Tony Masiello has it right. Times have changed, the former state senator and Buffalo mayor said, and it is no longer possible for local governments and school districts to afford to provide retirees with free lifetime health care.
That is true for all employees, but it is especially so for elected officials, who need to set the standard for others to follow. It’s time to begin that now.
A recent story in The News clearly set out the problem. Erie County pays $41 million a year for health insurance covering about 2,950 retirees, compared to the $48.4 million that covers current workers. In the Buffalo School District and the City of Buffalo, the order is reversed: Each pays more for retiree health benefits than it does for current employees. That’s an equation that can lead only to crisis.
Masiello offers a prime example. “When I came into office in 1994, health care for retirees and current employees was $24 million,” the former mayor told News reporter Susan Schulman. “When I left [Dec. 31, 2005], it was $64 million. This is a huge amount of money for cash-strapped cities to be paying.
“I’m very grateful and appreciate what I have had, and I earned it, but times have changed. I think today, with the cost of health care, everybody has to pay something.”
Without some relief from the increasing burden of retiree health benefits, the tax cap eventually will force municipalities to make disastrous cuts in services.
Precious few New York retirees not covered by government pensions have fully covered health care. Most have to contend with Medicare and its premiums, co-pays and doughnut holes.
Lifetime health care and other benefits were granted to government workers at a time when it was cheaper to offer those benefits than to increase salaries.
But, as Masiello said, times have changed. Taxpayers can no longer afford to underwrite that benefit and, because of that, it will have to change. Arithmetic is an unforgiving master and something will have to give. The question is whether it will happen as a consequence of negotiation or of mathematical subtraction.
Change is always more difficult to negotiate in public employee unions. Carmakers and the United Auto Workers agreed to changes because without them that American industry would have died. But Erie County won’t die. Buffalo, despite what sometimes seems like its best efforts, won’t die. The Buffalo School District won’t die. That empowers union leaders in a way that their private-sector peers are not. For some – not all – it’s a license to be irresponsible.
The responsible thing today is to acknowledge that the glory days of fully paid health care are gone for retirees. But persuading unions to negotiate a change has to begin at the top tiers of management – that is, among those elected to office.
Former Erie County Executive Chris Collins took that step two years ago, cutting retiree health benefits for elected officials and top political appointees. His successor, Mark C. Poloncarz, has maintained that policy.
That was an important first step, but it needs to spread. Public service can’t be a path to milking a public that no longer has that kind of money available. Once public officials give up that benefit, local governments and school boards will have the high ground to expand that policy into union contracts.
It may not work, but without that first step, it is virtually guaranteed to fail, at least until the arithmetic itself does the same.