Today’s Eagle Tribune has an article that again discusses the potential for changing the criteria for cities to join the State GIC. Under current state law for a city to join the state GIC and take advantage of its lower cost structure it must receive 70 percent approval from the affected municipal unions. Under that provision only a handful of cities have joined the GIC, and the effort has been a failure. In light of that, and with steep local aid cuts looming on the horizon, Speaker Sal Dimasi has indicated that he will support removing the union ability to impact such decisions by removing or modifying the 70 percent union approval currently required. From the Eagle Tribune:
As local leaders brace for budget cuts, mayors say they need to get ballooning health care costs under control.
Massachusetts cities and towns could have saved as much as $100 million this year, $750 million in fiscal 2013 and $2.5 billion in fiscal year 2018 if they all joined the GIC this year, according to a report jointly released in August 2007 by the Boston Municipal Research Bureau and the Massachusetts Taxpayers Foundation.
Those are some substantial savings, and are ever more critical with the financial news getting worse by the day. But it is important to note that with or without the fiscal crisis the rate of increase in health care was never going to be sustainable for municipalities. This crisis only accelerated the day of reckoning. The Massachusetts Teachers Association predictably criticized the plan.
The Massachusetts Teachers Association, a statewide teachers union, released a statement calling DiMasi’s plan “an attack” on workers’ rights.
“Collective bargaining is the mechanism through which ordinary workers have meaningful input in what their economic lives will look like,” it said. “Denying employees the right to have any say over their health insurance plans is an attack on the rights and interests of working people in this Commonwealth.”
They are no doubt correct in saying that the bill diminishes their collective bargaining rights. But they consistently fail to say how the existing cost structure, which cannot be sustained with current revenues, should go forward. Without adjustments to the cost structure in place today the result must necessarily be layoffs to union workers. That is a given. I must have missed the portion of their press release detailing how they would increase revenues to localities to fund ongoing operations.
Finally my interview on the subject contained extensive discussion of the other potential that exists, which is giving mayors and managers control over plan design outside of the collective bargaining process. That option would satisfy some unions preferences for local plans as opposed to the GIC, but would give management the same rights the Governor currently has over the GIC. Those comments did not make the paper, but are really at the heart of this debate. One of the reasons the GIC has had such a cost advantage over local plans is because of that power. And a prime example of that is reflected in the comments of Haverhill Mayor James Fiorentini, who would like to push the co-pay for doctors visits from $5 to $15.
Fiorentini wants to raise the co-payment to $15 per doctor’s visit. He said that would save Haverhill $400,000 a year. He noted that the police union agreed to start paying higher co-payments beginning next month as part of its latest contract.
If Mayor Fiorentini had control over plan design he could save that money now, and in so doing likely save union jobs. Ultimately the union membership will benefit, both from saved jobs and cheaper premiums. That fact appears to be lost on most of our negotiating partners.
At the State level we did get an expression of support from Representative Campbell in the Trib story. And I must say that this headline was much easier to take than the one that dealt with my call for increased authority in the area of school collective bargaining contracts. These are not power grabs by Mayors, but rather a serious attempt to gain control over costs that will put localities under water in short order. For those opposed to this increased management authority I ask “what is your plan”? Every time that question gets asked we only hear crickets chirping in response. Read the Tribune article here.