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A crisis is on the horizon for local governments trying to pay retired workers. A report by the Leroy Collins Institute released today shows most municipal pensions are underfunded and getting worse. As Whitney Ray tells us, if the crisis continues more of your tax dollars will be used to pay benefit instead of paying for services like police and fire protection.

Aurora Hansen has worked for the City of Tallahassee for 23 years. She’s nearing retirement and her government pension is a major factor in her future plans.

“It’s going to be very beneficial for living expenses and for our quality of life,” said Hansen.

Luckily for Aurora, Tallahassee has a healthy pension fund, but statewide the outlook is a bit more bleak.

According to this report released Wednesday by the Leroy Collins Institute, in 2010, for the first time in state history, payments to retirees in the typical Florida pension fund far outpaced the money coming into the fund.

“A troubling new trend may be emerging where annual payouts exceed contributions,” said Dr. David Matkin.

The report doesn’t provide a city by city breakdown. Instead it looks at the average pension in Florida from 2005 through 2011.

“We take on the tough issues. We take on the issues that maybe other people aren’t looking at and we want to take them on in some depth,” said Dr. Carol Weissert.

While the economy has hurt investments, the report claims Florida’s pension problems were around long before the Great Recession.

“These municipal pension issues were not created overnight and they can not be solved overnight,” said Matkin.

Researchers says cities will have to make tough decisions to avoid a major pension crisis, although they don’t fear any cities going bankrupt in the near future and they believe municipal workers will continue to collect their retirement.

This report looked at all of Florida’s 492 public pension funds. The funds cover 115-thousand workers. The report doesn’t offer solutions, but in past reports the Leroy Collins Institute has recommended increasing the retirement age and limiting retirement benefits government workers receive for working overtime.