Behold the Budget Buster

We're going to wade into budget week slowly. We know all too well how cold the water is this time of year, and diving in is just not advised. It'll stop your heart and all that.

So, to sort of get used to it, here's a little story on health insurance, or, how to try to tame a ridiculous budget buster. The mayor is rolling a bunch of new plans that will cost the city (and the employee) less, while offering same or better services (although that's probably in the eye of the beholder in some cases). From the info from the Mayor's Office, once switch from one Blue Cross plan to the other would save a family like $4,800 a year. That should cover the lack of raise, no?

Health insurance costs are going up 12 percent for the city this year, or over $1 million. Basically, any new dollar the city taking in next year over this year is gone to health insurance. So, new inflationary costs and step raises and all that stuff need to get funded somewhere else. Or, you have a $5 million hole (which, I am now obsessively reminding one and all, includes $500,000 for the stabilization fund).

So, take a gander at the health insurance situation, in all its bloated, crippling glory. And when you get bored of my constant babbling about how there's a fundamental problem between stagnant revenues and increasing costs, remember this as a not-so-shining example.

It's going to be a busy week. Let's go.

A Few Money Notes

A few budget-related items:

Is a fee a tax? We'll find out how local folks feel about that question in the next few months, I'd guess. The Building Department is ramping up a fee increase, and Mayor Lisa Wong has pointed to larger fees in general as a possible revenue source. When Gov. Mitt Romney increased fees during his term, he was killed for it as a tax increase measure, and it was a popular talking point against him while he was running for president. Will residents feel the same way if it costs more to get a dog license, for businesses to pay more for a liquor license, or for someone to build a new home? Or will they fork over the few extra bucks without even really realizing the difference? Should be an interesting situation on this one as it moves forward.

Is the city's projected budget deficit really $5 million? Here's why I ask: This level-services talk is a lot of old-school budget thinking. But Wong has discussed, time and again, creating a new budget process. In fact, in a recent interview, she pointed directly to not just automatically all line items to keep services at today's levels. According to the Mayor's Office, the plan is still to move toward the "performanced-based" budgeting and make some changes. So if that's the plan -- and that was going to naturally lead to a reduction in costs -- isn't that $5 million really an out-dated, old-school figure? Isn't that number probably lower? Those questions hasn't been given a yes-or-no answer, but it will be interesting to see if the changes can lead to some savings, or if it will be cuts alone that fill in the gap.

Finally, you may have read over the last few days a few things about health-care costs for municipalities. One thing that seems to have been missing in the story and today's editorial is the fact that for the city to join the state's GIC insurance program, the city's unions have to agree to the change. The city can't just unilaterally make the change. So to make it happen, the city would need to negotiate, one union at a time, the change. You talk to municipal leaders around the state and call that provision a "poison pill," and not one argues that term. And trust me, I've tried to find someone to say, "No, no, no. It's not really a poison pill." But no one will do it. One guy (not local) said the savings wouldn't be worth the hassle of endless and headache-causing union negotiations. Even State House folks admit the union mandate is a problem. And you wonder why fewer than 20 communities have signed up for something that seems so logical. Health care costs for cities and towns -- just like for you and I -- are going crazy, but the current GIC situation is a non-starter, and will only gain real traction when the state yanks out the union provision. Which is unlikely to happen any time soon.