Article 5: Employee Retention Plan

By S.D. Plissken | March 1, 2021

Back in 1967, the NH State Legislature undertook to pay 45% of the pension costs of  city and town employees. After about a decade, they dropped their contribution down to 35%.

It is no great secret that “You get more of what you subsidize and less of what you tax.” The cities and towns hired more employees, paid them more, and pensioned them at higher levels, then they had ever been able before. One might say that – flush with state subsidies – they took on more, much more, than was traditional, more than was strictly necessary, and certainly more than was fiscally prudent or sustainable. 

About eleven years ago, the NH Legislature ceased paying their 35% subsidy. They just did not have the money to keep it going. Their stated legislative intent at the time was that the cities and towns should cut back also.

Many – including Milton – did not choose to “rein in” their spending and instead increased property taxes. They have by now increased them far beyond our ability to pay. The spenders have been enabled by Federal inflation of the money supply, which drives up valuations of the properties taxed, although the incomes of the taxpayers have lagged behind. (Inflation benefits most those closest to its source). The increasing gap between the inflated valuations and incomes has become unsustainable, especially for those starting out in life (“Why, oh why, are the young people leaving?”) and for those at the other end of life who are living on fixed incomes.

Article 5: Employee Retention Plan. To see if the Town will vote to adopt the Employee Retention Plan, which establishes a Grade and Step Plan for classes of employees of the Town of Milton. If approved, any scheduled increases, as laid out in the Plan and approved by the Board of Selectmen, will be incorporated into the operating and default budgets in subsequent years starting with 2022. No funds shall be raised in 2021. (Majority Vote Required).

Recommended by the Board of Selectmen (3,0,0). Recommended by the Budget Committee (7,1,0).

It was explained at the Deliberative Session that the “Plan” would be updated at five-year intervals. That means two selectmen in the rotation could spend their entire three-year term, and the third one most of their three-year term, without ever actually having to vote on this. Future boards can be “dumbfounded” that salary and pension expenses keep rising and that those rising costs have crowded out other expenditures. Increases would be out of their hands, they would be unaccountable. That is, even more so than now.

It was an especially sardonic touch that this measure is entitled the “Employee Retention Plan.” Town officials have been bleating for years about their desperate employee retention measures. (The Police Department retention bonus scheme of several years ago would seem to have been only partially effective).

Labor is a commodity too. Right now, with government-induced Covid unemployment running 10% (at least), wages are falling. When and how did ignoring market prices in favor of “retention” ever become our top priority? No one voted for that.

The Town does not seem to understand the simple fact that Milton is (and always has been) a “starter” town, which is unable to outbid larger and better appointed places. It is monumental folly to even attempt to do so.

Even those larger entities have reached the end of their tether and will not be able to go much further. Some pushed hard – one might even say desperately – for a NH House bill (HB274), which sought to reanimate the corpse of state pension subsidies (at the 5% level) for cities and towns. (Who is dim enough to suppose it would ever stop at 5%?) That attempt failed last week in a 189-168 vote. The coffin lid was nailed down hard with a reconsideration vote. As they say, “that dog won’t hunt.”

Basically, this warrant article is a misguided attempt to place pay and pension increases first in future budgets – “all other priorities are rescinded” – and to do so with precious little accountability. (It would in that sense be a suitable sibling to the Capital Improvement Program (CIP) plan, which has for some years placed other expenditures on their own upward conveyer belt).

Just say “No.” (And perhaps – depending upon their rationale – give a tip o’ the hat to the lone member of the Budget Committee that voted not to recommend this monstrosity).


When you ask them, “How much should we give?” Ooh, they only answer, “More! more! more!” – CCR


References:

NH General Court. (2021). HB274-FN-L: Relative to Payment by the State of a Portion of Retirement System Contributions of Political Subdivision Employers. Retrieved from gencourt.state.nh.us/bill_status/Results.aspx?q=1&txtbillnumber=hb274&txtsessionyear=2021

Author: S.D. Plissken

I thought he'd be taller.

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