"A good plan today is better than a perfect plan tomorrow."
Ė Gen. George S Patton
I applaud my Democratic friend from New London for his "hope that we now turn to a civil, fact based, debate about where voters want New Hampshire to head in the future." I might suggest that the civility begin by not continually referring to the new budget as a failure. Letís give it a chance to be tested.
As we move into mid-July, the reforms of the legislative session which ended on June 30 are beginning to kick in. There will undoubtedly be some bumps in the road as implementation goes forward.
One of the first bumps to occur is in the effect of retirement reform on the municipalities and school districts. In his February budget, Governor Lynch announced that he was cutting the 25% subsidy to towns and school districts that had been used to offset local employer pension costs. Experts believe that the high annual pension payments for town employees were part of the reason. His proposal would have stopped towns and school districts from up-shifting their pension costs onto the state budget.
Pensions are funded by employee contributions, employer (municipal and
school) contributions and money earned on the contributions. Except for
the subsidy, they are not funded by the state. Had the subsidy been
completely cut for next year, the taxpayers would have had to pay millions
of additional dollars in property taxes. By the time the new budget was
finalized, that impact had been covered.
The pension system is a separate entity, not under state control, but instead managed by a Board of Trustees. Until now, the Board has been controlled by a majority of union members. As part of the reform, however, that Trustee Board was also reformed. No longer will union members have a controlling interest on the Board. This had been a sticking point in the recent attempts to reform the pension system.
As of this writing, the outgoing Board is still in place. They held a special meeting on June 28, 2011, where they instructed their legal counsel to file a lawsuit to block implementation of the pension section of the budget, which would significantly raise the rates paid by the town and school district employers. By voting to sue the government, the outgoing Board fired their last shot to show displeasure at changing of the Board of Trustees.
But the legislature is pushing for quick appointments of the new membership to the Board at the Executive Councilís July meeting. The legislators want the new Board to reverse that lawsuit decision and withdraw the suit. If the suit is successful, the burden will fall onto the shoulders of local property taxpayers.
Included in the budget is a method for protecting taxpayers as the state subsidy disappears. "We needed to think about all the people who pay taxes and not just the people who draw pensions," said Rep. Ken Hawkins. "I think we worked out a system that is fair to employees, tax payers and employers."
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Contact: ken.s+sunacom.com (replace "+" with "@")