Rhode Island’s pension system, and the race for governor surrounding it, has been grabbing all the headlines of late. But it’s neighbor, Massachusetts, is probably just as deserving of the press.
Data from the Center for Retirement Research suggests that Massachusetts’ various retirement systems are among the most underfunded in the country. And, like Rhode Island, the state will soon vote for its new governor.
Craig Douglas, the managing editor of the Boston Business Journal, says Massachusetts’ candidates for governor would do well to take a page out of Gina Raimondo’s book. From his editorial in the Providence Journal:
It’s high time Massachusetts had a governor who actually acknowledged the state pension system for what it is: a ticking time bomb.
Whereas Raimondo fought to overhaul Rhode Island’s worst-offending pension plans, Massachusetts has been a serial can-kicker. In 2011, Gov. Deval Patrick, Senate President Therese Murray and House Speaker Robert DeLeo were quick to dole out the back slaps after amending the state pension system’s funding schedule and benefits for newly hired employees. The moves, they said, would lower the state’s annual pension payments by a cumulative $5 billion through 2040.
What they didn’t mention is that, by extending the system’s payoff period by 10 years, they were baking in an additional $26.4 billion in costs for the state, according to an analysis by The Pioneer Institute. Welcome to the Bluto Blutarsky School of Pension Math.
I asked Baker and Coakley to reflect on Raimondo’s approach and whether it jives with their own pension policies. Their responses? Egh.
The Coakley camp “applauds” Patrick’s efforts to address the state’s retiree obligations, and used all sorts of buzz words and nuance to make clear that she is no Gina the Reformer. When politicians couch pension reform with terms such as “we need to take a serious look” and “additional reforms for new workers,” you can bet they are peddling yesterday’s meatloaf as today’s sloppy Joe.
As for Baker, well, his response was at once promising and disappointing. While he hit all the right talking points — better funding ratios, smarter investment strategies, an end to kicking “the can down the road” — Baker’s blueprint to tackle those problems is both vague and short on specifics. He even suggested more local aid could help address the equally frightening pension crisis affecting Massachusetts towns and cities. Come on Charlie, you’re better than that.
Or maybe not. If candidates are unwilling to take a tough stance on the fiscal straits facing Massachusetts today, when will they?
Massachusetts’ pension systems were 61 percent funded in 2013, collectively.