John Marshall Lee, a Black Rock resident who organized a financial watchdog group to examine the finer points of the Bridgeport city budget, takes issue with the Connecticut Post Editorial Board’s support of Mayor Bill Finch’s decision to defer millions in pension payments for some uniformed retirees in favor of a long-term plan. See the Post’s editorial position http://www.ctpost.com/news/article/Taking-steps-on-city-pensions-1408683.phpm
The mayor says he’s offering a long-term solution without raising taxes in an election year. Lee takes Connecticut Post news managers to task for not covering legislative budget sessions regularly, turning a blind eye to Finch administration spending and ignoring a review of city finances by the organization Institute for Truth In Accounting http://www.truthinaccounting.org/news/listing_article.asp?section=451§ion2=451&CatID=5&ArticleSource=964
CT Post as Financial Advisor to Bridgeport: Up with Finch or Line the Bird Cage?
The CT Post in an editorial today writes in favor of Mayor Finch’s second attempt in his four year term to avoid following actuarial advice on funding Pension Plan A. (It is curious that no one notices that Pension Plan B Fire and Pension Plan B Police seem to have been regularly funded as professionally directed. The City contributes, the workers do also, and the investment committees have successfully maintained their investment positions it seems and have achieved reasonable levels of funding.)
So why is there such attention to the problem of funding Plan A? It is because more than 95% of the folks who are rightfully entitled to draw pensions are drawing them already at a rate of $30-32 Million per year, and Plan A investments available to pay that may last only 5-6 years, then nothing but general tax revenues are available. That’s a “train wreck”, from a financial perspective! Finch, putting in $6 Million or 4 Million annually for the three years of his term, but ignoring Segal & Co advice to fund to a “minimum level”, has avoided a budget increase of $8-10 Million per year the last three years. Putting those funds in could have caused those responsible to tighten other parts of City budgets and put off the coming “train wreck” without a tax increase. Instead the Mayor has dithered, if you read his planning documents submitted to the State Treasurer and Director of Office of Policy and Management in 2010 and 2011.
And some readers seem to be encouraging the Mayor’s “kick the can down the road” process. For those folks, when the Prichard AL day arrives in Bridgeport, (which Marian Gail Brown wrote about in the same Sunday Post), what will you be saying to retired folks in their 70’s and 80’s? Will you look for State of CT to bail Bridgeport out? Do you guess that there will be legal issues with millions of dollars in legal costs to be paid by Bridgeport? Perhaps interest due on amounts unpaid plus orders to pay the Court decisions? How many new businesses will look for economic development in Bridgeport? Do you think that we ought to shut down the Office of Economic Development in the City today because they will be spinning their wheels until the train wreck and no use afterwards for many years? If you have a house or business, what will you predict about its value while Bridgeport becomes a poster boy for yet another negative?
And I am disappointed in the CT Post for ignoring Budget and Appropriations sessions this year or to tell the people what is really going on. Perhaps they have cut so deeply in their own “for profit budget making and staffing” that what happens with Bridgeport can be at least adequately covered by talking to Mayor Finch only? Let’s see what the Institute for Truth in Accounting has to say about insufficient levels of funding this week on BridgeportNow. And maybe David Walker will have some enlightening words on the same subject next week that differ from the paper.
All actions have consequences and no readers who are advocating the Finch approach are looking beyond today. Why not? That is the role of good governance in any City, and in Bridgeport, CT where so many keep repeating is “the largest City in the State”, we are not getting good financial governance. Is Bridgeport “too big” too fail? I think not. There are no financial stewards!
And that is the reason our taxes continue to be as high as they are. Actually taxes would have been higher in the past 10 years, except the ‘Mario Machine elect’ have: consumed 80% of the $55 Million in the rainy day fund when the Financial Review Board left town, minimally funded Pension Plan A for years (while being willing to repay $350 Million borrowed for Plan A with 7.64% interest to the tune of $900 Million over 30 years-the Stafstrom Plan), and is also playing games with underfunding retiree healthcare to the tune of $20 Million debt each year for the last three years creating an additional future tax liability of $61 Million for taxpayers. Where is a Post inquiry into “internal service funds”?
What say you CT Post about this mess, today? Where are your wise words of overview and comprehensive advice? You are a profit making business in the private sector. Are you funding your pension obligations on a regular basis? If you encourage City behavior that brings a “train wreck” closer to today by your blessing, where will your moral standing be in covering the bad news and suffering five years from now that you encouraged?
John Marshall Lee, 30 Beacon Street, Bridgeport, CT 06605