State must keep its pension promises

Posted Jan 31, 2017 at 2:01 AM

It’s not honest for state officials to boast about holding the line on spending when so much of that spending has simply been forced onto property taxpayers in cities and towns.

When the state broke its promise and stopped contributing its share of city and town pension costs it amounted to what Hampton state Rep. Robert Renny Cushing called “the largest single property tax increase in state history.”

The decision by lawmakers and Gov. John Lynch in 2011 to stop contributing toward the retirement costs of teachers, police and firefighters, downshifted $50 million from the state’s budget onto the backs of local property taxpayers.

The state lured many cities and towns into the larger retirement system by promising to contribute 35 percent of their retirement costs. When things got tough during the Great Recession the state broke its promise and that promise remains broken to this day.

That is why we fully support HB 413, sponsored by Cushing, which seeks to once again have the state make a contribution to the retirement system. While the bill only calls for a 15 percent contribution for teachers, police and firefighters — far less than the 35 percent the state had made for roughly 40 years — it’s a step in the right direction.

The bill narrowly gained approval last week in the House Executive Departments and Administration Committee by a vote of 10-9 and will soon go before the full House. The New Hampshire Municipal Association said last week it expects a lively debate on the House floor and a close vote.

We would ask House members to remember the history behind the state’s contribution to the retirement system when it comes time to vote on the bill.

The state made a promise to local governments in 1967 that it would aid in funding pension costs as an incentive for cities and towns to join the retirement pool to share its burden. At first, the state agreed to pay 40 percent of teacher retirement costs. In 1977, the statute was amended to include police and fire but the contribution was lowered to 35 percent of the cost, with municipalities picking up the remaining 65 percent.

When lawmakers adopted a budget in 2009 to lower the contribution from 35 to 30 percent in 2010 and then to 25 percent in 2011, it was only supposed to be a temporary measure to help the state through the recession.

Instead, lawmakers in 2011 eliminated the contributions altogether after making a one-time appropriation of $3.5 million.

Andrew Gorrill