Nashua legislators tackle pension problems

NASHUA — Two local representatives are considering introducing bills that would help alleviate some of the rising contributions of state employer pension costs.

Since 2011, the city’s pension payments to the New Hampshire Retirement System have increased from $11.8 million to nearly $21 million, an increase of 74 percent.

This coming year, that amount will rise to about $23 million, according to Mayor Jim Donchess.

With a spending cap in place, Nashua officials will be permitted about $3 million in additional expenditures in the next budget cycle. If the pension costs take up $2 million of the $3 million increase, teachers, police officers and firefighters may need to be laid off to ensure staying under the cap, said Donchess.

“We can’t possibly do this without major layoffs,” added the mayor, who recently met with several Nashua representatives to relay his concerns.

Two legislative service requests have been submitted by Nashua Rep. Don LeBrun and Nashua Rep. Mariellen MacKay.

Both proposals, according to Donchess, would slow down the rate of increases in pension costs, and alleviate some of the financial burden facing the Gate City.

“This is hitting all municipalities — not just Nashua,” he said.

LeBrun’s proposal relates to the amortization of the retirement system’s unfunded accrued liability, which would push out the date by which cities must reach 100 percent funding.

MacKay’s proposal relates to the retirement system’s assumed rate of return, which would still allow assets to be built, but at a slower pace.

“There is going to be a lot of opposition to all these bills, but the city really needs a lot of help with this,” Donchess told the Nashua delegation and city officials gathered for a legislative meeting Wednesday at City Hall.

MacKay agreed that there will be a tough fight in Concord to gain support on either of these proposals, but she said it is important to begin the discussions and prompt legislators to think about the issue.

“We have choices to make,” she said, adding there are more “humane ways” to address the budget crisis rather than closing a fire station or shutting down a school.

A separate, third legislative request is being proposed by a representative outside of Nashua, which would restore 15 percent of the retirement system contribution.

Alderman Ken Siegel, Ward 9, described the goal of 100 percent funding as absurd, maintaining a more reasonable figure would be 85 percent.

“We have this gigantic-like icepick coming at us. We have run out of time,” said Siegel. Earlier this year, aldermen created a trust fund to help cover the rising costs of state employer pension costs, even though some city officials argued the fund is a way to skirt the spending cap.

Alderman Brian McCarthy, president of the board, said the pension funds have become a tremendous burden.

“It is costing us a small fortune,” he said, claiming today’s taxpayers are paying for past, present and future pension costs.

Donchess said that if the city only had to pay an $8 million a year contribution as it once did, taxes in Nashua could drop by almost 10 percent.