There has been plenty of talk lately about the State of Massachusetts and its interactions with the cities and towns, with much of it centered around the ability of cities and towns to join the state health care plan, the GIC. As most know from my prior postings here I have stated my opinion that the seventy percent union approval required to join the GIC is simply unmaneagable.
A link to my post on the “Municipal Meltdown“. But let us take this one step further. The actual need to join the GIC exists at least in part because of the management rights that the Governor has over that plan that Mayors and Managers do not have. From the Massachusetts Taxpayers Foundation report on health care:
The GIC also benefits from greater managerial flexibility than Massachusetts law permits for cities and towns. The GIC is able to use this flexibility to be creative and innovative in controlling its costs, while cities and towns are severely limited by the requirement that all aspects of employee health insurance—including plan offerings, deductibles, copayments,
and the percentage of the premium share paid by the employee—must be negotiated with each individual union. This requirement prevents cities and towns from responding quickly to changing market conditions. In contrast, the Commonwealth does not negotiate its employee and retiree health insurance benefits with its unions; the GIC selects health insurance plans and adjusts plan design, including deductibles and copayments,outside of the collective bargaining process.
The requirement in the law requiring a seventy percent approval by local unions must be abolished. If the State does not desire to do that then a bestowal of management rights akin to the Governor’s over the GIC must be provided to Mayors and Managers. It is the only way to stop what will be endless and pointless harangues from some who continue to argue about the menu while the ship is three quarters submerged. Margery Egan has written a column in the Herald in which she takes to task both City and State officials over the failure of many cities and towns to join the GIC.
Has your town joined the state’s health insurance pool? If not, why not?
Joining would save cities and towns $2.5 billion over 10 years, according to tax watchdog Michael Widmer of the Massachusetts Taxpayers Foundation. That’s enough to pay an awful lot of teachers, firefighters and cops.
But almost no towns have joined, Widmer says, because local unions don’t like the idea. They’d rather negotiate with individual towns. And because the Legislature has failed to give municipalities the power to override these unions, here go the towns again, begging, guilt-tripping homeowners into thinking they’re cheap and mean and cynical when the real problem is no political courage on Beacon Hill or in Town Hall.
I have strongly advocated the removal of this poison pill provision. Additionally I can tell you that Methuen has one very good health care system, with a split between city and labor of 62-38. In the coming weeks I will detail plans for our next fiscal year in health care on this blog. There will be some suprising numbers put out, but that is a story for later. For now let us move over to Speaker Dimasi, who has indicated support for the removal of the seventy percent threshold. From the Boston Globe transcript of Dimasi remarks to the Boston Chamber.
I believe that municipal leaders want to join GIC because they also believe that they can provide savings and good health care for municipal workers.
I also believe that municipal leaders should have the sole decision in determining whether their communities join GIC and deliver on the promise of property tax relief on the local level.
It is a needed recognition of reality, and we appreciate it. But on another score some vital clarification is needed. While it is true that the State has provided additional funding for us in the past several years, such increases have been limited to Chapter 70, education assistance. The general side of local government has been level funded, and will be level funded again this year. Additionally the Chapter 70 funding comes with what is known as “maintenance of local effort”, meaning that the City must pony up a big chunk of property tax dollars to give to the school system. That chunk will likely eat ALL of our local growth, meaning that any pay raises granted must come from existing, flat revenues. Under that scenario we are guilty of overspending if we even give a one percent raise through collective bargaining to city side employees. With normal expenses going through the roof (utilities go up for cities and towns as well) you can see what several years of this means to localities. It is a disaster. Having said that I think that those of us in management at the local level must apply the medicine that is needed to restore fiscal health and let the chips fall where they may. I can also say that in Methuen, our “appetite for tax increases” is not there, just as it is not there at the state level. I bring that up because I am frequently asked by State officials if we are at our Prop 2.5 levy capacity. In Methuen we are about 2.5 million below that capacity, and we hope to stay there. Blue Mass Group has done a posting on this subject that is worth a look.
Read the Blue Mass Group entry here.
Bill Manzi.com 