Springfield, MA Delays Budget Vote Due to Pension Funding

The city council of Springfield, Massachusetts has delayed voting on the new budget due to issues with pension funding. The delay allows councilors to look over the budgets and deliberate on how to handle the city’s pension liability.

Mass. Live has more on the topic:

The City Council has postponed two special meetings this week to vote on the proposed $616 million fiscal 2017 budget after councilors raised concerns about the city’s pension liability that continues to rank as the worst-funded system in the state.

The council delayed special budget vote meetings on Tuesday and Wednesday, as formally requested by seven of the 13 councilors, led by council Finance Committee Chairman Timothy Allen. New dates are not yet scheduled.

“They wanted more time to deliberate on the extent of our unfunded pension liabilities,” said council President Michael Fenton, who has also raised concerns.

[…]

The city budget for the new fiscal year, beginning July 1, includes $50.6 million for pension costs and retiree health insurance, reflecting an 8 percent increase over the current year.

Allen and other councilors questioned if that increase is enough given that Springfield’s pension system is 26 percent funded — the lowest percentage in the state.

[…]

Timothy Plante, Springfield’s chief administrative and financial officer, told councilors Monday that the city has an “aggressive” plan to fully fund the pension system with a planned 14 percent increase in fiscal 2018 and another 14 percent increase in fiscal 2019.

Allen asked if more can be done for fiscal 2017, rather than “kick the can down the road.”

[…]

Councilor Timothy J. Rooke said there was no need to delay the vote on the city budget, saying it was “more saber-rattling than common sense.”

The pension liability crisis that faces the city and other communities across the state has been known for a long time and is under a long-term funding schedule, he said, questioning the “befuddlement” of some councilors. Rooke said that he has no problem with new councilors wanting to be educated on the issue, but that councilors with more experience “certainly should not be surprised” by the pension liability crisis

Massachusetts state law requires that all communities pay their pension liabilities in full by 2035.