Massachusetts municipalities that offer employees, retirees, and elected officials the most generous and costly health insurance plans will feel the squeeze of the new national health care law’s tax on “Cadillac’’ insurance plans.
A family health plan that costs more than $27,500 would be subject to a 40 percent tax on every dollar spent above that threshold. The tax, set to take effect in 2018, would be levied on insurers, who would probably pass it on to municipalities and other employers. A few cities and towns already have family plans that exceed $27,500, and many others are on track to surpass that level before the tax kicks in.
That means taxpayers in many communities could be facing thousands of dollars in additional costs for every employee, retired worker, and elected leader they cover, unless those communities move soon to scale back coverage, a change the law is designed to encourage.
“This could be extremely expensive,’’ said Geoffrey C. Beckwith, executive director of the Massachusetts Municipal Association, a lobbying group for cities and towns that has pushed for an overhaul of the municipal health care system. “In general, municipalities would fall into this tax because health care is very expensive in Massachusetts and the municipal plans are very generous.’’FULL ENTRY
Local officials in Norfolk, Concord, Framingham, and Shirley are expressing disappointment and dismay over the loss of state mitigation funds that have in the past compensated them for the ambulance, police, and other services they provide to state prisons in their communities.
The Department of Correction decided to eliminate the roughly $1 million in payments to host communities statewide, according to agency spokeswoman Diane Wiffin, after receiving orders to reduce spending by $6.7 million, its share in the latest round of Patrick administration budget cutbacks.
“Unfortunately, due to budget cuts, the DOC cannot continue to provide mitigation funds,’’ Wiffin wrote in an e-mail. “The recession has hit the DOC just as it has other agencies.’’ She said the department was in the process last week of notifying communities they would not be receiving the funds.
The local officials say the state is not living up to its obligations, and point out that the recession has also cut into the local aid payments and tax revenues that they need to balance their municipal ledgers.
Shirley, which hosts the maximum-security Souza-Baranowski Correctional Center as well as MCI-Shirley, a medium-security prison, was in line for the $170,389 it received last year.
“Shirley has been a good neighbor to the prison,’’ said Enrico Cappucci, chairman of the town’s Board of Selectmen. “We feel they have to in some way help us because we have to provide services’’ to the prisons, including fire and ambulance coverage, and police assistance after escape attempts.
Cappucci and state Representative Jen Benson, a Democrat from Lunenburg, met with the department’s commissioner, Harold Clarke, on Nov. 13 to urge him to reconsider the funding cut. Clarke told them that he would communicate their request, Cappucci said.
Norfolk, which is home to the state’s largest prison, MCI-Norfolk, as well as two other Department of Correction facilities, will lose $170,000 in mitigation money this year, according to the chairman of its Board of Selectmen, Jim Lehan.
The town used to get $380,000 for prison-related expenses, but last year that amount was cut by more than half. When that happened, the town had to lay off five teachers, and five town employees, Lehan said, and residents had to live with larger class sizes, fewer road repairs, and slower snow removal after storms.
“Some of the secondary roads were not cleared as quickly, and that will be the case this year as well, because we don’t have the funds,’’ he said. “All of our employees are stretched to their limits.’’
And without any mitigation payment this year, the town will have to make additional cuts, Lehan said.
“State land is not taxable,’’ he said. “Prison mitigation money is designed for the expenses of ambulance and fire services. For the last couple of years, the funds are being depleted, but the services are still there.’’
Norfolk Fire Captain Peter Petruchik said his department’s ambulance responds to calls from the community’s three prisons approximately every other day, with 133 prison-related calls logged this year. The Fire Department has also responded to mattress and trash fires at the prisons, he said, and is responsible for fire-safety inspections at the state facilities.
The Police Department gets involved when prison visitors get locked out of their cars, or have outstanding warrants that need to be processed, Petruchik said.
Framingham hosts the state’s prison for women, MCI-Framingham, as well as the South Middlesex Correctional Center, and the Board of Selectmen’s chairwoman, Ginger Esty, said cutting the mitigation fund will have “a very serious impact’’ on her town. Last year, the town received $79,000 from the Department of Correction.
“Again, the state is not fulfilling their obligations,’’ Esty said. “There are a lot of calls for fire and police to go and assist, and there are tangential expenses of the prison population staying in our community.’’
Halfway houses and other institutions that provide programs to inmates spring up near prisons, Esty said, and they also require services from the town.
Concord, which has MCI-Concord as well as a minimum-security prerelease facility, the Northeastern Correctional Center, received $151,778 in mitigation funds last year.
“The bargain between municipalities and the state is being breached,’’ said Concord Selectwoman Virginia McIntyre.
Walpole, where MCI-Cedar Junction is located, saw a cut of $750,000 last year, and will lose another $60,000 this year, said Town Administrator Michael Boynton.
But regardless of state funding, local officials said, their communities will continue to provide services to the correctional facilities.
“You can’t say no when the call comes in,’’ said Norfolk’s Selectman Lehan. “You have someone’s life at stake.’’
-- By Julie Masis, Globe Correspondent | November 22, 2009