Municipal pensions in Pennsylvania facing combined $7.7 billion debt

The Morning Call reports:

Carrying more than $7.7 billion in total debt, municipal pensions could lead to bankruptcies of cities, boroughs and townships across Pennsylvania, state officials warned.

A rising stock market alone can't fix the debt, because many of the debt-laden municipal plans also have more retirees receiving benefits than active workers paying into the systems, state Auditor General Eugene DePasquale said Wednesday.

The debt, coupled with smaller workforces, means Pennsylvania, starting with Scranton, could see a wave of Detroit-like bankruptcy cases in which guaranteed pensions are reduced. That's if the Legislature and Gov.-elect Tom Wolf don't work together to fix the municipal pension crisis, DePasquale said.

"The problem is too big to ignore," the Democratic auditor general said at a Capitol news conference. "We saw what happened in Detroit: Retirees got 10 cents on the dollar. Basically, they got screwed."

Even a raising stock market can't help... the math behind this kinky accounting.