Read interview transcript here:
Ordinarily when a politician makes a decision that saves taxpayers money it quickly becomes news with all the requisite self-congratulation and back-slapping for a job well done. This was not the case, though, when Northampton Mayor Mary Clare Higgins axed health insurance coverage for an unspecified number of people retroactively in the fall of 2005. Gone is Northampton’s long standing practice of granting past city employees with ten or more years of service the option of health benefits upon retirement. Interestingly, there were no bold headlines trumpeting the mayor’s move when it transpired that November, nor was there a morning announcement on the local AM radio station. Indeed, the change in eligibility requirements to save the taxpayers money happened quietly with the stroke of a pen behind a closed door, without a mention in the local press.
Ironically, health care coverage as a public policy issue is often in the news and a stalwart feature of political campaigns as candidates tout their ideas on how they’re going to arrange it, afford it and make it better in exchange for your vote. In a "first world" country like the United States, much is made of our obligation to provide quality health care for all of our citizens. Generally people who don’t have health care access live shorter and less contented lives. But health care costs money, lots of money. That, according to Higgins, is the reason she canceled the city’s long time practice regarding health insurance.
For her part, Higgins acknowledges she removed from eligibility these past employees, people who left city service with an understanding that they had accrued this benefit during their employment tenure. "I would say that’s primarily the group that we’re aiming at in this change of policy and I don’t think that that’s particularly unfair" said Higgins in a July 16 interview in her office, citing the policy as "folklore" because it wasn’t in print. The practice was perpetuated by the city for years, however, as verified by former city treasurer Shirley LaRose. Evidently city employees received word of the benefit by talking to a peer, supervisor or the city treasurer. Higgins concedes, "in fact people who had ten years vested were getting health insurance many years later, when they retired." Is that folklore or a verbal contract?
Higgins referred to a legal opinion that states the city must treat everyone alike under Mass. General Law 32B. She went on to say that she cannot grandfather past employees while applying her new policy prospectively. Despite repeated requests she has failed to produce that legal interpretation for the Valley Advocate, however, indicating that the city solicitor was "out of town" at the time of our interview. I provided the mayor with my questions three weeks in advance, though she was on vacation herself for two of those weeks. Still, how long could a phone call to the solicitor requesting such an opinion take?
Further justifying her decision Higgins points to General Accounting Standards Board Statement 45 (GASB 45). The accounting practice enacted in 2004 requiring state and local governmental employers to account for "other post employment benefits" (OPEB) in the same way they account for pension liabilities, that is during an employee’s active employment years rather than later under the pay-as-you-go method historically used. Higgins words, "So, because GASB has required us to quantify that, we have begun to look at what our obligations are and it became clear that we had an open ended-open ended-policy here."
Contradicting Higgins on who these accounting procedures should apply to, a GASB news release dated August 2, 2004 states, "The provisions of Statement 45 may be applied prospectively and do not require governments to fund their OPEB plans." It appears that GASB methods are to be applied to current and new employees only, contrary to Higgins’ assertions that she must apply it to past employees as well. It is unclear whether the commonwealth has adopted all or part of the GASB procedures to date.
For more information on GASB 45 see http://www.gasb.org/news/nr080204.html and http://www.gasb.org/st/summary/gstsm45.html.
Why then the covert push to take away this benefit from past city employees? After all, this benefit is available to all city employees that work twenty hours or more each week, from school cafeteria workers up to and including the superintendent of schools. Eligibility is also granted to part time school committee members, Smith Vocational School trustees and city councilors as well as the city clerk and mayor. With such liberal eligibility standards, why quietly take away a benefit from people who thought they had earned it at the time they left city service?
Repeatedly I tried to ascertain exactly how many people were impacted by her decision, and she couldn’t or wouldn’t say. Higgins indicated that "we notified everybody, but before that we also sent a letter to everybody who had ten years in the system who was not, who would have been, who-who would have maybe have expected they would have been eligible under the previous practice." I’ve asked for a copy of the letter she referenced as well as the date it was mailed, but so far no letter, no date.
How can the city’s chief executive make decisions this way and why isn’t the city council asking some tough questions on behalf of city employees, many of whom are Northampton residents? During the June 21 city council meeting Higgins implied, "looottts of people have worked for the city for a short period of time, ten years or so, and then go somewhere else" further describing the insurance practice as a, "very, very costly benefit." When I mentioned that no city councilors asked how costly she replied, "I don’t disagree with you that maybe they could have asked that question, but I can’t ask their questions for them."
Comments like these might lead one to believe that she must have some idea of how many people would be impacted and how much this change would save taxpayers financially, but no such figures were forthcoming other than a hypothetical exercise. As I pressed for information she indicated I would have to file a Freedom of Information Act request and remunerate the city for any staff time and copying costs related to that effort. All this because I asked her to back up her public statements with facts and data.
Read interview transcript: https://valleyadvocate.com/article.cfm?aid=2422
