In The News: Municipal

Springfield has $761.6 million in the unfunded liabilities, which translates to more than $12,000 in unfunded liabilities per single-family home; Holyoke would be on the hook for $300 million, which translates to a liability of more than $18,000 per single-family home. And eight other cities in the commonwealth are in similar straits. “It’s a classic problem of the public sector,” said Michael J. Widmer, Massachusetts Taxpayers Foundation president, “You vote for all these benefits knowing what the cost will be in the future. But of course, you’re not going to be in office by then.”

The foundation, a Boston-based independent, nonprofit organization that conducts research on state and local taxes, government spending, and the economy, says the liabilities are not some hypothetical obligation but represent actual amounts taxpayers owe in today’s dollars for retiree health-care benefits already earned by current retirees and eligible employees and payable during the next 30 years.

Michael Widmer, the president of the Massachusetts Taxpayers Foundation predicts state budget writers will find a way to boost local aid.

Speaking of “fixed” costs (see above) the Massachusetts Taxpayers Foundation is out with a truly frightening report on the threat posed to municipal budgets by the cost of providing health care to retirees.

The study, from the Massachusetts Taxpayers Foundation, shows that Brockton owes more per household than any of the ten cities analyzed. Brockton owes just under $700 million in health care benefits for current and future retirees over the next 30 years.

A report released by the Massachusetts Taxpayers Foundation showed that Brockton owes more, per household, in unfunded future health care costs than any of the 10 cities it analyzed. In today’s dollars, Brockton owes $693 million in health care benefits for current and future retirees over the next 30 years.

“Neither of those options are feasible,” says MTF president Michael Widmer. He recommends scaling back retiree benefits and/or changing what cities and towns have promised current employees. Specifically, Widmer suggests increasing the age by which municipal workers can retire early from 55 to 60 and extending the number of years they must work (now 10) to receive full health coverage.

Fitchburg is facing a $186.6 million liability for retiree health-care benefits, jeopardizing funds for local services, according to a new study by the Massachusetts Taxpayers Foundation.

Lowell is facing a $432.7 million liability for retiree health-care benefits, jeopardizing funds for local services, according to a new study by the Massachusetts Taxpayers Foundation. The report, released today, found that cities, including Lowell, Lawrence and Fitchburg, have not put aside nearly enough money to pay the ballooning cost of health insurance promised to their retired employees, as well as employees who will retire.

Brockton fares the worst among 10 Massachusetts cities in a survey of unpaid health care benefits for public employees. The report by the business-backed Massachusetts Taxpayers Foundation says each owner of an average single-family home in Brockton would have to pay nearly $19,826 to pay down the city’s debt.