WASHINGTON (AP) — Baby boomers and retirees make up the fastest-growing populations in the Washington suburbs, new data show, growth that experts say will strain state and local governments to the breaking point.

In nearly every local jurisdiction and in the District of Columbia, those ages 55 to 64 make up the fastest-growing population group — growing anywhere from twice to five times the average growth rate over the last decade, according to Census Bureau data released Thursday. But unlike the district, where 20- and 30-somethings are also increasing, the region’s suburbs are entering their golden years.

As baby boomers enter retirement and begin collecting pensions and Social Security, government funding for those programs will be in trouble.

“Those pensions costs are soaring and many of them are underfunded,” said Richard Johnson, director of the Urban Institute’s Project on Retirement Policy. “So there’s not enough savings to pay out these benefits once people start collecting. It will force governments to cut on services or raise taxes.”

In some places, the strain has already started. In the Maryland suburbs and Fairfax County, those older than 65 are the second-fastest growing population group. In rapidly growing Loudoun and Prince William counties, the retirement-age population more than doubled.

Across the river, Arlington County is an exception as it mirrors D.C.’s growth with young professionals, a rise experts attribute to the urban development and lifestyles there.

Arlington and D.C. are also the only local jurisdictions whose median ages slipped over the last decade. Other jurisdictions saw their average age grow between one and two years.

The convenience of urban areas that attracts young professionals is also equally attractive to new retirees, said Ben Orr, a Brookings Institution analyst.

“Hospitals, health care, transportation — proximity to all those things is important,” he said.

But financially, local governments are getting a one-two punch as the recession has squeezed retirement portfolios. According to an AARP survey released Wednesday, two-thirds of Americans who recently began collecting Social Security retirement benefits did so earlier than they had planned. In addition, the Maryland pension fund is $33 billion underfunded and Virginia’s is nearly $18 billion underfunded.

Experts predict that local governments will look to cut education funding to pay for the increase in the cost of services for boomers. In Montgomery County, where 57 percent of the budget is dedicated to public schools, the County Council sought to close its $300 million budget gap with education cuts. The council reduced employee benefits and the school system’s contributions to retiree health benefits in the budget scheduled to be formally approved Thursday.

That’s a sign of things to come as Johnson noted county and local governments will feel the baby boomer strain more than the federal government as Medicaid costs increase, growth in income tax revenue stalls and retirement funds are depleted. Johnson predicts governments will cut back on benefits for its younger employees and ask them to contribute more from their paychecks toward their health care plans.

But there is a silver lining — thanks to its urban environment, the Washington region isn’t aging as quickly as the rest of the country.

“By 2040 the age distribution of the country is going to look like it does in Florida today,” Johnson said. “You really can’t avoid it.”

The Washington Examiner

(Copyright 2011 by The Associated Press. All Rights Reserved.)

  1. Dinger says:

    And the state and federal governments didn’t know that this was going to happen?!

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