While most legislators are enjoying their summer break back home, there is plenty of action in Concord. That action comes mostly in responses by those impacted by laws the legislature just passed.
A major issue relates to changes made to the New Hampshire Retirement System through provisions in the budget bills. Legislative leaders believed two things: first, something had to be done to bring stability to the finances of the underfunded system; and second, the plan passed last month did just that.
The state’s retirement system, which provides benefits to public employees at the state, county, school district and local levels is underfunded. Unless reformed, the anticipated cost increases for local governments will rise sharply and put added burdens on property taxpayers.
Part of the answer to what is a very complicated problem was to increase the contributions state and local government employees pay into the system. The new law has teachers and other employees paying 7 percent instead of the current 5 percent of their salary into the pension program. Police will pay 11.55 percent and firefighters will pay 11.8 percent. Before the new law went into effect, firefighters and police paid 9.3 percent.
Employees are being asked to shoulder more of the financial costs of their future pensions. But public worker unions have gone to court to seek a restraining order to prevent the new contribution plan from going into effect.
Meanwhile, the New Hampshire Retirement System board of trustees has voted to ask the courts to examine the constitutionality of a provision in the reform bill that keeps state and local employers from having their payments increase for the next two years.
The vote by the trustees was 7 to 5. Probably, that will be the last vote to be taken by the board of trustees in which union representatives hold a majority of the seats. The retirement system reform legislation took away the control by the unions by cutting the number of union board representatives from eight to four.
The Governor had vetoed the pension reform measure as a stand-alone piece of legislation (Senate Bill 3). The same language of SB 3 was added to the budget and the Governor let the budget bill become law without his signature.
A front page headline in the weekend edition of the Eagle Times read "Pension bill to hit towns, schools hard." Hitting towns and schools "hard" is not the intention of the retirement reform legislation. In fact, the goal was to have communities and school districts "held harmless."
For years, the state paid 35 percent of the retirement costs for local governments and school districts. The state provided these funds even though the state did not determine who was hired, how much they were paid, what the work conditions were or benefits offered.
Two years ago, the Governor’s budget lowered the state’s contribution to 25 percent. This year the Governor zeroed out the state contribution in his budget. The Senate made up for the 25 percent elimination by structuring the retirement system so that reduced rates paid by local communities and school districts would be equal or greater than the money lost with the 25 percent elimination.
The goal of budget writers was to avoid cost shifting down to local governments. If that turns out to be not the case, then the legislature will need to revisit the situation when we return to Concord in January for the 2012 session.
Hundreds of bills were passed during our January to June, 2011 session. Each will have an impact on someone. In the cases of retirement reform, public employers, public employees and the taxpayers who pay the taxes for the employers’ contributions all have a stake in the legislation.
I suggest there will be plenty of work in 2012 for the legislature when these impacts are better known and the changes needed to meet the original goal of the bills’ sponsors.
The Fells Historic Estate and Gardens is a rich seasonal treasure that I enjoy visiting. Located in Newbury on the shores of Lake Sunapee, it brings together beautiful gardens in a natural setting with an architecturally interesting house with its own history.
I was there a few days ago for a lecture by Abraham Lincoln scholar, Michael Burlingame. The program was free and 260 participants had signed up to attend. John Hay, who became like a son to Lincoln according to Professor Burlingame, was one of his two secretaries during his presidency. Hay later served as Secretary of State for two presidents.
In introducing the program, The Fells executive director, Karen Zurheide, read from some letters written by John Hay. One letter written in 1891 reported the new estate on Lake Sunapee was at a point of "half built beginning" with some complaints about the progress of the work and work effort of some of the locals.
A later letter invited some Hay friends to the estate. John Hay noted that his place, where he died in 1905, was a "beloved and barbarous" place. He also mentioned how close The Fells was to the Newbury train station. The Fells is a treasure worthy of a visit at any time.
We wish the best to Karen Zurheide as she leaves The Fells with much accomplished during her tenure and takes an executive position with a local bank.
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