South Carolina is billions of dollars in debt. Now lawmakers must find a way to fix the state's growing pension deficit.
When state legislators get back into session in less than two weeks, South Carolina Treasurer Curtis Loftis believes it's time to talk about a new tax that would impact more than just state workers, to pay the debt.
State employees like firefighters, police officers and teachers pay into the state pension system, expecting a return once they retire.
Earlier this month, it was announced they will have to pay more of their paychecks for the sixth year in a row — nearly 10 percent — for retirement benefits starting next year.
Firefighters say it's a tough pill to swallow when starting salaries are low. Some say trust in the system is broken, and are skeptical of a fix. And they wonder if the State will keep its pension promise to them in the end.
Loftis says the State will keep its promise, but at a cost. And raising employee contributions isn't the answer.
"Retirees and people who are invested in the system will always get their benefits," Loftis says. "The problem is, it's just going to cost so much. It's like going to McDonalds and paying $25 for a hamburger. You don't want to do that. Our state employees already pay 50 percent more than the national average, and they're going to have to pay more. So what we're trying to do is keep the interest cost and other costs in the pension system down, so we can afford it."
Loftis says raising employee contributions does nothing to fix the problem. He says a new tax could be the answer. Lofits continues to sound the alarm to lawmakers on his view that pensions should be the single most important topic when session kicks off in a couple of weeks.