Ohio again examines funding police pensions
'Those men and women who have worked their whole lives to protect our communities, we should be protecting their pension and making sure that their pension is solid when they go to retire,' Rep. Thomas Hall (R-Madison Township) said.
'It's very easy to say that this will be the largest unfunded mandate placed on local governments that the legislature has proposed, and we hope that they rethink this,' Ohio Municipal League Executive Director Kent Scarrett said.
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House Bill 280 is very similar to a bill introduced in the last general assembly. Under the bill, the amount of money a local government contributes to the fund would, within five years, increase from 19.5% to 24% for police officers. Firefighters are already at 24%.
'At a time when there are workforce shortages in the fire industry and in the police industry, this is a step that we feel like we could help people go to choose to come a police officer or a fire fighter,' Hall said. 'Knowing that they have stability, knowing that they have a stable pension system in place for when they go to retire one day.'
While Hall said this is an important step, increasing that contribution amount does not come cheap.
'You often hear municipalities, they say, 'Well, we don't have the money for this, this is going to be a substantial strain on the local governments,'' Hall said. 'I think that they do have the money for that. I think that if first responders are truly a priority, they will have the funds necessary to approve this.'
If enacted, the bill would cost local governments nearly $82 million statewide. Scarrett said that eventually, it is going to mean bad news for Ohioans.
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'It ultimately lands on the taxpayer,' he said. 'Weathering these increases on the existing constrained budgets would really force communities to look at reducing services, cutting services, possibly going to the voters and asking for a higher contribution in their tax rate.'
Scarrett said local governments are 'already operating under tight budgets.' He said not only might this bill mean higher taxes or a reduction in services, but he also said that for some local governments, it could mean disbanding their police department altogether.
'Especially our smaller communities, villages that are really on a shoestring, they may not be able to support their police departments going forward with this unfunded mandate,' he said.
Hall said, though, there is an extra layer to the bill that is important this time around. He noted new actuarial work, done by a third party, to explain why and how the increase should be made.
'I think that the goal with the third party was to say, 'Hey, it's not just the police and fire saying we want more money, or we need more money with our pensions,'' Hall said. 'We've been saying all along we need this, now we need the third party, who has run the numbers, who has tried to explain it on their side of things, the non-bias side of things.'
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'There's no other pension fund that allows a board action to automatically increase the employer contribution because of a report that is initiated by the board,' Scarrett said. 'More egregious is there is no municipal representative on the [Ohio Police and Fire Fund] board.'
What are the odds this bill passes? Last general assembly, it came close, but ultimately failed in the 11th hour. This year, Ohio House Speaker Matt Huffman (R-Lima) said it may not even make it to the Ohio Senate. He said, in general, he is opposed to the idea that the legislature should be working on a bill like this at all.
'I don't think legislatures, by and large, that meet every two years, determine budgets and do other things, should be and are really very capable of making 30-year decisions in a piece of legislation,' Huffman said.
Huffman said that at the very least, the issue will likely not be determined before June 30, which is when lawmakers break for the summer.
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