Myers says Supreme Court decision on retirement system pass down costs won't effect local tax burdens any further

LACONIA — City Manager Scott Myers said yesterday that the decision by the New Hampshire Supreme Court upholding legislation that first reduced and then eliminated the state's share of the employer contribution to the New Hampshire Retirement System for municipal and school district employees would have no further impact on the municipal budget.

Myers said that the state reduced its contribution from 35-percent to 30-percent in 2009 and from 30-percent to 25-percent in 2010 and then eliminated it altogether. Both the city and the school district incorporated the increased cost of employer retirement contributions in their budgets, budgeting to pay the entire employer contribution beginning on July 1, 2011. The only future effect, he said, would be the annual increase in the employer contribution.

Myers said that the Board of Trustees of the New Hampshire Retirement System typically sets the rates for the next fiscal year, which begins in July, in September or October.

The City of Concord, along with Belknap County and the Mascenic Regional School District, brought suit against the state claiming that the legislation violated the constitutional prohibition against unfunded mandates. Part 1, Article 28-a of the Constitution stipulates that the state "shall not mandate or assign any new, expanded or modified programs or responsibilities to any political subdivision in such a way as to necessitate additional local expenditures by the political subdivision unless such programs are fully funded by the state."

Although the justices acknowledged the increase in local expenditures, they held that an increase, in and of itself, did not amount to an expanded responsibility, which would require "some substantive change to an underlying function, duty or activity performed or to be performed by local government."

The increased contribution paid by municipalities, counties and school districts is estimated to have raised local expenditures by $9-million in 2010, $18-million in in 2011 and $59-million in 2012, all of it funded by property taxes.