Municipal Partnership bill includes misguided GIC penalties

Governor Deval Patrick is proposing to reduce state aid to municipalities if they do not join the state Group Insurance Commission system or adopt changes that result in comparable cost savings. The MTA opposes this proposal, which is included in a Municipal Partnership bill submitted on January 28, the same day he filed his budget for fiscal year 2010.

"We believe there are better ways to encourage communities to reduce costs for health insurance than threatening to slash local aid funds at a time when local aid already has been severely cut," said MTA President Anne Wass.

Recent MTA reporting clearly refutes the claim that unions have been instrumental in blocking entry into the GIC. Of approximately 300 teacher locals for which data was collected, roughly 80 percent indicated that the employer has not pursued entering the GIC.

In those entities that have joined or are considering joining the GIC, the local unions have initiated the process more often than the employers.

The MTA believes that municipal and school district officials need more education about various ways to reduce health care expenses. Those strategies may include, but are not limited to, entering the GIC.

Also in the legislation accompanying House 1, the governor proposes a combination of strategies to address a budget gap that he estimates at $3.5 billion. They include generating additional municipal revenues to help offset the impact of the local aid reductions.

The legislation contains a number of revenue-raising proposals that the MTA supports, including:

  • Eliminating the property tax exemption for telephone poles and telecommunications switching stations.
  • Allowing cities and towns, at local option, to levy an additional 1 percent tax on meals and hotel stays.
  • Seeking a statewide increase of 1 percent in taxes on meals and hotel occupancy, generating about $150 million to be redistributed to all cities and towns.

There are also numerous other proposals in the budget and accompanying bills that affect MTA members and seek additional revenues to address the economic crisis. These are currently being analyzed by the MTA Governmental Services Division.

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