STAMFORD – Mayor David Martin is asking for steep increases to fund pensions and retiree benefits for city employees as part of his annual budget proposal.
The city to date has not met its obligations for its employees’ retirement benefits. Martin said he wants to start making annual payments at a higher rate and diminish the city’s ballooning unfunded obligations.
“I’m going to be the first mayor ever who fully funds the required pension contributions and retiree medical contributions,” he said.
The city’s annual required contribution to the funds, he said, has not been entirely ignored, but never fully funded, either.
“I believe across the country the majority of counties, municipalities and states do not fund their (required contributions), and in the case of Stamford, we’ve never funded it, despite the fact that we are a triple-A-rated municipality, and I’m going to take it up.”
Rating agency Standard & Poor’s gave the city a triple-A appraisal, the highest it can bestow.
Between pension and other benefits, the mayor’s proposal calls for a spending increase of about $3.5 million, according to Thomas Dec, a spokesman for Martin.
Martin said he wanted to fund 100 percent of the city’s required contribution to pensions, and 90 percent of its contribution to retirees’ medical benefits.
“Next year I am going to fund 100 percent of both,” he said. And while rating agencies eyeball how cities fund their obligations, the mayor said, “Simply put, it is honest. It is beginning to try to bring honesty into long-term obligations.”
The mayor said the city has ignored the benefit funds it promised to its employees. Unfunded nonpension obligations alone have swollen to $200 million.
The mayor will formally present his budget proposal to the Board of Finance on Monday. Over the next two months, the finance board and the Fiscal Committee of the Board of Representatives will hammer out alterations to the proposal. Neither board has the authority to add expenditures to the mayor’s proposal, but either one may reduce his spending figures.
The city’s proposed operating budget alone is more than $500 million. The suggested jump in spending for pension and benefit contributions would comprise an overall increase of less than 1 percent.
About 80 percent of the total budget goes to salaries and benefits.
About half of the budget goes entirely to Board of Education employees and expenses.
The Planning Board has already proposed a capital budget — expenditures separate from the operating budget — to the tune of $104 million for the fiscal year that begins July 1 and ends June 30, 2016. That figure is more than double the capital budget for the fiscal year that ends in June. The capital budget will rely largely on bond sales, while operating budgets rely on taxes and other revenue.
Salvatore Gabriele, a Republican on the Board of Finance, agreed that taking care of the city’s pension obligations was a priority, but cautioned that the burden should not pass to residential taxpayers.
“We have to sit back and look, do we have the money to do this?” Gabriele said. “We have to take care of these unfunded liabilities … this should’ve been addressed starting over 10 years ago.
“This has been kicked down the road for the last 10 years and now we’re going to have to pay for it today, but we also can’t hurt Stamford residents at the same time,” he said.
Gabriele suggested that commercial property owners should shoulder more responsibility for city revenue. “With all the corporations that are in Stamford, why are we getting these tax increases? Why are the Stamford residents paying for all this?” he said.
He suggested revisiting the tax roll in the city’s Enterprise Zone, a swath of downtown where the city sought to attract economic development by offering state-subsidized tax abatements.
Rep. Jay Fountain, a Democrat who chairs the Board of Representatives’ Fiscal Committee, said that with calculated increases, the city could fully fund its obligations within a quarter century. Former Mayor Dannel P. Malloy had gotten the ball rolling on funding the city’s obligations before his successor, Mayor Michael Pavia, forestalled graduated increases in response to the economic downturn of 2008, Fountain said.
He and Rep. Mary Fedeli, a Republican on the same committee, said it would not be clear if city taxpayers could afford the proposed hike until they examined the entire budget plan.
Salary increases and new positions would be factors, Fountain said. “You have to look at those things to determine, what is the overall increase in the budget? If that were the only thing, we could afford it.”
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