Inflation and theory;

What is the average rate of inflation per year in the US?

As we saw the Average annual inflation rate is 3.22%. That doesn't sound too bad until we realize that at that rate prices will double every 20 years. That means that every two bars on average prices have doubled or about 5 doublings since they began keeping records.Apr 1, 2014

By Shira Schoenberg | sschoenberg@repub.com 
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on October 31, 2013 at 2:09 PM, updated October 31, 2013 at 2:13 PM

BOSTON — Hundreds of people, many of them union members, turned out at the State House on Thursday to oppose a bill that would save the state and municipalities a significant amount of money by cutting retiree health benefits for public employees.

Democratic Gov. Deval Patrick has proposed the bill as a way to address the approximately $46 billion unfunded liability for retiree health benefits faced by state and municipal governments. “Modifications to retiree health care coverage are essential to keep the system sustainable for future state and municipal career employees and to maintain core government services for future generations,” said Secretary of Administration and Finance Glen Shor.

However, public employees say the government is breaking a promise that was made when they were hired. Gail Gunn works in information services for UMass Amherst. She is 51 years old, blind and has worked for the state for 16 years. She planned to retire in five or six years, but will reconsider if the bill is passed, since the change would increase her monthly health insurance payments by $500 a month. “I’m not going to stand up and say it’s not fair. As a blind person, I’m used to life not being fair,” Gunn said. “It’s just wrong. I expect more from government.”

House Bill 59 is being considered by the Joint Committee on Public Service, which held Thursday’s public hearing.

According to the Massachusetts Taxpayers Foundation, the current unfunded liability for retiree health benefits is $30 billion for cities and towns and $16 billion for the state. The bill was crafted based on recommendations from a committee tasked with studying the issue. According to Shor, the reforms could save state and local governments $1 billion over 10 years and up to $20 billion over the next 30 years. (The savings increase in later years because the changes would not apply to current retirees and some of those nearing retirement.)

The bill would increase the minimum years of service an employee must work to be eligible for retiree health benefits from 10 years to 20 years. It would increase the minimum age for eligibility by five years, to 60 for general employees, 55 for employees with hazardous occupations and 50 for public safety officials. The bill would also pro-rate benefits on a scale ranging from government paying 50 percent of health insurance premiums after 20 years of service to government paying 80 percent of premiums after 30 years of service. Currently, the state pays 80 to 90 percent of premiums, and municipalities pay between 50 and 100 percent.

If the state breaks this promise, they'll break any promise.
- Wesley Blixt, union co-chair

Shor said maintaining the current system “is neither fiscally sustainable nor likely to engender ongoing taxpayer support.”

Supporters of the bill argue that these provisions are more generous than the plans offered in the private sector and in many other states. Shor said the plans of 18 other states require a higher minimum age or more years of service.

Geoffrey Beckwith, executive director of the Massachusetts Municipal Association, said in his prepared testimony that only 8 percent of Massachusetts taxpayers who work in the private sector receive any type of retiree health insurance benefit. “It is unreasonable to expect that voters will agree to pay higher taxes to fund a benefit that is unavailable to the overwhelming majority of citizens,” Beckwith said.

Both the Massachusetts Municipal Association, which represents city and town governments, and the Massachusetts Taxpayers Foundation argue that the bill should go even further in cutting retiree health costs. Michael Widmer, president of the Massachusetts Taxpayers Foundation, said cities and towns paid $800 million in 2012 for health care benefits for retirees, and that cost is expected to rise to $1.5 billion in 10 years. “Without much stronger reforms, retiree health care costs will be a growing burden on local budgets for years to come, continuing to siphon resources away from important public services such as education, public safety and transportation,” Widmer said.

By Evan Horowitz GLOBE STAFF  AUGUST 08, 2017

Massachusetts has made some expensive promises over the years. Chief among them, a commitment to provide retirement pensions for teachers, State Police, and other public workers.

As of now, we don’t have enough money to cover all these pension promises. Every dollar we owe is backed by roughly 60 cents of assets. That’s not terrible — some states are in far worse shape— but it’s not sustainable either.

To ensure that we fill our pension coffers by 2040, the state has embraced an actuarially sound plan, built on a mix of investment strategies, increased contributions, and regular adjustments.

Which is good, except for one thing. It’s not clear how long we’ll be able to follow that plan.

Here’s one problem: There’s no free lunch when it comes to pensions. For the state to meet its long-term obligations, lawmakers have to set aside more money. Every year, in every budget, until we’ve made up the funding gap.

Officially at least, they’ve committed to doing so. But their whole approach is back-loaded, so that the really big contributions are put off for another day. This fiscal year, the state set aside $2.4 billion for pension contributions, which is already 6 percent of total state spending. In 2027, they’re expected to allocate $5.2 billion; by 2036, it’s $11.2 billion.

Even adjusting for inflation — and the fact that Massachusetts will probably be a lot richer in 2036 than it is today — that’s still a massive increase. And it means that when today’s college students become our future representatives, pension contributions could be siphoning tax dollars away from things like schools or health care.

And that’s if the money we put aside continues to earn decent investment returns. Otherwise, even these fast-growing and budget-squeezing state contributions won’t be enough.

The magic number holding everything together in our current pension funding plan is 7.5 percent. That’s the annual rate of return we’re expecting to get on our savings.

It’s not an unreasonable assumption; in fact, state pension investments have done better than that on average since the mid-1980s. But there’s no guarantee we can hit 7.5 percent on a consistent basis. And if investments fall short, we’d need even bigger contributions from taxpayers.

Note, too, that all this is just for state-run pensions. Lots of cities and towns run their own plans for municipal workers, some of them in worse shape than others. Also, there is the MBTA, which has roughly $1 billion in uncovered pension obligations and doesn’t participate in the state system.

But despite all these issues, there is one big reason not to get too worked up about the exact size of our unfunded pension liabilities. A lot of this is really just guesswork.

Which is not a critique of the folks who oversee the Commonwealth’s pension systems. No doubt they do their scrupulous best using the most reliable information available.

 By Evan Horowitz GLOBE STAFF  AUGUST 08, 2017

Massachusetts has made some expensive promises over the years. Chief among them, a commitment to provide retirement pensions for teachers, State Police, and other public workers.

As of now, we don’t have enough money to cover all these pension promises. Every dollar we owe is backed by roughly 60 cents of assets. That’s not terrible — some states are in far worse shape— but it’s not sustainable either.

To ensure that we fill our pension coffers by 2040, the state has embraced an actuarially sound plan, built on a mix of investment strategies, increased contributions, and regular adjustments.

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Which is good, except for one thing. It’s not clear how long we’ll be able to follow that plan.

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Here’s one problem: There’s no free lunch when it comes to pensions. For the state to meet its long-term obligations, lawmakers have to set aside more money. Every year, in every budget, until we’ve made up the funding gap.

Officially at least, they’ve committed to doing so. But their whole approach is back-loaded, so that the really big contributions are put off for another day. This fiscal year, the state set aside $2.4 billion for pension contributions, which is already 6 percent of total state spending. In 2027, they’re expected to allocate $5.2 billion; by 2036, it’s $11.2 billion.

Even adjusting for inflation — and the fact that Massachusetts will probably be a lot richer in 2036 than it is today — that’s still a massive increase. And it means that when today’s college students become our future representatives, pension contributions could be siphoning tax dollars away from things like schools or health care.

And that’s if the money we put aside continues to earn decent investment returns. Otherwise, even these fast-growing and budget-squeezing state contributions won’t be enough.

ADVERTISEMENT

The magic number holding everything together in our current pension funding plan is 7.5 percent. That’s the annual rate of return we’re expecting to get on our savings.

It’s not an unreasonable assumption; in fact, state pension investments have done better than that on average since the mid-1980s. But there’s no guarantee we can hit 7.5 percent on a consistent basis. And if investments fall short, we’d need even bigger contributions from taxpayers.

Note, too, that all this is just for state-run pensions. Lots of cities and towns run their own plans for municipal workers, some of them in worse shape than others. Also, there is the MBTA, which has roughly $1 billion in uncovered pension obligations and doesn’t participate in the state system.

But despite all these issues, there is one big reason not to get too worked up about the exact size of our unfunded pension liabilities. A lot of this is really just guesswork.

Which is not a critique of the folks who oversee the Commonwealth’s pension systems. No doubt they do their scrupulous best using the most reliable information available.

ADVERTISEMENT

But there’s much about the 2030s (and beyond) that we just can’t know. Like, how long people will live, how the stock market will perform, or how deep the next recession will be. Sure, we can look to the past for guidance, but that only gets you so far.

What if we’re at the cusp of a breakthrough cancer treatment. That would be great for humanity but terrible for pension plans, because it could keep retirees alive a lot longer.

Or consider something more humdrum: inflation. Right now, there’s a battle in economics over whether the Federal Reserve should maintain its 2 percent inflation target or aim for something closer to 4 percent.

If the 4 percenters win the day, it would dramatically reduce the cost of state pension obligations — albeit by leaving recipients with less-valuable checks (since state pensions aren’t fully adjusted for inflation.)

Of course, just because forecasting is hard doesn’t mean we should ignore our state’s pension funding shortfall. Under nearly any scenario, additional money will be needed if Massachusetts is to fulfill its promises.

But given the uncertainty, perhaps it makes sense to focus less on the accounting details and more on the institutions and processes designed to keep us on track — like PERAC, which monitors the health of public pension systems around the state, and the state law requiring our government to reassess needs every three years.

For now, these sorts of arrangements seem to be working. Finance experts are developing detailed assessments, and lawmakers are heeding their conclusions. But the real test will come in the years ahead, when required contributions rise and cloudier economic times make it tempting to divert that money for more urgent needs.

Evan Horowitz digs through data to find information that illuminates the policy issues facing Massachusetts and the United States. He can be reached at evan.horowitz@globe.com. Follow him on Twitter @GlobeHorowitz.

Sorry, not only in Templeton.

From the Town of Franklin - Capital Planning

Community Profile:
● No Capital Committee
● Finance Committee, advisory only
● Capital Sub-Committee of the Town Council members (4 of 9 members)
● Capital Improvement Plan includes Town & School

Capital Program Policy:
● 100% of Free Cash, Overlay Surplus is used for capital purchases or small, one-time purchases.
● A five-year Capital Improvement Plan (CIP) plan is required annually and shall be maintained and updated.
● Department Heads are required to budget operating costs associated with CIP projects.


Capital Program Policy:
● Delaying maintenance on existing assets results in higher costs in future years. Postponing improvements to buildings/ infrastructure results in higher costs.
● Bonds will be used for large capital projects (over $1,000,000)
● Stabilization accounts for Fields, Fire Trucks/ Ambulance, Facilities
● 10% of Free Cash toward OPEB Trust Fund

So, 100% used for capital purchases, but use 10% for OPEB; must be the new math!

It just may be this is one of the things that make some taxpayers go - WTF????

Massachusetts General Law chapter 43A

Section 7: Action on articles in warrant for town meeting

Section 7. The articles in the warrant for every town meeting, so far as they relate to the election of the moderator, town officers and town meeting members, and as herein provided, to referenda, and all matters to be acted upon and determined by ballot, shall be so acted upon and determined by the registered voters of the town in their respective precincts. All other articles in the warrant for any town meeting shall be acted upon and determined exclusively by town meeting members at a meeting to be held at such time and place as shall be set forth by the selectmen in the warrant for the meeting, subject to the referendum provided for by section ten.

Section 8: Moderator; tenure; duties; vacancies

Section 8. A moderator shall be elected by ballot at the annual town meeting when his term of office expires, for the term of one or three years, and shall serve as moderator of all town meetings, except as otherwise provided by law, until a successor is elected and qualified. Nominations for and election of a moderator shall be as in the case of other elective town officers, and any vacancy in the office may be filled by the town meeting members at a meeting held for that purpose. If a moderator is absent, a moderator pro tempore may be elected by the town meeting members.

Time for a change . . . . and a real step forward for Templeton.

I think if there is one thing to wish for in the coming new year, it is a change, more people at Town Meeting and more than a simple yes or no recommendation from the finance (Advisory) committee. Perhaps this is the year where that committee can/will really "bring it".

Bring things like a real report with real explanations for it's recommendations.
Explanations from the "minority report" as to why any members who vote or recommend against an article. Time to perhaps change it up and for some of this to happen, the moderator is going to have to allow these explanations to happen . . . the residents/voters/taxpayers deserve it. When the Advisory Committee states it wants or needs to explain a recommendation, the moderator needs to let this happen. What would be a reason to deprive the people at Town Meeting of this information or explanation? It should not be politics nor jockeying from say the selectmen or Town Administrator.

I hope the New Year brings a well attended and informed Town Meeting with real explanations with regards to any recommendations for / against/ or no action. My hope for the New Year is there will be no more selectmen (individually or collectively) attempts to stifle discussion on any article presented to Templeton's Town Meeting. Let discussion happen and let true democracy take place.

This might be a pretty large wish for the New Year but you either "go big or stay home." As the British SAS say, "who dares wins."

Happy New Year to all.

Hope everyone is paying attention; on Beacon Hill, the state politicians are looking to make some moves with regards to alcohol sales and taxes. Increase taxes and use that money for more alcohol enforcement people - as in grow the government, which will cost more than the taxes collected, so New Hampshire, here I come.

Happy New Year!

Some places where your tax dollars go



Please use this rate for your mileage reimbursements in your budget you
submit.

Beginning on Jan. 1, 2018, the standard mileage rates for the use of a car
(also vans, pickups or panel trucks) will be:

* 54.5 cents for every mile of business travel driven, up 1 cent from
the rate for 2017.

Kelli Pontbriand
Accountant
Town of Templeton
978-894-2765