, Gloucester, MA

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October 16, 2013

Editorial: City, town pension deficits need a higher priority

It’s not surprising that most municipal and state officials have not exactly tackled the unfunded long-term liabilities of the state and its cities and towns.

Quite frankly, the $146 billion — that’s right, billion, with a “b” — that’s already promised to current public employees and retirees across the state is a number that’s a bit difficult to get their arms around.

Yet the fact that state and local governments have set aside only 43 percent of that figure — while also facing $83 billion in unfunded pension and retiree health care obligations — is troubling to say the least. And while, yes, this money won’t be coming due until 2040, it is no longer a challenge that can be put off until “tomorrow.”

Yes, communities regularly set aside money toward pension and long-term health-care costs. And the Manchester citizens’ group that pushed the town to direct another $100,000 for this purpose two years ago deserves credit for taking that step — and raising greater awareness of the problem.

But the truth is, officials in all of our communities should carry out a thorough study of their city’s or town’s needs, and come up with a definitive budgeting schedule for how they can be met, even in stringing the cost estimates out to 2040.

For while an added $100,000 a year sounds good, that’s barely going to make a dent in Manchester’s estimated liabilities of $52 million.

And Gloucester taxpayers down the line will be grappling with the effects of the new 2012 firefighters’ contract that will need an added $1.6 million in the annual operating budget and yet-to-be-calculated additional pension funding through a scheduling structure that ups firefighters’ hours from 42 to 56 — and thus boosts their salaries and pension impact accordingly.

In Tuesday’s Page 1 Times story, the report from the Massachusetts Taxpayers Association is portrayed as sounding an alarm for our communities and their leaders.

It might not yet be an alarm, but it sure needs to be a significant wakeup call, and a cry to put this issue on the front burner of every community in the state.

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