Michael Brown: Labor foxes killed pension reform
June 17, 2008
Union Leader
THAT OLD saying about the “foxes guarding the henhouse” happened in real life this month right in our own State House up in Concord. To put it more bluntly, the foxes of organized labor actually ran the place during the committee of conference hearings on reforming the state’s pension system for public employees under House Bill 1645. Local taxpayers didn’t stand a chance.
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As has been widely reported for well over a year, one of the most important pieces of legislative reform that we desperately needed from our elected officials in Concord was HB 1645. This bill was intended to not only shore up the current financial mess of the state’s public employee pension system (with a more than $2 billion deficit), but more importantly institute a series of critical long-term reforms that would protect local taxpayers from further hits to their tax bills down the road.
Among the long-term reforms included were: Capping pensions for new employees at 100 percent of their highest full-year base rate of pay; reducing the supermajority that union employee representatives have on the Retirement System Board from eight seats out of 14 down to four; eliminating the automatic 8 percent annual increase in medical subsidy payments; and limiting the types and amount of non-salary income that can be used to inflate pension payments.
All of these changes (along with several others) would directly mitigate the amount of money that local taxpayers (towns and school districts) are required to pay to the state through their tax bills.
The bill containing all of the needed changes originally passed the House back on March 18 by a wide margin of 259-60. Even though Londonderry had two of its own representatives (Frank Emiro and Sharon Carson) vote against these needed reforms, the rest of our delegation who voted did support it, along with the vast majority of the rest of the House. At that point, it was looking very promising for local taxpayers. All that was needed to get this important bill passed and onto the governor for signing was the Senate. Enter the foxes.
In what can only be categorized as a complete about face to the widespread acceptance the bill received in the House, the Senate gutted all of the reforms noted above in the House version and replaced it with nothing more than a watered-down, pro-labor bill of their own by a vote of 24-0 (including Londonderry’s senator). Yup, that’s right — a unanimous rejection of a reform bill that passed the House by a 200-vote margin.
How could that be? Quite simply, the Senate’s concern for pleasing the powerful organized labor lobby in Concord took precedence over the purpose of the bill in the first place — true long-term reform of a system the local taxpayer can no longer afford.
On a subsequent vote in mid-May, the House rightly re-inserted the wording of its original version back into the Senate’s amended bill, which then went into a committee of conference for final debate. At that point, local towns and school districts were holding out hope that the senators and representatives on the committee would hammer out a true compromise that would retain many of the original reforms that were so widely supported in the House. The foxes made sure that didn’t happen.
Disappointingly for local taxpayers, the House members ended up throwing in the towel on just about every aspect of the original bill when they were pushed by the Senate conferees. The end result was a bill that contained very little in the way of long-term reforms to the system. A quote attributed to Rep. Ken Hawkins of Bedford captured the moment perfectly when he told the House, “We failed you badly.” Ken, you were right.
More disturbing than the final outcome, however, was the process itself as personally observed by representatives from the towns and school districts attending the committee of conference. Numerous times during the talks, labor representatives were able to enter the area where the conferees were seated and pass notes to senators during deliberations. The same access was not provided to others. And in one telling moment, when it appeared that the Senate was about to agree with the House recommendation of capping pensions so that no retiree could earn more in retirement than 100 percent of the highest year of base pay, the president of the Professional Firefighters of New Hampshire stood up and shook his head at the Senate and called for one of them to come out. In the end, that reform as well was removed from the final bill.
The foxes ran the State House.