County Update: Pension Liability Unresolved

JULY 1999 - Plymouth And Bristol Counties Not Abolished In Budget - Governor
Cellucci's budget proposal to eliminate Plymouth and Bristol Counties,
as of July 1, 2000, (March Voice) does not appear in the budget passed
by the Legislature. Neither the House or Senate included the proposal
in their budget versions.

"We
thought the elimination of Plymouth/Bristol Counties was unnecessary
when it was proposed," recalls Legislative Liaison Shawn Duhamel.
"Obviously the State House agreed since the two counties continue to
operate under this budget."

Policy Differences Remain

While
Plymouth and Bristol are untouched for now, six other counties have
been (or will be) eliminated. As we have been reporting, they include
Middlesex, Worcester, Hampden and Hampshire, whose county government
has been dissolved, as well as Essex, slated for this month, and
Berkshire, whose termination date is one year from now (July 1, 2000).

While
the retirement systems for the 5 dissolved counties continue to
operate, fundamental issues continue unanswered at least for now. While
there appears to be some consensus among the leadership as to the
general make-up and operation of the affected retirement boards,
serious policy differences remain over whether the state, the
communities within the dissolved counties, or both, would be
responsible for the unfunded pension liabilities of the employees
transferred to the state.

When the
House passed its version of the budget, it included an amendment
offered by the Speaker Thomas Finneran and House Ways and Means Vice
Chairman Harriett Stanley, relating to the abolished (or to be
abolished) counties. This amendment would allow the state, through a
complicated formula, to assess against the communities in an abolished
county, a portion, if any, of the unfunded pension liabilities
associated with transferred employees. As has been the history on this
issue, the Senate appears to be taking a different tack. When it
released its version of the budget, the Senate Ways and Means Committee
did not include the House budget amendment.

Instead,
just before the Senate budget debate began, the committee released its
own bill on abolished counties (S-1888), which was passed the same day.
Contrary to the House amendment, S-1888 does not allow the state to
assess any charge back to the communities, within an abolished county,
a portion of the unfunded liabilities for transferred employees.

As
we go to press, the Senate and House conferees are meeting and deciding
whether to include the House amendment in the budget or proceed with a
bill, like S-1888, through the regular legislative process.

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