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Retirement subsidies: House makes tough choice

February 11. 2018 11:56PM

Last week, the New Hampshire House made a number of bad decisions. It passed a family leave plan that can’t pay for itself. It approved a new tax on New Hampshire drivers without even knowing how much it will cost. But it made the right choice on restoring subsidies for municipal employees, by a single vote.

For years, the state picked up a large share of the local employer contribution to the New Hampshire Retirement System. This was originally an incentive to get towns to join the NHRS but became a state subsidy for local employees.

Faced with a massive budget deficit of his own making, Gov. John Lynch pushed the Legislature to reduce the state share from 35 percent to 25 percent. The next Legislature eliminated the subsidy entirely.

If towns want to hire another teacher, police officer, or firefighter, local taxpayers should pick up the tab, including the cost of the retirement program. If they don’t, they will hire more local workers than they can afford. They end up paying the difference in state taxes. Underwriting local decisions with state dollars was always a bad idea.

Local officials want to restore the subsidies, and have their share of lawmakers in Concord willing to do so. The House last week narrowly declined to reconsider a bill restoring state contributions for local retirement benefits, 171-170.

Saying no to your constituents is always a tough decision. Sometimes, doing the right thing comes down to a single vote.

State Government Editorial

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