Inter-Lakes and Meredith selectmen join suit for retirement funding
August 19, 2009
MEREDITH — The Town of Meredith and Inter-Lakes School Board will be joining other school boards and municipalities across the state in a class-action lawsuit protesting the state's "downshifting" of retirement costs from the state to local governments.
Like other cities, towns, school districts, school administrative units, and county governments, the Inter-Lakes School Board and Meredith Board of Selectmen were approached by several state municipal leaders in protesting the state's actions. In order to balance the state budget earlier this summer, the state reduced its retirement contribution from 35 percent to 30 percent, with plans to lower it to 25 percent in the 2011 fiscal year.
"This is just another example of the state trying to steal from municipalities, like with the malpractice fund," said Selectman Bob Flanders. "The state made a commitment as to their contribution, and it's just plain wrong. They made a legal contract, and trying to change it would be illegal. The only difference is that the state's not wearing a mask and carrying a gun."
New Hampshire Local Government Center Executive Director John Andrews, New Hampshire School Board Association Executive Director Dr. Theodore Comstock, and New Hampshire Association of Counties Executive Director Betsy Miller wrote that these actions would cost property taxpayers $9 million in the first year, and $18 million in the next year.
Inter-Lakes School Superintendent Phil McCormack said that the direct impact to Inter-Lakes is $40,000, reflected in the end of year encumbrances, in order to fully fund the retirement funds of their teachers. Interim Town Manager Brenda Vittner said that this year, the impact to Meredith would be $7,500-10,000, but the final figure would be expected to grow as the state reduced its contribution to the retirement fund.
"I don't know what the other districts are doing - some are doing it, some took a stance in opposition, and some are just letting it sit," said McCormack. "I would think we ought to support it. Unless someone stands up and says this is grossly inappropriate, it will continue."
The New Hampshire Municipal Association contends that the state's action is an "unfunded mandate" and constitutes a violation of Part I, Article 28-a of the New Hampshire Constitution, which states, "The state shall not mandate or assign any new, expanded or modified programs or responsibilities to any political subdivision in such a way as to necessitate additional local expenditures by the political subdivision unless such programs or responsibilities are fully funded by the state or unless such programs or responsibilities are approved for funding by a vote of the local legislative body of the political subdivision." In the letter sent to the two boards, Miller, Comstock, and Andrews wrote "we believe the Legislature intends to gradually eliminate its contribution altogether," and leave the entirety of retirement funding to local governments.
The state had earlier agreed to fund their portion of the retirement contribution through fees and tolls collected by the state. Earlier this summer, when the town of Moultonboro agreed to join the lawsuit, Selectman Betsey Patten said that when the state reduces the percentage that it contributes, local towns, cities, and school districts have to make up that cost by drawing from property taxes.
"I think it's important that we pursue this, and let the state know that we will not be their revenue stream," said Inter-Lakes School Board member Howard Cunningham. "I think the letter is a bit overstated - "the legislature intends" - it's difficult to think that they intend anything."
School Board Chair Jack Carty asked if they thought the district would actually profit, if any actual changes would result from the lawsuit. Cunningham said that since workers getting retirement made up a significant portion of the voting bloc, there is "a chance for significant change at the state level."
"We're told over and over again that taking a stand matters," said McCormack. "Taking an affirmative action sends a message that way."
In order to join the lawsuit, the NHMA asked that the Inter-Lakes School District contribute $1,888.14. The board unanimously approved the expense. The Town of Meredith had already contributed $1,346 to the NHMA's legal fund, and came to a consensus to use that unused funding to support this move by the NHMA.