NH Retirement System reform may hit cities and towns

Shira Schoenberg leads her Capital Beat column in the Concord Monitor with some good old fashioned, green eyeshade, public policy reporting on the problems facing the New Hampshire Retirement System.

Actuarial consultant Gabriel, Roeder Smith & Co. is recommending that the retirement system raise the rates for employer contributions by an average of 22.68 percent in 2011. The increase would be lowest for state employees and highest for local police officers, firefighters and teachers.

"This is going to be a good-size hit on (municipalities') budgets," said Barbara Reid, government finance adviser for the New Hampshire Municipal Association.

Dean Michener, director of governmental relations for the New Hampshire School Boards Association put it this way: "This kind of increase is just not sustainable."

Don't worry. She's got plenty of the campaign tidbits that make the column a must-read for political junkies as well.

NH Building Aid not sustainable

Karen Langley in the Concord Monitor reports on the state's Building Aid Program, which is currently funding by borrowing money to give to local school districts.

The state pays out about $45 million in partial reimbursement of school building costs annually. The money was included in the state budget's general fund until 2009, when an increasingly tortured economy pushed legislators to borrow the aid.

Borrowing the money can work as a temporary salve but would have a crippling effect if continued, the state treasurer has told members of the legislative committee commissioned to study the program. If the state continues bonding at current rates, the annual debt service will reach $50 million by 2020, said state Treasurer Catherine Provencher.

A crusader for the public's right to know

The Concord Monitor asks how much of what goes on at Town Hall should the public have the right to know?

The short answer: nearly everything.

Trouble is, reasonable - and sometimes unreasonable - people can disagree over the specifics. In New Hampshire and across the country, there will always be public officials working hard to keep the public's business from the public. That's where lawyers like Bill Chapman come in. And thank goodness.

Chapman, who has long represented the Concord Monitor and other news organizations, will receive the annual First Amendment Award this evening from the Nackey S. Loeb School of Communications in Manchester. Chapman, who has fought for open government in New Hampshire for nearly four decades, is well deserving of the honor. The beneficiaries of his hard work, after all, are each and every resident of the state - citizens who have the right and ability to learn more about the workings of their government and court system because of his efforts.

Too little focus on health costs

BIA President Jim Roche writes in the Concord Monitor on the need to examine the costs of the health care bills making their way through Congress.

It's remarkable, therefore, that health care reform under consideration by our congressional delegation in our nation's capitol seems very likely to add to health care costs, not reduce them. What happened to "bending the cost curve" and eventually lowering it?

Pick your source - the Congressional Budget Office, the Lewin Group, the Centers for Medicaid and Medicare Services, and others - they conclude that health care reform legislation under consideration will, incredibly, increase costs, not lower them.

Lots of attention is being paid to expanding government programs like Medicaid, or creating new ones like a "public option" insurance plan, to cover more uninsured and underinsured individuals. Unfortunately, the federal government's long track record of grossly under-funding health care providers for their cost of caring for individuals in existing government programs like Medicaid and Medicare makes many employers understandably concerned about expanding them or creating new ones.

More under-funding from the federal government means more cost-shifting to the business community in the form of higher health insurance premiums. How is this reform?

Concord residents respond to incentives

Concord recently started charging resident for each trash bag they drop off at the dump. Since the price went up, the amount of trash being dumped has gone down. Amy Augustine reports the figures in this morning's Concord Monitor.

In the first three months of Concord's pay-as-you-throw program, overall trash volume has dwindled, recycling rates have soared and the city has saved itself a significant chunk of change, according to figures released yesterday.

Comparing quarterly figures from July to September of 2008 with the same period this year, the preliminary report shows Concord's solid waste volume is down nearly 50 percent - to 2,118 tons from 4,151 tons. Recycling is up about 75 percent to 888 tons collected in 2009 from 508 tons in 2008.

We've been critical of Concord's efforts to force local grocery stores to subsidize their new trash fee scheme. But we never doubted that increasing cost would lower demand. Concord residents are recycling more, and finding other ways to reduce trash volume. Maybe they reducing the amount of waste they produce, or they may be avoiding the trash bag fees by using private garbage services or finding a place to get rid of their trash outside city limits.

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.

SEA chief re-elected to 6th year

Karen Langley reports in the Concord Monitor that SEA President Gary Smith has re-elected to another year at the head of the union.

Union delegates meeting in Nashua yesterday cast 120 votes for Smith and 93 votes for opponent Ed Hager, said SEA spokesman Mike Barwell.

The election was the outcome of a Department of Labor investigation into complaints made by Smith's opponents after the union elections last year. The Department of Labor and the union settled with no admission of fault and an agreement to hold new elections for the second year of the term.

Smith said yesterday the vote was a vindication.

"We ran a fair and open campaign and election last year. We ran a fair and open campaign and election this year," he said. "It ought to clear up any doubt about the veracity of our process."

Keep talking about state's tax structure

The Concord Monitor wishes that critics of this week's Tax Summit are right, and that it was a step closer to an income tax in New Hampshire.

Yesterday, lawmakers attended the second day of a two-day summit held by the House Ways and Means Committee to hear testimony about New Hampshire's tax structure. Because the committee's chairwoman, Democratic Rep. Susan Almy of Lebanon, has voiced support for an income tax in the past, some Republicans, including Hess, saw the event as part of a conspiracy to kill the so-called New Hampshire advantage that comes with not having a general sales or income tax.

The committee was careful to ensure that the representatives of both sides of the issue had a chance to air their views. That didn't quiet critics who treat the state's unfair tax structure like previous generations treated suicide, cancer and divorce, something that should not to be discussed in public. But silence allows ignorance to prevail and problems to worsen. Putting all the options as all parties see them on the table, as the committee did, is a wise approach.

State subpoenas government center's records

The Concord Monitor reports that the New Hampshire Secretary of State's office is seeking records from the Local Government Center.

The secretary of state's office has issued a subpoena ordering the Local Government Center to hand over financial and administrative records as part of an investigation into the center's finances.

State regulators are investigating a complaint that the center is misusing its member contributions. A hearing on the matter had been scheduled for Thursday, but no one from the Local Government Center showed up, prompting the subpoena, said Kevin Moquin, an attorney with the state Bureau of Securities Regulation.

It takes two to negotiate a deal

James Cole writes in the Concord Monitor that the paper has not done enough to investigate the State Employees Association case against the state contract rejected last week.

As the only newspaper originating from the state capital, the Monitor has the responsibility to do more for the public. Instead of putting the union's negotiating team, and to no small extent state workers, on the pillory, the Monitor could be researching whether cuts to state workers are the only or best way to close any budget gap. It could be looking at whether there is a budget gap and what caused it.

The SEA has claimed that the state:

• has 1,473 part-time non-classified employees with an average pay of $74 an hour.

• has increased spending on outside consultants by 40 percent.

• has rejected proposals from the SEA that would have saved the state over three times the $25 million figure floated in the budget.

• spends more than twice as much on outside contractors as on state employees.

For state, a $110 million question

Daniel Barrick recaps the JUA Lawsuit in the Concord Monitor, and examines what would happen if the state loses the $110 million it seized to balance the state budget.

"Am I concerned? You bet," House Speaker Terie Norelli said last week. "But am I afraid we're about to get knocked off a cliff? Not at all. There is not an immediate crisis."

Still, others say the tensions that accompanied last week's layoff announcement barely hint at the difficult decisions that will be necessary if the state loses its claim to the malpractice money. Some, including Republicans in the Legislature, are calling for Lynch to offer specific plans now in preparation for that outcome.

"Frankly, a hole of the magnitude we're talking about is going to require a top-to-bottom re-evaluation of the budget. You can't just tweak here and there," said Charlie Arlinghaus, president of the Josiah Bartlett Center for Public Policy, a free-market think tank in Concord. "The difficulties get worse the longer you delay."

Let first-time home buyer credit expire

The Concord Monitor editorial page, never shy about advocating government intervention in the markets, comes out against extending the $8,000 first-time home buyer tax credit, which either goes to people who would buy homes anyway or pushed consumers into buying homes they otherwise couldn't afford.

That credit is slated to expire at the end of next month, and applications filed now may no longer grind through the mill fast enough to qualify. That's led the real estate industry and some members of Congress, most recently Rep. Carol Shea-Porter, to push to extend the credit for another six months or so. That would be a mistake.

The credit has helped to keep the housing market from sliding quite as far as it might otherwise have, but the money has largely gone to people who would have bought homes anyway because home prices have dropped so dramatically. Brookings Institution economist Ted Gayer estimates that 85 percent of the 1.9 million people who will receive the tax break would have purchased homes anyway.

Setting the wrong kind of records

The Concord Monitor rans an AP article chronicling the staggering amount by which the federal budget deficit set a new record.

The federal budget deficit has surged to an all-time high of $1.42 trillion as the recession caused tax revenues to plunge while the government was spending massive amounts to stabilize the financial system and jump-start the economy.

The imbalance for the budget year ended Sept. 30, more than tripled last year's record. The Obama administration projects deficits will total $9.1 trillion over the next decade unless corrective action is taken.

As a portion of the economy, the budget deficit stood at 10 percent, the highest since World War II, according to government data released yesterday.

"You can't take things that don't belong to you."

Shira Schoenberg reports on yesterday's oral arguments at the Supreme Court in the JUA Lawsuit.

Attorney Kevin Fitzgerald, who represents the policyholders of a state-created medical malpractice fund, summed up the complex litigation over $110 million in nine words: "You can't take things that don't belong to you."

Lawyers for the state and for policyholders of the Joint Underwriting Association's medical malpractice fund argued before the state Supreme Court yesterday over who controls the $110 million sought by Gov. John Lynch and the Legislature to balance the state budget.

GOP warned against insurance fund raid

State Senator Sharon Carson writes an op-ed in the Concord Monitor responding to Senators D'Allesandro and Reynolds justification of taking $110 million in JUA funds to balance the budget.

As part of their response to the difficult economy, the Democrats seized $110 million from the JUA fund to balance excess spending for 2009, 2010 and 2011. The doctors insured by the JUA then filed suit, claiming that the state was unlawfully taking money from a fund that it had no legal rights to. In July, the Belknap County Superior Court blocked the state from seizing the money, indicating that the confiscation of private funds in this manner was unconstitutional. The state appealed to the New Hampshire Supreme Court, and oral arguments will be heard today.

Senate Republicans warned that the passage of a budget dependent upon $110 million that belongs to the members of the JUA would be devastating to the economic well-being of this state. Lynch endorsed the budget, signing it into law knowing that this precarious proposal would be subject to lawsuits endangering the budget as a whole.

True leaders would have held the line and spent only what was necessary. True leaders understand that they are stewards of the people's money and that the people expect them to lead by example. If Democratic leaders had held the line on spending, there would have been no need for the JUA money and hence no costly lawsuit.

NH Supreme Court hears JUA case

The Concord Monitor runs Norma Love's AP preview of today oral arguments in the JUA case at the New Hampshire Supreme Court.

The policyholders, who include doctors and medical providers, also argue that if the state takes the $110 million and the fund fails to retain enough reserves to pay claims, their costs would be driven up to cover the claims.

Kevin Fitzgerald, the policyholders' lawyer, argues that the constitution requires the state to pay compensation if it takes property, but that can't happen if the property is money.

"If the state takes $1, it has to pay $1 for it. At the end of the day, it can't take it," Fitzgerald said last week.

The state is arguing that it set up the fund, the Medical Malpractice Joint Underwriting Association, in 1975 to fill a gap in the availability of malpractice insurance and did not give policyholders a vested interest in any surplus.

Lynch Layoff Roundup

In the Telegraph, Kevin Landrigan says Governor John Lynch is moving forward with plans to lay off 250 workers and demote 60 more.

Some of the savings will occur through the elimination of vacant jobs that are paid for in the existing $11.5 billion state budget, Lynch told reporters.

The three-term Democratic chief executive said some employees at all levels of authority will be let go, but whole agencies and specific jobs solely paid for with federal or other nonstate dollars would be exempt from the layoff.

Many of those vacancies were already included in the budget, which extended the partial hiring freeze imposed by Lynch in February 2008.

Shira Schoenberg gets reaction from the head of the State Employees Association in the Monitor.

"Services are going to go unprovided," said SEA President Gary Smith. "Kids are going to go unprotected. Elderly are going to freeze. And we're going to be able to say this didn't have to happen. . . . This happened because the governor didn't recognize the need and didn't give the resources to it."

Smith said the union is considering whether it has any legal avenue to challenge the layoffs.

He added that after the vote, Lynch had little choice.

"(Lynch) built his own political box," Smith said. "He had nowhere to go but to show that he's tough and can follow through on his threat."

In the Union Leader, Tom Fahey reports that the cuts will come from departments funded with state General Fund dollars.

Lynch would not specify what government agencies will be hit. Only jobs that will save the state money will be cut, he said.

That means layoffs are unlikely at the Department of Employment Security, which is federally funded. Banking, Insurance and the Public Utilities Commission appear safe, too, since they run on fees from companies they regulate.

Many Safety and Transportation jobs rely on highway funds, not general tax revenues. Safety Commissioner John Barthelmes told his workers in a memo yesterday "there will be no layoffs" in his department.

The public has the right to know

The Concord Monitor editorial page comes out swinging for New Hampshire's Right to Know Law.

In this particular case, the state firefighters union is seeking salary information for the center's employees, suggesting that information is needed to determine whether money collected for health insurance is being used instead for compensation. It's certainly a provocative issue, but why the union wants the information is actually irrelevant. One of the virtues of the state's right-to-know law is that you don't have to say why you want to know. Remember, it's your business.

New Hampshire's Right to Know Law, RSA 91-A, is stronger in spirit than it is in practice. It was written when access to public records meant walking into Town Hall and asking to see a copy of property appraisals, for instance. You can do that, but more often, what the public is looking for are electronic records, such as the salary and benefit data sought by the state firefighters union.

A fair reading of the law allows information seekers to get their information in any format in which it is kept. So instead of a print out, they can get a copy of the Excel file. But the law in unclear, leaving room for bureaucratic manipulation and delay. It should be improved. For now, we rely on the good will of those filling our Right to Know requests to comply with the law, rather than attempt to hide behind it.

This is why we use this space to praise those state agencies who have shown a willingness to go beyond the minimal requirements of the Right to Know Law, and upheld its spirit. We're currently working with the Department of Revenue Administration to determine how the spending freeze Executive Orders have been implemented, and they've opened up their office to us. The Attorney General's Office this summer turned over an electronic copy of the entire case file in the Leishman Railroad Lease investigation.

Tweeting Justice

The New Hampshire Court System is on Twitter.

Critics deride Twitter as a way for trivial people to tell each other what they're having for breakfast. But it's an extremely efficient way to distribute and filter information.

Through Twitter, we can now gain rapid access to Court decisions and announcements without waiting for the New Hampshire press corps to publish them, or even having to check the Court System's website ourselves.

Hattip: AP via Concord Monitor

Sunday Column Rundown

Kevin Landrigan in the Nashua Telegraph- Lots of political stuff in there, but he does predict that state employees will narrowly approve the contract deal voted on last week.

With seniority playing a major part in who would get laid off, many state workers in these departments have a pretty good understanding whether they’re under the knife or free and clear even if the layoff is carried out.

With 6,800 voting, that means a super-majority of those casting ballots will enter the exercise expecting that if they vote the contract down, they’ll still have a job.

Then what drives them: the naked self-interest of not having to do without an estimated 3.5 percent of pay that comes with furloughs or the compassion that would oppose throwing any state worker out on the street in this tough economy?

I've predicted they vote down the contract when votes are counted tomorrow, so one of us will be right, and one of us will pretend this never happened.

Capital Beat in the Concord Monitor- pretty much all politics this week, focusing largely on the 2nd CD.

Under the State House Dome in the Union Leader- not online yet.

City Hall in the Union Leader- requiring city department heads to live within city limits, and lots of stuff about the upcoming city election.