Wolfeboro Tax Rate

[mcdude]

Originally Posted by Lakeboater

Not just teachers put in 9% plus 2%...cops, fireman, DPW. That's where the 104 number you referenced comes from. The teachers system is the largest due to the fact that in most communities the school system has the most employees and biggest department budget. The way you wrote your statement made it seem like just the teachers had those contributions.

Thanks Lakeboater. Good to know. I was not aware of how it worked for other municipal workers. I'm always amazed at how many people think we are getting some kind of a free hand-out.

[Major]

Originally Posted by mcdude

Thanks Lakeboater. Good to know. I was not aware of how it worked for other municipal workers. I'm always amazed at how many people think we are getting some kind of a free hand-out.

It's not free, but it's certainly subsidized. New Hampshire's retirement system is less generous than Massachusett's retirement system, which in turn is less generous than Rhode Island's retirement system. In all fairness, I don't know much about NH's and Mass's retirement systems, but I know a lot about Rhode Island's, since my wife was part of the system. I don't think the concepts are too disparate though.

Since Forum members like facts, I'll give you an example. My mother-in-law retired from Rhode Island in 1999 at the age of 54. Her pension is approximately $70,000. Since retirement, she has collected $1,250,000+. If she lives until age 85, she will collect a total of $2,500,000. How much did she contribute to her pension? $90,000! The state contributed another $90,000. So for a grand total of $180,000, and a personal contribution of $90,000, my mother-in-law gets a lifetime salary of $70,000. Not a bad deal! All of this information is online and verifiable.

I do not fault her for this. It was the deal she made and we should abide by it. However, the math doesn't work. Pensions are not sustainable. That is why the dreaded private sector moved away from pensions 30+ years ago. Pensions may have made sense when public sector workers made less than private sector workers, but that has changed.

As stated above, NH and Mass aren't as generous as RI, but I am certain that taxpayers subsidize pensions. We should get out of the pension business and move toward individual retirement accounts.

[Biggd]

Originally Posted by Major

It's not free, but it's certainly subsidized. New Hampshire's retirement system is less generous than Massachusett's retirement system, which in turn is less generous than Rhode Island's retirement system. In all fairness, I don't know much about NH's and Mass's retirement systems, but I know a lot about Rhode Island's, since my wife was part of the system. I don't think the concepts are too disparate though.

Since Forum members like facts, I'll give you an example. My mother-in-law retired from Rhode Island in 1999 at the age of 54. Her pension is approximately $70,000. Since retirement, she has collected $1,250,000+. If she lives until age 85, she will collect a total of $2,500,000. How much did she contribute to her pension? $90,000! The state contributed another $90,000. So for a grand total of $180,000, and a personal contribution of $90,000, my mother-in-law gets a lifetime salary of $70,000. Not a bad deal! All of this information is online and verifiable.

I do not fault her for this. It was the deal she made and we should abide by it. However, the math doesn't work. Pensions are not sustainable. That is why the dreaded private sector moved away from pensions 30+ years ago. Pensions may have made sense when public sector workers made less than private sector workers, but that has changed.

As stated above, NH and Mass aren't as generous as RI, but I am certain that taxpayers subsidize pensions. We should get out of the pension business and move toward individual retirement accounts.

Generally when you take a state or city job you make less money than the private sector so you give up the "pay me now" for the "pay me later". In the case of your mother in law, she's getting the pay me later. Good for her!

In my younger days I had the chance to take a government job at $11.00 an hour and working the night shift as opposed to the private sector where I made $16.00 an hour working normal day time hours. I choose the private sector because I was a hard worker and I knew I would make a lot more money for my family at that moment.

[Major]

Originally Posted by Biggd

Generally when you take a state or city job you make less money than the private sector so you give up the "pay me now" for the "pay me later". In the case of your mother in law, she's getting the pay me later. Good for her!

In my younger days I had the chance to take a government job at $11.00 an hour and working the night shift as opposed to the private sector where I made $16.00 an hour working normal day time hours. I choose the private sector because I was a hard worker and I knew I would make a lot more money for my family at that moment.

I don't think that's the case now. With benefits, I think a person makes as much in the public sector as in the private sector. However, this may be skewed since in the Washington DC area, public sector employees make more than private sector employees, and since so many people work in Washington, this may effect the overall numbers. I'm sure studies have been done proving both sides!

[Biggd]

Originally Posted by Major

I don't think that's the case now. With benefits, I think a person makes as much in the public sector as in the private sector. However, this may be skewed since in the Washington DC area, public sector employees make more than private sector employees, and since so many people work in Washington, this may effect the overall numbers. I'm sure studies have been done proving both sides!

It is still that way in many departments of the government. I have a customer of mine that's been coming to me for almost 30 years. He works for the department of environmental protection. He just transferred to the Midwest because he could no longer afford to live in New England.
He told me he should have gone to the private sector years ago but he feels stuck now because he's close to getting his full pension so he has to continue with them. He has struggled to pay his bills for the past 30 year I've known him. I always gave him credit because he was good for it.

[tis]

Originally Posted by Major

I don't think that's the case now. With benefits, I think a person makes as much in the public sector as in the private sector. However, this may be skewed since in the Washington DC area, public sector employees make more than private sector employees, and since so many people work in Washington, this may effect the overall numbers. I'm sure studies have been done proving both sides!

I agree with you. The private sector cannot afford to compete with the government's generous wages and benefits any more.

[8gv]

Since we have drifted into a discussion of government pensions...

Each state has a statistic called “unfunded pension obligations”.

Simply put, this number represents what is promised to retired state employees but is not in the state’s hands.

The numbers are very low with many states below 50% and others below 40%.

States cannot print money like the federal government can.

The only way to meet these obligations is to increase revenue.

That often means higher state income taxes.

The problem with that is income portability.

Many high income tax payers can choose to relocate to states with lower taxes.

When the exodus begins the tax payers who remain will need to pay more.

Citizens who pay little or no taxes and receivers of other state support, stay in their state.

The result is an acceleration of the problem until critical mass occurs.

Watch CT over the next decade.

[Bigstan]

Originally Posted by 8gv

Since we have drifted into a discussion of government pensions...

Each state has a statistic called “unfunded pension obligations”.

Simply put, this number represents what is promised to retired state employees but is not in the state’s hands.

The numbers are very low with many states below 50% and others below 40%.

States cannot print money like the federal government can.

The only way to meet these obligations is to increase revenue.

That often means higher state income taxes.

The problem with that is income portability.

Many high income tax payers can choose to relocate to states with lower taxes.

When the exodus begins the tax payers who remain will need to pay more.

Citizens who pay little or no taxes and receivers of other state support, stay in their state.

The result is an acceleration of the problem until critical mass occurs.

Watch CT over the next decade.

It's the next Detroit. Which is to say bankrupt and with pensions to be worth fractions of what they once were.

Pension plans will fail for the same reason as SS will eventually - when you live 30-40+ years collecting on a plan that was designed to kick in a couple years before your estimated death the system breaks.

Anyone can look up the unfunded liability on their plan, and it's overall breakdown - 80% of the MA teachers plan goes to service debt. They should all beg to be on 401k type plans, as teachers who quit in under 10 years lose all contributions, and as the avg teacher doesn't last ten years they plan gets all those contributions free (yes, been there, done that). Unless things changed MA teachers dont even get SS benefits. They should want to trade a pension in for a standard retirement plan and SS benefits / Medicare/Caid.

[Lakeboater]

Originally Posted by Major

It's not free, but it's certainly subsidized. New Hampshire's retirement system is less generous than Massachusett's retirement system, which in turn is less generous than Rhode Island's retirement system. In all fairness, I don't know much about NH's and Mass's retirement systems, but I know a lot about Rhode Island's, since my wife was part of the system. I don't think the concepts are too disparate though.

Since Forum members like facts, I'll give you an example. My mother-in-law retired from Rhode Island in 1999 at the age of 54. Her pension is approximately $70,000. Since retirement, she has collected $1,250,000+. If she lives until age 85, she will collect a total of $2,500,000. How much did she contribute to her pension? $90,000! The state contributed another $90,000. So for a grand total of $180,000, and a personal contribution of $90,000, my mother-in-law gets a lifetime salary of $70,000. Not a bad deal! All of this information is online and verifiable.

I do not fault her for this. It was the deal she made and we should abide by it. However, the math doesn't work. Pensions are not sustainable. That is why the dreaded private sector moved away from pensions 30+ years ago. Pensions may have made sense when public sector workers made less than private sector workers, but that has changed.

As stated above, NH and Mass aren't as generous as RI, but I am certain that taxpayers subsidize pensions. We should get out of the pension business and move toward individual retirement accounts.

What makes you say that the NH retirement system is less generous that the MA system? Pretty sure, from talking to both, you have that backwards. I used to think the same thing.

[Major]

Originally Posted by Lakeboater

What makes you say that the NH retirement system is less generous that the MA system? Pretty sure, from talking to both, you have that backwards. I used to think the same thing.

My teacher family and friends who teach in NH seem to have to work longer for less of a pension than family and friends who work as teachers in Mass and RI. I know RI is extremely generous, you can retire at 60% after 28 years (prior to pension reform). My father-in-law retired after 35 years from Mass and collects about $35,000 per year. In talking to NH teachers, their pay is less than Mass and RI, so as a result the pensions are lower.

[FlyingScot]

Originally Posted by Major

My teacher family and friends who teach in NH seem to have to work longer for less of a pension than family and friends who work as teachers in Mass and RI. I know RI is extremely generous, you can retire at 60% after 28 years (prior to pension reform). My father-in-law retired after 35 years from Mass and collects about $35,000 per year. In talking to NH teachers, their pay is less than Mass and RI, so as a result the pensions are lower.

I think your teacher example argues against your earlier point that the public sector pays more than the private sector, even after adjusting for Summer break, etc. When I compare good teachers I know to similarly skilled people in business, the business people always seem to earn more.

The pensions go a long way toward making up for this. If we pull them out or downgrade them to IRAs, the teachers will need to find some other way to funding their retirement. Perhaps by quitting their teaching jobs and leaving us with much less skilled teachers.

That's not to say they aren't expensive or that there aren't some formulas that are wrong. Just that there are HUGE impacts to dramatically lowering the compensation of an important group of people.

[8gv]

Since state employees are a large voting block, it is tempting for politicians to promise better pensions.

The problem is that a future set of tax payers will get the burden of paying for it.

For this reason, I would prefer a more direct, pay as you go approach to retirement benefits.

Retirement contributions made to the employee's own account each pay period that can't be diverted for other use by politicians seems more sensible.