To the Editor:
The recently completed Town of Hamden Audit revealed the following:
- The town's fund balance is $558,000, 0.3 percent of its $185 million budget and far below the recommended 5 percent level.
- The pension fund continues to be an item of concern.
- The town allocated a $21 million contribution in this year's budget, but that line item was only funded with $6.5 million.
Here is the town’s response:
- The pension problem is the administration's #1 issue
- Last year, fixing the medical insurance deficit was the #1 issue
- One thing to consider is Pension Obligation Bonds …it can't be kicked down the road.
- A $20 million contribution would translate into a four to five mill tax increase … but it's an option
Here’s the problem as I see it:
- The medical issue isn’t going away; as retirees grow older this expense can only go up. I anticipate further deficits in this account.
- Pension Obligation Bonds will kick the problem down the road. It is the quintessential panacea for any administration incapable of dealing with the problem. This will most certainly be the choice of the Jackson Administration.
- The pension and medical benefits as they exist today cannot be supported without crushing the taxpayer
I would differ with the Adminstration when it comes to numbering priorities. The pension deficit is by far significantly greater than the medical deficit, yet the priority last year was the medical deficit leaving the pension deficit to continue to grow.
Notice that the administration poses no solutions that require the fundamental restructuring of both the pension and medical benefits. Simply throwing more money at the problem only temporarily defers the pending catastrophe to future taxpayers and administrations.
I understand that most folks can’t appreciate the magnitude of the problem. However, I believe, the taxpaying public ought to know and this is my way of informing them so that they can see how this will eventually play out.
The solutions offered by the administration only place a band aid on the problem and do not go far enough to implement a cure. In other words, the patient can never find relief, but only linger in a constant state of misery holding on in desperation with the hope that in the future a cure will be found. This is totally unacceptable. We the people deserve better!
The solution is to first fix the pension and medical benefits so that they more appropriately reflect what most American’s already have as a benefit package. This may mean going back to the social security system and Medicare and embracing 401K plans as a viable pension alternative.
Once we reform benefits, then let’s talk about a funding alternative to meet our existing obligations. If we agree to more money now, without the corresponding reforms to the broken system, we will never see any meaningful changes. This can only translate to an ever increasing tax burden.