That's how much each and every resident of Stamford would be required to pay to the city to fully fund our obligations toward retiree pension and healthcare benefits, according to a Manhattan Institute report on pension underfunding in the state of Connecticut and its major cities.
As explained previously, benefits for city employees are swallowing up increased tax revenues which could otherwise go to services residents desire. To take just one example, in 2008, the city had to pay $2.3 million to the police pension fund against $18.7 million in policemen salaries (12.3% of the total salary amount). In 2017, those numbers were $7.9 million and $22.3 million, respectively (35.4%) (see page 93 of Stamford's 2017 Comprehensive Annual Financial Report).
Health care benefits for retired Stamford employees--enumerated in the innocuous-sounding line item known as OPEB (Other Post-Employment Benefits)--totaled $26.6 million in 2017. This kind of benefit is provided at less than 10% of private firms in Connecticut, according to the report (at page 11). So why are we offering it to our city employees at all?
* * *
This weekend, I had lunch with an old law school friend I hadn't seen in some time, where I explained Team Stamford to her, and that my biggest concern about the city's finances is that we are paying excessive benefits to our city employees.
"But shouldn't we make sure city employees have enough money to retire on?" she asked.
Of course we should. But providing sufficient retirement benefits is not the purpose of hiring public employees. The purpose of hiring public employees is to provide the residents--the taxpayers--goods and services they desire to make Stamford a wonderful place to live in. Retirement benefits are instrumentally necessary to hire and retain quality employees; but are not end goal of hiring public employees itself.
We should only pay what is necessary to hire the kind of workers to make the City That Works work for us. Outsize benefits and compensation, like retiree health benefits, for example, should be reduced or eliminated so that money can be better spent on services that benefit all taxpayers.
[One good way to determine if we are having trouble finding talent for the city is to look at annual attrition rates and see what city employee turnover is. Any idea where to find those numbers?]