Globe Editorial

Scrap ‘municipal relief’ bill — too few savings, too many risks

July 15, 2010

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BY THE time the so-called “municipal relief’’ bill limped out of a legislative conference committee this week, proposals that might have helped cities and towns cut costs had been weakened almost to the point of irrelevance — while some destructive provisions survived. At this point, the best option is to scrap the bill. The Senate should vote it down.

The most important thing the Legislature can do to help cities and towns is to give them more control over the design of employee health plans. But efforts to do so went nowhere in the face of stiff union opposition.

Meanwhile, nothing else in the bill will produce a significant, long-term reduction in municipal costs. Some measures might be modestly helpful: Cities and towns could, for instance, join together to operate regional property-assessment offices. But such provisions won’t save much money right away.

Other provisions are bad news. The bill would let cities and towns delay some costs by extending the deadline to pay off unfunded debt obligations. Most public-employee pension systems don’t have enough money stashed away for the benefits that they’ve promised, and under current law they have until 2030 to catch up. The municipal relief bill would extend the deadline for a full 10 years.

There’s a superficial logic to this change; pension funds have suffered deep losses, and sticking to the existing schedule will require much higher annual payments than once anticipated. But if the Legislature intends to let communities postpone the inevitable, it should at least insist on further reforms. After all, the state has too many pension systems; many municipal employees retire relatively young; the rates of return that most of the state’s pension funds are projecting may not be realistic. Far from fixing these flaws, the municipal relief bill would make the shortfall worse by allowing cities and towns to grant larger cost-of-living increases to pensioners.

Amid an economic downturn, cities and towns are in a jam. But the final bill denies them the tools to reap meaningful savings today, while giving them the option to push off their costs deep into the future. It’s a dangerous combination, and the Senate should reject it.

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