$13.5M needed for county pension fund: Taxpayer subsidy for 2010 will be largest amount ever required to keep fund afloat.

The taxpayer subsidy required to keep Luzerne County's pension fund afloat will reach another all-time high -- an estimated $13.5 million in 2010, county officials said Tuesday.

The fund required an unprecedented $11 million infusion of tax dollars this year, forcing county officials to resort to a bond to cover that debt. The county has not yet paid the 2009 pension subsidy because officials haven't been able to get insurance on the bond.

The subsidy is needed because the fund isn't bringing in enough revenue from investment earnings and employee contributions to cover escalating obligations to present and future retirees.

The fund's actuary, the Hay Group, warned county officials in 2006 that the gap was around $34.1 million. The gap had widened to $119 million last year.

Taxpayers have been subsidizing the pension fund since 2002. As of Tuesday, the fund was worth $167.69 million.

Commissioners must keep the fund solvent because employees are guaranteed their pensions.

Roughly $8.47 million -- or 77 percent -- of this year's $11 million must be covered by the general fund operating budget, while the rest is paid by outside state and federally funded agencies, including human service branches.

It was unclear Tuesday how much of the $13.5 million would come out of the general fund.

County minority Commissioner Stephen A. Urban requested that calculation from the budget/finance office on Tuesday afternoon.

The increase in pension subsidy is particularly painful because the county faces a $29 million shortfall next year.

Public Financial Management, the county's financial recovery consultant, has proposed extreme measures ranging from the elimination of 150 workers to a 29 percent property-tax hike to fill the void.

As it stands, the county has projected about $111.05 million in revenue for next year, compared to $141.05 million in anticipated expenses, according to an initial budget draft released earlier this month.

While the $13.5 million supplied by Hay Group is still an estimate for budgetary purposes, it's not expected to significantly change. Hay Group based the estimate on the value of the fund as of Oct. 1, according to a letter the company sent to county officials.