Hartford’s city council this week became the latest in a growing line of governing bodies to address a fiscal elephant in the room. As the Hartford Courant said today, “The council approved a series of proposals … designed to save the city money by changing its pensions and benefits system.”
Public employee benefits are a huge issue in cities and states across the country because many governing bodies, over the years, have promised way more than their taxpayers can deliver.
Just last week, the Illinois legislature approved reforms designed to save the state’s worst-in-the-nation pension system.
This summer, Chicago Mayor Rahm Emanuel (D) said, “The longer we delay bringing comprehensive changes to Chicago’s pension system, the more likely the markets will punish our inaction. The longer we wait, the higher the price we pay.”
So it’s not surprising, nor is it a bad thing, that Hartford is now following suit in making some changes.
And at the State Capitol, Connecticut state lawmakers should take note: pension and benefit reform is a bipartisan issue. Reuters said Illinois’s reform bill was “championed by Democratic and Republican legislative leaders” alike.
What blue cities and states (like Connecticut) are realizing they have to do is simply reflect common sense. Accumulated debt to pay public employee benefits has skyrocketed beyond the ability to pay them.
And one reason for that is public employee benefits are often far better than those found in the private sector.
Among Hartford’s reforms, says the Courant, those hired by the city after July 1, 2013, will “no longer able to qualify for the EMBERS program, which allowed certain workers to get free lifetime health care.”
Of course, eligibility for the free health care had some strings attached, such as, being available after the employee served 10 years with the city, and at least five of those “in a qualifying position,” according to the Courant.
But just the concept of free healthcare for life is nearly unimaginable to most of Connecticut’s residents working in the private sector.
Fiscal responsibility and long-term liabilities are critical factors in many state rankings of economic competitiveness and business climates.
Connecticut has started down the road on state employee retirement reform, but more needs to be done.