Cities Feel Burden of State Pension Shortfalls

ST. PAUL, Minn. (AP) - Cities and counties across Minnesota are feeling budgets squeezed as they try to make up for shortfalls in the state pension fund.

Reports say that many cities have had to cut staff, reduce services, or even raise property taxes to cover the costs.

While many municipalities can find ways to reduce costs of employee health care or other benefits, pension costs are out of their control. The contribution rate is set by the Legislature, and local governments must pay.

About a decade ago, the city of St. Paul paid an average of about $5,000 toward a police officer's pension. Last year, the tab was nearly $11,000.

Local governments don't welcome the hikes, but realize the increases are necessary to ensure the public pensions are sustainable.