Every tax is a pay cut. Every tax cut is a pay raise.
Citizens for Limited Taxation
|Framingham Payback Schedule For Retirees Health Insurance|
|The 2010 budget as released by Framingham's chief financial officer
gives us the first tantalyzing look at the liability to be incurred
to cover the costs of health care for the retirees of the
Framingham town government and its schools. In fiscal 2010, after
the completion of an actuarial study, it will merely be listed as
a liability. In the following year, the state/town will determine
the payback schedule.
Bear in mind that the annual revenues for the town in fiscal 2009 was about $230 million including the Enterprise Fund.
Most town residents will be shocked to learn that the amount of liability ranges from $200 million to over $500 million. This in essence, brings Framingham close to bankruptcy. We will have to cut costs dramatically to pay for this.
Fifteen years after accruing it, we are being told it's a liability. Is that legally acceptable?
The table below lists the possible liability from $100 million to $500 million in increments of $100 million and a payback period of 20,25 or 30 years. The table entries are the amounts that would be taken out of operational funds.
|Liability for Retirees Health Insurance (in millions $$)|
|$ 100||$ 200||$ 300||$ 400||$ 500|
|20||$ 5||$ 10||$ 15||$ 20||$ 25|
|25||$ 4||$ 8||$ 12||$ 16||$ 20|
|30||$ 3.3||$ 6.6||$ 10||$ 13.3||$ 16.6|
|These annual installments obviously will be taken from operating funds
so significant layoffs will be inevitable.
We will pay this liability for 20 to 30 years but we will get nothing in exchange. It is merely a transference of wealth from the Framingham taxpayers to the public sector employees in the town and schools.
This is the health insurance breakdown in 2007 .
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