IN AN UNFORTUNATE FIT of generosity more than 50 years ago, Congress decided to establish some impressive but fiscally unsound pension programs for certain categories of District of Columbia employees who weren't covered by federal retirement programs. These included police officers, fire-fighters, public school teachers and judges. In those days when Congress really ran things around here, you can imagine how lobbyists for these employee groups soon developed chummy relationships with members of key committees handling pensions. And the benefits grew and grew. What's harder to imagine, however, is that all these pension liabilities were never truly financed: there was no fund to take care of the costs.
Thus when the elected city government took office in 1975, it inherited unfunded pension liabilities totaling $1.7 billion. And the figure, according to Mayor Washington, has now hit a "staggering" $2 billion. But if that seems a hefty tab, there's more: City officials estimate that to assume this unfunded liability and to meet currently accruing and future liability over the next 40 years, the total - if financing were to begin right away - would be $9 billion for police and firefighter pensions alone.
At least there does seem to be some congressional recognition that the federal government has a financial responsibility to help the city undo this mess. A House District subcommittee is considering legislation that would make changes in the pension programs. Moreover, the city government has submitted proposals for a sharing of the pension burden.
Mayor Washington and city budget director Comer S. Coppie are suggesting that past liabilities be picked up by the federal government and that the city finance current and future liabilities. Over a period of 40 years, according to theiractuarial estimates, the annual federal cost would be about $101.2 million; the city's cost would range from $41.6 million in the first year to $270 million in the year 2016. Thus the federal share of the $9 billion would come to about $4 billion, the city's to about $5 billion. At the end of this period, the city would assume complete responsiblility for the pensions.
This kind of arrangement -coupled with changes in certain pension provisions in the future and the establishment of a retirement board adequately reflecting the interests of employees and the city government - need prompt congressional consideration. While there may be some question about the precise cost calculations over a 40-year period, there should be no doubt that the fiscally treacherous pension programs the city inherited from Congress need federal attention as quickly as possible.