Dec 8, 2008 9:34 pm US/Eastern
DiMasi: Cities, Towns Could See 10 Percent Aid Cut
BOSTON (WBZ) ―
House Speaker Salvatore DiMasi has warned that cities and towns could see deep cuts in state aid, and is pushing a plan to allow municipalities to save money by joining the state's insurance plan despite the objections of local unions.
Under current law, cities and towns that want to join the Group Insurance Commission must win the backing of 70 percent of local union representation.
DiMasi said the provision has stymied efforts by many communities to join the commission -- costing them millions of dollars in higher health care costs.
That could put even more pressure on local budgets as the state faces a worsening fiscal outlook. Just 17 cities and towns have joined the commission, along with 10 school districts and planning councils.
DiMasi said city and town leaders should brace themselves for up to a 10 percent cut in local aid in the new fiscal year.
GOVERNOR: ANYTHING'S POSSIBLE
"I don't think there is a lot of good news on the horizon," Gov. Deval Patrick said Monday. "We're doing as much as we can to hold local aid and school funding. But I've said all along that if we need to go deeper, we will go deeper."
When asked in he thought 10 percent cuts to local funding were possible, Patrick said, "Anything's possible. But we're managing this as closely and carefully and actively as we can, and we will continue to do so."
In October, Gov. Deval Patrick announced more than $1 billion in cuts and spending controls, and the elimination of 1,000 state jobs, and DiMasi said there's no indication the fiscal situation will turn around quickly.
DiMasi said the House is looking at other areas for savings including a proposal by Patrick to raise $13 million by closing a so-called "Telecom Tax Loophole" that has allowed Verizon to avoid taxes on its poles and service lines.
He also said a possible increase in the state gas tax should be debated in the context of other transportation issues -- including proposed toll hikes, the privatization of the Massachusetts Turnpike and a state transportation reorganization plan.
DiMasi also said he would be open to the idea of putting tolls on highways like Interstate 93 at the borders with other states.
THE BREAKDOWN
Assuming local cities and towns do get a 10 percent cut, here's what each stands to lose:
- Boston: $50 million
- Worcester: $26 million
- Brockton: $16 million
- Lawrence: $16 million
Check: My Town's Local Aid (2009 Cherry Sheets)
GROUP INSURANCE COMMISSION
The Group Insurance Commission is a quasi-independent state agency that administers health insurance and other benefits to state workers and retirees. Because it administers such a large number of workers, it can negotiate lower rates with insurers.
If every city and town joined the commission, they could save as much as $765 million in the 2013 fiscal year, according to an estimate by the business-backed Massachusetts Taxpayers Foundation.
DiMasi blamed unions for discouraging communities from joining the system.
"I was told that most of the unions would be in favor of this and they would help the cities and towns opt into (the commission)," he said. "I have not seen the evidence."
Gov. Deval Patrick said he was open to the idea.
"We do want to make it as easy as possible for local communities to take advantages of the kinds of savings that the group insurance program offers and we're open to that and other ideas," Patrick said.
Union officials said they would fight to protect their bargaining position.
Negotiating contracts on a town-by-town basis helps unions strike better deals for workers and gives them bargaining chips to trade off for other benefits.
"We are going to reserve comment until we see the details of the legislation, but AFSCME would be opposed to any proposal that would strip us of our collective bargaining rights," said Jim Durkin, spokesman for the American Federation of State, County and Municipal Employees, Council 93, which represents 25,000 municipal employees in Massachusetts.
Cities and towns welcomed the proposed change, but said they would like even more control, including the right to raise co-pays outside of the collective bargaining process.
"We applaud the speaker's strong proposal that recognizes that collective bargaining is blocking the efforts of cities and towns to modernize their health insurance plans and achieve real savings," said Geoff Beckwith, director of the Massachusetts Municipal Association.
(© 2009 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)
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