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Citizens for Limited Taxation

Voters question cost of benefits
Want closer look at insurance expenses
Thursday, March 20, 2004
Gretchen Weber, Globe Correspondent THe Boston Globe
A vote by Town Meeting last week urging Framingham and union officials to negotiate salaries and health care coverage together reflects a growing concern among taxpayers about the cost of employee benefits, proponents say.

Health insurance costs for town employees have skyrocketed from $15 million in 2002 to $22.5 million anticipated for the next fiscal year, a jump of 45 percent, according to Bill Haberman, chairman of Town Meeting's Standing Committee on Ways and Means.  The total 2005 budget for the town is approximately $166 million.

Proponents of the nonbinding resolution, which had the support of several town committees and passed with a vote of 75 to 53, hope it will help bring the town's health insurance costs under control.

Currently, based on a law the town adopted in 1993, all the employee unions negotiate health benefits as a coalition.  The town then negotiates other aspects of labor contracts separately with each union.

The resolution calls for the town and the unions to revoke that law, which would require a majority vote by the Board of Selectmen and a majority vote by coalition members. Framingham is one of few area communities to negotiate labor contracts this way.

Town Meeting member Andy Limeri, chairman of the body's Education Standing Committee, said that by passing the measure, the majority of Town Meeting -- which ultimately holds the purse strings in funding labor contracts -- sent the message that it might block future raises for employees unless residents are convinced that health insurance benefits are being sufficiently factored into compensation agreements.

"We're saying, let's set a target on total compensation and start meeting that target," he said. "We've got to understand that there's a single bucket the money is coming from."

At Town Meeting, Town Manager George P. King Jr. dismissed the suggestion that health benefits are not already taken into account during contract negotiations.

"Of course we bargain under total compensation," he said.  "Certainly when we're in discussions with unions about packages, there's a discussion about benefits."

King said this week that the current health care contract with the coalition is up at the end of the year and negotiations will begin soon.

Selectman Christopher Ross said this week that while his board has not taken a position on the resolution, selectmen are already seeking to abandon the coalition arrangement through state legislation.  If the Legislature passes a bill the selectmen filed last winter, Ross said, Framingham could do so without a majority vote of the union officials, something he said could be difficult to achieve.

"It's not a black-and-white issue, but paying 90 percent of health insurance costs is a real problem for us," he said.  "We need to see if at some point we can change that to be more like the rest of the world."

According to Haberman, during the past five years, that's something Town Meeting members have shown increasing interest in, too.

"People are very concerned with the high cost of health insurance to the town and that it's eating up so much money," he said.

By requiring negotiators to factor health insurance costs into compensation packages, proponents predicted, the resolution could lead to decreased health benefits or a halt in salary increases for town employees.

"The failure to connect the two pieces of employee compensation has kept us from having a clear picture of how we compensate our employees," said Steve Kruger, a founder of the Framingham Taxpayers Association, which formed last year as a fiscal watchdog group.  "The cost of health insurance is so high now, we can no longer operate in this way."

Some Town Meeting members opposed the motion, arguing that it would not alter the root problem of high health insurance costs and that it could create a hostile environment for collective bargaining.

"[This] will not truly solve the problems relating to the escalating costs of health insurance and health care in this community," Barbara Connery, president of the Framingham Teachers Association, said in a written response to the motion.

According to Connery, bargaining as a coalition is simpler, and it has saved money for the town because employees at one point chose a less-expensive health plan than they otherwise would have.

According to town officials, town employees with an HMO plan get 90 percent of their health insurance costs paid by the town.  A family plan of this kind costs the town $12,000 a year, they said, while town employees with a more expensive, non-HMO plan get 75 percent subsidized by the town at a cost of $22,000 per employee for a family plan.

"It's a huge chunk of the budget," Limeri said.  "This year, health insurance is up 13 percent -- the fastest increase of anything else in the budget.  And there's nothing we can do about it."

A resolution was also passed to establish a health insurance study committee composed of Kruger, a representative from the Human Resources Department, and several Town Meeting members.

The committee is expected to report back to Town Meeting this fall.

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