Arguments Over Pension Could Mean Lexington Layoffs

By: Dave Spencer Email
By: Dave Spencer Email

Police and Firefighters say it's owed $246 million for the pension plan, the city argues but says now is not the time to take a big chunk all at once. And the issue is being heard by the Kentucky Supreme Court.

Over half of Lexington's general fund goes to police and fire, but the pension plan for firefighters and police is underfunded by nearly 250 million dollars. A problem Mayor Jim Newberry says has been plaguing the city for 30 years.

Mayor Newberry says there has only been one time when the pension was funded at the proper rate. Now with police and fire unions loosing thousands in a struggling financial market, it's looking for the city to start paying what it's owed.

Currently Lexington pays 18% of the total payroll to the pension plan, now the unions are asking for an additional 20 million dollars annually for the next 23 years, that's how long it would take to recoup the money.

The Mayor offered a different solution, $70 million to be sold in bonds then paid off by the city over the next 20 years. The Mayor says they wanted to take that money in addition to the $20 million annually. That's something the city can't afford, said Newberry.

The Pension Board has the power to name the price they want the city to pay, and according to a former board member they have no plans on changing the 20 million dollar figure.

Newberry says if that is the case, he'll be forced to cut positions in fire, police and other departments. The Mayor says with flat revenues and growing expenses and a budget that must be met, he'll have no choice but to make cuts.

Mike Sweeney of the Fraternal Order of Police says it's not fair to punish fire and police officers for the city's mistakes.

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Comments are posted from viewers like you and do not always reflect the views of this station.
  • by Anon Location: Ky on Dec 3, 2008 at 05:30 PM
    The Fireman and Police do what they can even with the non-appreciation of their jobs!! Their pension is as important to them as yours is!! If you don't like what they have, apply for the jobs they have!! Don't hate them because you are jealous of the lifes they have and a lieing Mayor that has no backbone and cries when he doesn't get his way!!!
  • by Dave Location: Garden Springs on Dec 2, 2008 at 04:42 PM
    What if we tax our illegal population? Every peso counts right?
  • by JR on Dec 2, 2008 at 04:22 PM
    There is not an single person that has not been affected by the downturn in the economy. The states and cities continue to suffer as the tax base falls and less money comes in. Now is not the time for the union to be playing hardball with the local goverment. To continue to do so will result in a loss of jobs in the areas to which the community can least afford them.
  • by KY Location: KY on Dec 2, 2008 at 12:30 PM
    Don't re-elect the people responsible if you don't like it. I suggest the city go ahead and lay'em off.
  • by sara Location: frankfort on Dec 2, 2008 at 05:34 AM
    They need to impose a tougher penalty for those caught driving without insurance and expired tags. That would generate alot of money.
  • by Freda Location: Lexington on Dec 2, 2008 at 03:39 AM
    The Police and Firemen have earned their pension we should make sure it is there for them. Good Job!
  • by regular joe Location: lexington on Dec 1, 2008 at 08:26 PM
    same old pre tax shake down, Scare the public with reduced law enforcement and if that does'nt stick, then go to plan b and announce cuts in education or meals for the disadvantaged kids. The sad part is , It works like a charm everytime.
  • by Fireman's Friend Location: Lexington, KY on Dec 1, 2008 at 07:48 PM
    Ask Newberry to tell the whole story, yes he came up with a plan to put $70 million (BOND)into the pension fund while REDUCING what the city was already paying so he could balance the current budget. July 1, 2008 Newberry reduced what the city was paying from 27% to the KRS mandated minimum 18%. The cities contribution rate had been increased over the years to get the fund going back in the right direction. Ask yourselves were you will be if he cuts already severely understaffed departments??? TI were are you??!!
  • by Liberation Demonology Location: Richmond on Dec 1, 2008 at 06:30 PM
    "Mayor Newberry says there has only been one time when the pension was funded at the proper rate." Okay, so when was the one time it was properly funded (if that's true)??? The pension board is missing a bit of perspective on this issue. If the account had been fully funded, it would have just meant that much more they would have lost in the stock market downturn.
  • by Anonymous on Dec 1, 2008 at 05:20 PM
    tisk tisk just breaks my heart,this is what happens when you live on a projection instead of a buget.
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