into the fund.</p><p>Right now, the county pension fund is making a healthy 8 percent return. At that rate, $8.2 million would reap $689,553 in one year. That&#8217;s a pretty hefty dent in the ongoing strain of fulfilling pension obligations.</p><p>It is glib to counter that the pension problem is a &#8220;greedy union&#8221; problem, and thus does not merit this payment into the pension fund.</p><p>First, it doesn&#8217;t matter how we got here, the pension obligation is real. The choice is basic: pay it or default, and the latter would certainly lead to legal battles and dangerous credit downgrades. The cost would almost surely be too high to bear.</p><p>Second, it takes two sides to negotiate a union pension, and in some cases, the decision is made by a third party like the state Legislature setting teacher pension rates.</p><p>Blame can be spread around; the solution remains the same: Pay the bill.</p><style>
.neFileBlock {
	margin-bottom: 20px;
}
.neFileBlock p {
	margin: 0px 0px 0px 0px;
}
.neFileBlock .neFile {
	border-bottom: 1px dotted #aaa;
	padding-bottom: 5px;
	padding-top: 10px;
}
.neFileBlock .neCaption {
	font-size: 85%;
}
</style>
<div class='neFileBlock'>
<div class="neFile"><img class="neImage" src="https://www.timesleader.com/wp-content/uploads/2017/11/web1_luzerne-county-courthouse-3.jpg">
<div class="neCaption"></div></div><div class="metaInfo"><photo0>https://www.timesleader.com/wp-content/uploads/2017/11/web1_luzerne-county-courthouse-3.jpg</photo0><caption0></caption0><photoCredit0></photoCredit0></div></div>

Our View: Using county windfall to pay pension is the smart move