Regardless of the outcome of Tuesday's elections, Pennsylvania's cities face problems from rising pension liabilities to fewer dollars from Harrisburg, according to six mayors.

"Pensions are critical, and if we don't do something we're going to fall like dominoes on a board. City after city after city. In the next 10 years, it's going to be a tremendous crisis," Allentown Mayor Ed Pawlowski said at a mayoral summit at Harrisburg Area Community College.

Allentown in 2013 leased its water and sewer system to the quasi-public Lehigh Valley Authority, which sold $308 million of bonds to finance the transaction. Allentown received an upfront payment of $211 million and will get an annual payment of $500,000 beginning in 2016.

The unfunded liability of Pennsylvania's two major pension plans is around $50 billion. Including other post-employment benefit, or OPEB, obligations, and municipal and county packages, the tab is around $73 billion. Many localities statewide say they have had to raise property taxes to keep up with their own pension obligations.

The mayors at Monday's discussion, sponsored by the citizens group Harrisburg Hope, said state officials need to come up with different approaches to help cities.

"Harrisburg is going to have to get creative or get out of the way and allow us to have revenue tools," said Carlisle Mayor Tim Scott.

Highspire Mayor John Hoerner discussed an effort by his community and Steelton, both in Dauphin County and just outside Harrisburg, to secede from their school district and form a new one.

"You can't keep taxing the residents from Steelton and Highspire to sustain this school that is failing in education," he said.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.