Towns to sue over retirement cuts

Karen Langley reports in the Concord Monitor on New Hampshire municipalities suing the state for cutting the state subsidy for local retirement benefits.

The state has long provided 35 percent of the payments into the state retirement system for local employees including teachers, firefighters and the police. But the state budget reduced that contribution to 30 percent this fiscal year and to 25 percent for fiscal year 2011. The association estimates the change will cost municipalities and school districts $27 million over the two years.

Groups representing municipalities, school districts and counties are crying foul. The organizations wrote to their members highlighting the budget change and informing them of the pending lawsuit. The suit will argue that the reduction in state payments violates a ban on unfunded mandates in the state constitution. In effect, the ban mandates that the state obtain municipal permission to impose or expand programs that will require local money.