The Elly Report: Local Perspectives

Municipal Labor Unions: Time to Invest in Their City

by Mike Mague

You can see it coming again. Threaten to reduce city services and wait for the taxpayer to succumb. In March 2005, City Manager Mike O'Brien recommended a plan to fund Firefighter's Local 1009 arbitration award by laying off 60 firefighters. In May, he noted that to maintain the existing service level in the School Department he would have to eliminate 95 teacher positions. The same old game needs a change of rules or outcomes.

There are presently 9,000 City employees and retirees whose health insurance premiums consume nearly 15% or $60 million of the proposed $497 million 2006 budget. Those employees are predominantly members of the municipal employee unions: police, fire, teachers, and city employees. Also covered under health insurance programs are elected officials, city council, or school committee members. City employees who work over 20 hours per week are eligible for benefits, including heath insurance.

No one will deny that health coverage is a much coveted adjunct to municipal employee wage packages. However, the cost of such benefits have nearly doubled from 8% of the total city budget in 1996.

Something has to give, or somebody has to give. City Manager O'Brien sensibly suggested that something should be the employee share of health care premiums. He is proposing a series of employee health insurance reforms that could save the city $3.15 million annually.

In case you missed it, The Worcester Regional Research Bureau published a report (05-01) in February 2005, "Condition Serious, Prognosis Uncertain: The Impact of Municipal Employees Health Insurance on Massachusetts Cities." One of its findings is that "Worcester's high premium and contribution rates result in the City paying more than $1200 more per employee each year than the average city surveyed -- at least $6.6 million each year." Translate "the city pays" to "the taxpayer pays." This year's property tax bill increases reflect, in large part, those rising health insurance costs.

The Telegram and Gazette in a March 3, 2005 editorial insisted that to get this line item in check "city employees will have to pay a share of cost more in line with current norms." They further suggested that the "city must adopt a 75-25 cost split similar to those of the private sector or state employees."

So again this summer we are faced with contract negotiations with the municipal employee unions and the attendant posturing and near extortion. This time there is too much at stake. Let's hope that the interests of the taxpayers and the future of this city supercedes the union's self interest. Haven't we done this before?