Here’s the video from this week’s NewTV/League of Women Voters Newton sponsored alderman debate between incumbents Deb Crossley and Brian Yates and challenger Chris Steele, who are vying for the two Ward 5 Aldermen At-Large positions on Nov. 5.
Decision 2013: Newton Ward Five Alderman At Large Debate from NewTV on Vimeo.
Chris Steele,
You asked a very relevant question, but didn’t have time to answer it yourself and I’m sure you had an answer prepared. What would you do with OPEB?
Terrific debate! All candidates were well versed on the issues. Bottom line, whoever wins the race in Ward 5, Newton wins!
@Janet, thanks!
@Tom, thanks for the follow up. Sorry for a somewhat delayed response as I hadn’t initially seen any responses to the thread. The sad news from earlier today has justifiably taken a lot of today’s attention.
The OPEB question is a difficult one, but not – I think – unsolvable. First, we should remember that the benefits in question are due to real people and promises that we as the City made over time. These we need to honor. We also need to remember that many of these obligations were made due to state requirements and as such we need the Commonwealth to be part of the solution.
I am a board member at MassEcon and we recently had the benefit of speaking with Michael Widmer of the Massachusetts Taxpayer Association. I asked him directly about Beacon Hill’s efforts to address OPEB and other such requirements. He said that the legislature has made a commitment to fully fund their own side of the liabilities by 2040. Clearly, there’s more work to do here.
It is important to note that time is a factor in OPEB. Compounding means that the more we address the problem today, the less of a factor it becomes in future. Conversely, the less we address it now, the problem becomes geometrically worse over time.
I propose that we need an approach that does three things: Address the statewide issue through serious work with Rep Balser, Rep Khan, and Sen Creem; reserve aggressively against our liabilities; and look for fair ways to share the health and retirement liability with future employees.
If I remember correctly, both Needham and Wellesley have successfully reserved against their OPEB liabilities. While granting that their budgets are vastly different from our own, I suspect it would be useful to at least look at how they went through their planning process.
Wellesley went forward with a debt exclusion to help fund its OPEB obligations.
http://www.wickedlocal.com/wellesley/news/x826733811
Chris, are you proposing something similar?
@Amy
No, I think we have basic work to do on limiting the growth of the liability before going to the voters – I only cite the Wellesley example to suggest that we can learn from others. Any ask to the voters should be done as the last step in a comprehensive strategy for addressing this problem.
Chris Steele – You participate in many community boards and commissions. What would be different from your proposed work on the BoA that would add value to Newton, and/or yourself, over and above from your work currently? In other words, what’s in this for Newton, and you, that you haven’t had an opportunity to effect through other community participation?
I was surprised that I agree with a few of Chris Steele’s points:
1. I am more than aware that Massachusetts municipalities are required to provide health insurance to its eligible employees and retirees with a minimum premium subsidy of 50%. Newton’s 70%-75% subsidy for new employees and 80% for legacy employees must be reformed and reduced.
2. I also noticed that the Massachusetts General Court is potentially debating an OPEB reform bill. While I think the bill doesn’t go far enough (especially for Newton), I would most likely support it myself. I agree with him that Newton should work with its state delegation to advance the OPEB reform bill.
3. I agree with him that Newton needs to take more proactive steps to address the liability before asking the taxpayers to pay more money. I have personally identified proactive solutions to solve Newton’s $601.8 Million OPEB problem.
4. I agree with him that Newton should address its OPEB liability sooner rather than later. Newton is negotiating new union contracts and now is a good time to address the OPEB liability. My solutions aggressively fund the OPEB benefit trust to eliminate the OPEB liability in 10 years
5. I agree with him that Newton should identify fair ways to share the health and retirement liability with future employees and my solutions address this.
Where I disagree
1. While Newton’s government made these promises to the unions, they were giving away taxpayers’ money and they made promises that are unaffordable.
2. The only assistance that I would expect from the Commonwealth of Massachusetts is legislative, technical and administrative reforms (such as increasing the eligible vesting period from 10 years to 20 or 30 years) . We shouldn’t expect the Commonwealth to assume municipal OPEB liabilities since the Commonwealth has already racked up $82 Billion in outstanding debt and unfunded liabilities itself.
Thanks Chris.
Do you honestly believe that we will get much support from the state? Inother words, we can wait ands wait and nothing happen which will give our elected officials an excuse not to do anything and OPEB will continue to grow. Thats my big fear.
Is there anyway we can approach our legislature and say we want to be proactive, but we don’t want to lose out on any benefit the city might get from any bill proposed can we be grandfathered in to any bill passed? That way don’t lose out on any benefit that may arise. I don’t have any faith on any relief from that state.
I heard NYC pays 50% of their operating budget goes to paying off OPEB.
A promise is a promise, whether we are happy with it or not. This means that changes made to existing recipients should be made via negotiation if possible and not by fiat.
Nobody is expecting a state bailout, but an increase in the vesting period, deliverable by MA state government, is a critical way for Newton and other government entities to reduce future OPEB liabilities.
Steve Siegel, Think of the rest of the 300+ municipalities in Massachusetts. Many very large one’s are, for good reason, the municipal equivalent of a welfare family — i.e., the majority of their income comes from gov’t aid. It’s not true that “nobody is expecting a state bailout”. Even with an extension of the amortization period, the likes of Lawrence, New Bedford, Brockton and Springfield will never have the financial capacity to do what Wellesley has done. There needs to be more done by the Commonwealth.
Do we have any comments by Mr Yates or Ms Crossley in this regard [Actually, I’d rather hear from our State Reps, but that’s not the purpose of this thread…]
Steve, I have to disagree with your first paragraph. I agree with your second paragraph.
1. Newton’s government promised taxpayer money to the unions. Newton’s government promised these benefits and stuck the taxpayers with the bill. This is an externality.
2. I’m glad you said that no one is expecting a bailout. No community should expect the Commonwealth of Massachusetts to bail it out of its pension and OPEB liabilities. I agree with you when you said that an increase in the vesting period, deliverable by MA state government, is a critical way for Newton and other government entities to reduce future OPEB liabilities. Granted, I was the one who brought up that piece of legislation.
http://www.massretirees.com/article/issues/health-insurance/fall-eyed-health-reform-hearing
All, Hingham began addressing its OPEB problem in 2009. Hingham did so without resorting to an override by instituting 50/50 health insurance. Winchester did the same thing in 2012.
Thanks @Tom and @Hoss
As Steve also points out, I’m not suggesting that we’re going to get a large bailout from the state, but we do need the legislature to help fix basic framework (including but not limited to the vesting period). Once this is done, we will have a much better idea what our negotiating flexibility is going forward and also understand how much we need to reserve against.
@Hoss – re your earlier question: happy to sit down and talk more, but the short answer is there is a fundamental difference between volunteering and being elected to make a difference in setting the course for the city. Let me know if you’d like to grab a cup of coffee?
Chris Steele — In re the distinction b/w volunteering and BoA, someone did explain the monthly compensation structure on the Board, right?? (*tries to make one of those smiley faces*)
@Hoss. *laughs*. Yes, of course.
It’s disappointing that coffee was the only libation offered so far. Is this Ward 5s future??
Here’s my question to candidates/elected officials-
After going through debates with the Mayor, if he wins, it sounds to me like he has no real plans to attack OPEB. I don’t include Ted, because I felt he had a plan. If Mayor Warren wins, how would you go about nudging him to be proactive in this matter?
Yeah? This is how it works. We all pay for the commitments our government makes, even if not every taxpayer agrees with these commitments.
Steve, 50/50 health insurance must be part of Newton’s OPEB reform program. Newton taxpayers will not pay override taxes to fund a benefit for unionized government workers that is being phased out in the Dreaded Private Sector.
Hingham implemented 50/50 health insurance in 2009 and that helped them begin funding their OPEB benefit trust. Winchester did the same thing in 2012.
I believe that those towns still made good on all promises previously made to retirees. They only changed the rules for future retirees. That’s a perfectly reasonable approach and what I think Newton should aim for.
The sooner that Newton can implement 50/50 health insurance the better.
Even if those towns only instituted 50/50 health insurance on future retirees and grandfathered existing ones, such changes have helped them reduce their OPEB liabilities significantly.
http://www.wickedlocal.com/winchester/topstories/x970307350/Selectmen-approve-changes-to-retiree-benefits