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Area local governments and their taxpayers will pay hundreds of thousands of dollars next year to help offset double-digit investment losses in the Wisconsin Retirement System.
The state, cities, counties and school districts face what the system secretary called “modest increases” in contribution rates next year to keep the state’s public pension fund solvent, putting an additional strain on municipalities already struggling to withstand cuts in state aid.
Wisconsin’s fund, like pension plans nationwide, took a dive in the past year that forces employers to make cash infusions to pay future retirement stipends, city of La Crosse Finance Director Wayne Delagrave said.
Based on 2009 wages, the rate increases will cost city of La Crosse taxpayers $220,000. But because City Hall still is in union contract negotiations, that number likely will be even higher.
“It’s certainly going to add to our headaches,” Delagrave said.
The Department of Employee Trust Funds Board in June approved a 0.6 percent increase in the employer contribution for general employees and teachers, for a total contribution equal to 11 percent of their wages.
Other increases include 0.4 percent for elected officials and judges, for a total contribution equal to 11.9 percent of wages; 1 percent for police and fire covered by Social Security, for a total 14.1 percent contribution; and 1.4 percent for police and fire not covered by Social Security, for a total contribution equal to 15.2 percent of wages.
The market turmoil in 2008 led to a steep $22.6 billion drop in assets for the state’s $61.8 billion trust fund, forcing the board to raise contribution levels to the highest rate in more than a decade.
La Crosse County Finance Director Gary Ingvalson said Wednesday it will cost the county an additional $298,000 in 2010 — roughly 40 percent of the total amount the county can levy next year and still comply with the state’s 3 percent cap.
“It will challenge us in our ability to deal with state budget cuts and other wage and benefit increases,” County Administrator Steve O’Malley said. “This is going to make our job more difficult.”
Fred Buehler, Onalaska’s financial services director, predicted the city will be out an additional $35,000 in 2010.
In the La Crosse School District, where retirement contributions are part of a total compensation package, Superintendent Jerry Kember stressed the required increase won’t affect taxpayers.
“Not one nickel of that comes out of the tax dollars,” Kember said. “When the cost of benefits go up, it just reduces for any employee the amount they’re going to get in salary.”
The district also reduced its staff by 10 employees this year to manage overall budget concerns.
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