New Bedford mayor Scott Lang calls for a "new public employment covenant", arguing that the current model for compensating public sector employees is a "costly, inefficient 20th-century industrial model" that is directing too many scarce public dollars toward employee benefits at the expense of government services such as public safety and education.
This op-ed from Edward Glaeser a couple weeks back argues in favor of 1) more transparency regarding state and local pension plans to create public pressure to fully fund them, and 2) "Defined benefit plans should be replaced with defined contribution plans for new employees."
Yesterday's Boston Globe reported that the state faces a $2 billion shortfall next year, and that Governor Patrick expects to deal with it by cutting $1.5 billion and finding $500 million in unspecified "cost saving measures".
I hope that part of that cost-saving includes granting municipal leaders to authority to make changes to employee health care benefits, including moving employees to the state GIC. Independent researchers estimate this alone could save $100 million a year, and more in future years. At this time there is a very high barrier to make this type of change, as it requires 70% approval from each municipal union. The governor favors reducing that percentage to 50%, but would that be enough? Boston Mayor Tom Menino wants the authority to make the change unilaterally (without putting it to a union vote at all), and frankly that is closer to the reality the rest of us deal with - for those in the nonprofit or private sector, if our employer wants to make changes to our health care benefits, we do not get to vote on it.
Metrowest Daily News editorializes about cuts to education budgets due to rising health care costs: "Before the budget process advances to the next stage - when talk turns to program cuts, layoffs and overrides - residents should demand straight answers on what their leaders are doing to keep health care inflation from dragging down schools and services."
While other states are increasing investments in early education programs such as Head Start and universal pre-K, Massachusetts has cut these programs by nearly $1 million.
"Access to state-funded pre-kindergarten programs “remains limited” in Massachusetts, the report said, with 11 percent of four-year-olds and 3 percent of three-year-olds served. In addition, the state falls short on some industry quality control areas. For instance, it does not require pre-kindergarten teachers to have a college degree."
Yet while we cannot find $1 million to invest in our youngest residents, we are able to waste $100 million a year on health care for municipal employees who refuse to move to the GIC - i.e. the health insurance program that covers state employees and legislators.
Scot Lehigh's op-ed today highlights the Boston Foundation report released yesterday which concluded that the bulk of the additional money poured into education since the Education Reform Act of 1993 has gone into employee health care costs rather than educating children.
Lehigh questions Governor Patrick's commitment to fixing the problem: "But Governor Deval Patrick and the Democratic Legislature have shown little if any appetite for such bold reform. Indeed, though Secretary of Education Paul Reville portrayed his boss as focused on finding a workable solution, “reluctant’’ or “half-hearted’’ would be more apt descriptions of Patrick’s approach."
Perhaps calls from constituents to Governor Patrick's office would help sway him. Sign up for our Action Alerts and we will let you know when it's time to start flooding the governor's office with calls!
From today's Boston Globe: "Hundreds of millions of dollars the state has provided to local school districts to improve classroom education has instead been gobbled up by soaring health care costs for school employees, according to a new report that questions whether Massachusetts has fulfilled the ambitious goals of its 1993 education reform law."
This is just another example of the urgent need for Plan Design, so that vital government functions -- such as education -- are not held hostage by the intransigence of municipal sector unions refusing to allow their members to be moved into more economical health insurance plans such as the state GIC.
Also I have to take issue with this quote from the president of the Massachusetts Teachers Association: "In general, public employee have accepted lower salaries in exchange for better benefits." The median household income in Massachusetts in 2009 was $65,304. The average teacher salary in Massachusetts in 2008-2009 was $67,577. That means that the average teacher earned more than most Massachusetts households last year. And of course that does not include the extremely generous health insurance or guaranteed pension.
I do not think it helps the broader policy debate to have the union president make statements that are at odds with the facts.
From Saturday Boston Globe: "A former Cape Cod sheriff’s employee collecting a $67,000 annual disability pension after injuring his arm is defending a new job as a Hollywood stunt man." How badly could he have hurt his arm that he was put on permanent disability? The article says he hurt it while breaking up a fight between inmates. What exactly happened to the arm? Obviously it wasn't paralyzed or amputated. I don't understand why we don't set a higher bar for placing someone on permanent disability. How many others are there out there like this guy, collecting disability even though they are perfectly capable of working?
From yesterday's Globe: "The deadline for signing up for the Group Insurance Commission for 2011 passed this week with no takers — a disappointment for those who in 2007 believed state government had hit on a plan to save municipalities millions of dollars annually...[Boston Mayor Tom] Menino said if he gained the ability to increase copayments and deductibles the way the state GIC does the city could save $1 million a month. Currently, the city spends about $300 million for health care insurance, more than the Police Department’s entire budget."
"Returning from their extended vacation next month, members of the Great and General Court will find that the pressure has not diminished — nor should it — to give mayors and town managers greater flexibility in designing employee health plans." Click here to read the rest.