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Massachusetts Liberal

Observations on politics, the media and life in Massachusetts and beyond from the left side of the road.

Tuesday, August 12, 2008

Fair share

There's an interesting trend developing in these dog days of Olympics, Georgian invasions and rain, rain, rain -- the concept of shared responsibility. Whether it drowns remains to be seen.

You can see the roots in the politically surprising decision of Deval Patrick to veto a legislatively approved pension increase for retired public employees and the potentially desperate move of Transportation Secretary Bernard Cohen to try and get the state's other transportation departments to share their wealth.

Of course, you don't see it in the segments of the business community that are digging in their heels at the thought of paying their fair share of the cost of health insurance for their employees.

Tough times make for tough decisions. Patrick's decision to say no to a $10 a month increase that could help pay for retirees' groceries and gasoline has real potential to alienate a key segment of voters. So coming from a governor who is battling negative ratings, it's one of the more courageous political acts I've seen around here in a long time.

As the Globe notes:
The governor had been largely supportive of the pension boosts - and was expected to sign the legislation - but requested that the cost-of-living increases be restricted to workers with pensions less than $40,000. He argued that would make the plan more affordable for the state, while providing pension boosts for those who need it most.
The head of the group that lobbies for retired public employees admits they may have been caught up in bad gamble:
"We rolled the dice and came up empty," said Ralph White, president of the Retired State, County and Municipal Employees Association of Massachusetts. "We were taking a certain amount of risk. Hindsight being 20-20, we underestimated the priority the governor placed on his amendment."
Massachusetts faces a ballooning tab for our children and grandchildren to help pay for borrowing to finance road and bridge repair and spur economic development. It also faces a potential elimination of the state income tax as a revolt. Many of the people likely to vote for repeal probably collect the pensions that Patrick targeted.

Less courageous and more desperate is the effort to have Massport and Mass Highway help kick in and pay for the out-of-control costs at the Mass Pike and the MBTA -- costs largely associated with borrowing money.
Combined, the Turnpike Authority and the T are expected to face about a $200 million hole in their annual budgets, beginning in July 2009, according to some estimates. The T has ruled out fare increases for the coming year, but warns of a hefty increase in 2010 if it does not get legislative help. The Turnpike Authority must decide soon whether to raise tolls in January, as its board looks at a $70 million deficit this budget year and a $100 million deficit in next year's spending plan.
The plan is far from fool-proof. Mass Highway already uses borrowed money to pay for salaries (a stupid move) while Massport's cash cow is Logan Airport and the airlines, hardly a pillar of economic vitality.
"Perhaps they can pull a rabbit out of the hat, but I'm skeptical," said Michael Widmer, president of the Massachusetts Taxpayers Foundation and a member of a bipartisan commission that documented the financial problems of the state's transportation system last year.
But it's at least an example of trying to think outside the box.

Which brings us to businesses digging in their heels against paying more to help meet the health care costs of their employees.

The call is part of a package that added an assessment on health insurance companies' reserve accounts, required additional payments from hospitals, and shifted money from the Medical Security Trust Fund, which is used to pay health insurance for the unemployed.

It proposes to change the either/or provision of the current law that requires most employers with more than 10 full-time equivalent employees to offer health coverage or to pay an annual "fair share" penalty of $295 per worker. It gives companies an option of paying at least 33 percent of full-time workers' premiums within the first 90 days of employment or making sure that at least 25 percent of their full-time workers are covered by an employer plan.

Yes, economic times are tough, particularly for small businesses like retailers. But I'm one of those folks who have been troubled by the idea that the penalty on a person who doesn't buy mandatory insurance is far higher than the one on businesses that don't provide coverage choices.

The medicine being proposed is bitter -- for everyone. Those assessments will eventually come back on the individual anyway in the form of higher prices. But this is a grand bargain and everyone should pay their fair share. Just like the retired state employees, Mass Pike drivers and MBTA passengers.

You have a better idea business folks? We're listening.

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