Pension cost and liabilities are a big issue for many local and state governments. Some states are on better footing than others. The public does not realize a small and innocent looking local/state agency are big budget eaters of tax revenue. In 2012, strict accounting rules went into place for ALL local and state governments to show pension liabilities and how they are accurately captured for budget presentations.
Budget information out of Hartford County Maryland shows this trend. The Hartford County Liquor Control Board released their budget audit. This agency controls alcohol licensing permits. The most recent operating budget was $455,000 with a pension liability in the future of $109,134. Future pension obligations represent almost 25% of this agencies annual operating budget.
Here’s more from the source, Patch.com:
One element that was new under the governmental reporting was money set aside for pensions, since the liquor board is part of the state retirement system.
Overall, the board had $636,556 in cash as of April 30, which is a decrease of $121,000 or 16 percent from the year prior, she said.
The board had $751,884 in cash going out, and she said cash flow reporting showed where some went.
“There was definitely a drop in the cash for the year,” Dojan said, explaining it was a 16 percent decrease from the previous year.
The net pension liability was $109,134, which Dojan said was not a cost that was going to be paid in the immediate future; it’s long-term.
“This may not have been reported previously,” she said, and the value is actuarily determined by the state. The pension is a “huge liability” those in the state of Maryland are on the hook to support, she added.