Pension shortfalls are coming home to roost
It was not long ago that I filed a motion against the proposed fiscal year 2011-12 town and school budget proposing that there be no additional spending this year until the real impacts of the state and local pension shortfalls were assessed. We suggested freezing new spending that amounted to roughly $600,000 and use this opportunity to put the pension issues behind us.
While the motion was narrowly defeated, much political attention was directed at it. In our opinion, it was a well-intentioned, forward-looking and reasonable request. We are not the only ones that feel this way. State Treasurer Gina Raimondo has published a report with pertinent facts: “Truth in Numbers: The Security and Sustainability of Rhode Island’s Retirement System.”
This pension is beginning to rear its head locally, as detailed in last week’s Jamestown Press article, “Higher Taxes Solution to Pension Crisis.” This article begins to shed light onto this issue indicating that, “The town will be paying 11.18 percent of its non-public-safety employees’ earnings into the pension fund. Next year – unless there are legislative reforms – the percentage will increase to more than 18 percent. That would be an increase of $242,000 on the town side, which would increase the property tax rate by 13 cents.”
The article goes on to state, “People who own a home assessed at $400,000 would have to pay an additional $50 per year in property taxes.” The $50 doesn’t include ”the pension deficit on the teachers’ side.” In summary, the take-away is that the full extent of this problem has not been determined, or disclosed fully.
To suggest that the dot-com bubble, 9/11, or the recent recession are the cause for pensionreturn shortfalls – and to not address these shortages either through larger employee contributions, pay freezes, or budget items that address account shortfalls via the normal budget process – is both unacceptable and undemocratic.
As of today, the burden seems to be on the backs of the taxpayer.
If not now, when will the public employees partner with taxpayers to maintain state and local government services that we have currently?
In an economy where certainty is an illusion, employment not secure and bonuses absent, when will the state and more relevantly, the town, begin to make wellintentioned, forward-looking and reasonable decisions in sharing this burden?
The Taxpayers’ Association of Jamestown hope that all parties will make sensible and equitable contributions in order to put the pension crisis behind us.
The author is the president of the Taxpayers’ Association of Jamestown.