• Rutherford: pension reform should have been part of tax package

    by  • January 15, 2013 • News

    State lawmakers should have enacted pension restructuring at the same time they raised the income tax, according to the state treasurer.

    Treasurer Dan Rutherford says the tax increase of two years ago gave the state breathing room on the pension issue, which is why pensions remain unresolved.

    The pension problem is an unfunded liability of $95 billion, largely because the state for decades failed to make its full employer contribution, if any contribution at all. Consequently, the state must commit billions more to pensions now than in past years, unless it can find a way to reduce future benefits. Those efforts have so far produced no resolution in Springfield.

    Rutherford says a pension solution should have been negotiated as part of a tax increase package. The tax increase is hitting taxpayers now. They were shielded for two years by a temporary Social Security tax cut which has now expired.