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Old 01-07-2014, 04:43 PM
 
1,768 posts, read 3,225,292 times
Reputation: 1592

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Report: Unfunded costs choking budgets in Mass.

By BOB SALSBERG
Associated Press
Published: Tuesday, Jan. 7, 2014 - 9:41 am

"BOSTON -- The state's cities and towns have shed more than 15,000 jobs in the past six years, and pension obligations, health care and borrowing costs will continue to squeeze budgets for the foreseeable future, according to a report issued on Tuesday.


Municipalities face a total of nearly $45 billion in unfunded liabilities, according to The Massachusetts Taxpayers Foundation, an independent, business-backed organization. Meeting those responsibilities could divert resources from schools, public safety and other services, the group warned.






















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Read more here: Report: Unfunded costs choking budgets in Mass. - Wire Business News - The Sacramento Bee
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Let's assume this is true. I m curious on other people perspectives about this issue. Is there way out of this? What is the way out, and who will pay the price?

(Please let's not bash the public employees. Yes, some are corrupt, but most are just normal, decent people trying to make an honest living.)

Personally this makes me worried. I would like to think that people who lead our towns would be proactive to stop this bleed, but I see majority of leaders getting all the benefits they can get, and leaving future generations to deal with it, as those before them did the same.

My belief is that MA homeowners will be left to foot the bill, and also that this dynamic between homeowners and towns pushing for even more overrides should be very interesting to watch, considering very high cost of living around here, and that most families are stretched thinner anyway. I am afraid that we will scare away business, as well as younger families.




[LEFT]
Read more here: Report: Unfunded costs choking budgets in Mass. - Wire Business News - The Sacramento Bee
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Last edited by CaseyB; 01-07-2014 at 05:49 PM.. Reason: copyright
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Old 01-07-2014, 06:34 PM
 
3,176 posts, read 3,675,666 times
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This shouldn't be a shock to anyone. I know everyone in MA considers public employees to be sacred but the reality is that no one in the private sector gets a pension anymore (and very few get free or close to free health care). In addition if you look at the state government for instance, attorneys working for the state have a lower salary than an MBTA bus driver. Does that make sense?

At some point things will have to change.
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Old 01-07-2014, 06:40 PM
 
Location: RI, MA, VT, WI, IL, CA, IN (that one sucked), KY
41,938 posts, read 36,797,099 times
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State employees pay for their pension. I'm working to get into the system and I'll be taking a 20% cut in compensation to just get my foot in the door, then they take the pension $ out of my paycheck. If it wasn't a decent pension (which you have to stay 10 years to even vest), why would anyone do that? I'm not complaining, but it is an investment in my future. I'll have to be there 10-20 years before it can make sense. Heck, Ill be losing vacation time too. I havent ever had a private sector job with so few vacation days to start.

Also, I wouldn't be getting free health care. In fact I'll be paying more than I did in the private sector for my Harvard Pilgrim plan.

The health care is the real issue. Not only for public sector employees, but universities and everywhere else. We simply have to get our out of control health care costs fixed.

So yeah, if you want to get rid of the pension, fine, but increase my salary the 25% to get back to what I was in the private sector and put in a match like I was getting there.
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Old 01-07-2014, 06:49 PM
 
1,270 posts, read 5,403,049 times
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well if the millionaires who live in the towns and cities would give even 5% of their annual income to the towns we wouldn't have these problems no would we??
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Old 01-07-2014, 06:56 PM
 
3,176 posts, read 3,675,666 times
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Quote:
Originally Posted by timberline742 View Post
State employees pay for their pension. I'm working to get into the system and I'll be taking a 20% cut in compensation to just get my foot in the door, then they take the pension $ out of the system. If it wasn't a decent pension (which you have to stay 10 years to even vest), why would anyone do that?
The taxpayers contribute more to your pension than you ever will. You are not fully funding your pension. In fact you aren't even coming close which is why MA has over $25 Billion in unfunded pension liabilities.

Quote:
Also, I wouldn't be getting free health care. In fact I'll be paying more than I did in the private sector.
State Employee Basic Life and Health Plan Rates

Those are cheap premiums.

I have nothing against public employees. I'm just pointing out that their retirement benefits are far better than what we get in the private sector, and that it comes at a cost to the public.
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Old 01-07-2014, 07:16 PM
 
Location: RI, MA, VT, WI, IL, CA, IN (that one sucked), KY
41,938 posts, read 36,797,099 times
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I don't know if I'll get anything. I probably won't. Most people don't as they don't stay 10+ years. That is a long long time.

The benefits aren't better than I ever got in my 20 years in the private sector. Not health care or vacation.

And if the public is subsidizing it a little, you are in turn getting employees for about 25% less (in my case) than I made in the private sector.

Choose your poison. Get rid of the pension and give me market rates so I can afford to save in a 401k or 403b like I did in the private sector. You can't have it both ways. I would, and many people would, be better off since the chances of sticking around until vesting or retirement are slim.
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Old 01-08-2014, 05:58 AM
 
643 posts, read 1,034,467 times
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I'm under the impression that MA has reformed their pension program where new participants are now nearly, if not completely, funding their own pensions. The problem is with the pensions that are already on the books.
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Old 01-08-2014, 06:17 AM
 
3,176 posts, read 3,675,666 times
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Quote:
Originally Posted by dravogadro View Post
I'm under the impression that MA has reformed their pension program where new participants are now nearly, if not completely, funding their own pensions. The problem is with the pensions that are already on the books.
It is not fully funded. They are contributing a percentage of their salary and we kick in a percentage. While it is better funded than it was it is still risky. If the stock market were to underperform the taxpayers would have to make up the shortfall.
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Old 01-08-2014, 09:35 AM
 
1,768 posts, read 3,225,292 times
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Does anybody knows of any town in MA that is more proactive about this issue or have already resolved this issue?
It is unclear if every town is affected, but I will assume yes, since even the wealthiest towns are gearing for all sorts of tax overrides. Just read about Wellesley is doing it soon. Belmont will have to do one soon as there is no money for high school renovation (seems badly needed). Arlington got something passed recently I heard. How can we be so wealthy and so poor?
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Old 01-08-2014, 09:47 AM
 
Location: RI, MA, VT, WI, IL, CA, IN (that one sucked), KY
41,938 posts, read 36,797,099 times
Reputation: 40634
Quote:
Originally Posted by kingeorge View Post
How can we be so wealthy and so poor?

Well our health care system is a mess. Year after year after year the costs increase multiples of inflation.

And it is way too easy for our politicians to pass the buck (and we let them). When they do act, the changes take effect after they leave office. Everyone just wants to kick the problem down the road to the next guy.

In reality, there isn't much incentive for anyone to make the tough choices and fix anything, since they'll be voted out next election by the person promising to fix everything without making the hard choices, or pointing the finger at the "problem" which are caused by the "others" (undocumented workers, the poor, the rich, etc).

Nothing insightful with all this, but there aren't any real answers until people realize we are going to have to pay a bit more, and do with a bit less, or we overhaul the system and a lot of people don't like big changes (and the people that will lose profits because of those changes will scare the heck out of the voters).
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