Today’s Globe has a column by Sam Allis talking about what no one else seems to want to talk about, the spiraling and unsustainable numbers involved in municipal health care and pensions. Allis centers his discussion on the Mayor’s race in Boston, but his numbers apply to most, if not all, municipalities. Some tidbits from the column.
Fact: From FY 1993 to FY 2010, inflation in Boston rose 70 percent. During that time, pensions for city workers rose 103 percent. Health insurance costs shot up 217 percent.
Not sustainable you say?? It is the same everywhere, and the news is even bleaker on pensions, where cities and towns have yet to feel the real effect of the sizeable losses incurred by municipal and state pension funds. Those bills will be coming due soon, and the resulting impacts will be devastating.
If all of this weren’t enough, consider the 24 percent loss in the city pension fund in 2008, from $4 billion down to about $3 billion. We won’t start to feel the effects of this until FY 2012, a rude intrusion into Tomorrowland. It’s also a good bet that the $243 million in reduced state tax receipts reported last week will mean more cuts in Boston’s operating revenues.
With the severity of the problem you might think that it is a major topic of discussion for Beacon Hill and elected officials everywhere. Think again!
“It’s the 1,000-pound gorilla that no one wants to talk about,’’ says Sam Tyler, head of the Boston Municipal Research Bureau, in a moment of some understatement. The bureau is an independent outfit that keeps tabs on city tax policies, service delivery, and schools.
Major structural changes are coming, either in concert with a well thought out plan, or via a response to a financial collapse. And Allis has certainly correctly cited the political results of attempted change in this area.
Sooner or later, some mayoral candidate will make this a major campaign issue. There will be buckets of blood on the floor.
It is like beating a dead horse, but for municipalities there is nothing more important, and a lack of action just brings the day of reckoning that much closer. Read the Allis article here.
Bill Manzi.com 