LEGISLATURE WEIGHS BUDGET & TAX PROPOSALS

Retiree Healthcare Reform Awaits Action

MARCH 19, 2013: For the first time in nearly a generation, government leaders are strongly weighing options that would increase state revenues – raise taxes – to pay for much needed infrastructure improvements and further investment in education.

With nearly laser-like attention being placed on the issue of taxes and the pending FY14 State Budget, legislative leaders have not begun to address the number one issue on the mind of public retirees and employees – H59, Retiree Healthcare Reform.

In January, Governor Deval Patrick unveiled a proposal that would raise the state’s income tax to 6.25%, while simultaneously lowering the sales tax to 4.25%. The nearly $2 billion in annual revenue generated from the change, along with closing so-called tax loopholes and limiting deductions for high income earners, would fund transportation infrastructure improvements and expand educational funding.

That proposal, along with Patrick’s FY14 Budget proposal, is now before the House Committee on Ways and Means. However, Senate Leaders are also heavily engaged in the behind the scenes debate over what steps should be taken to increase state revenues and how those revenues are best spent.

In fact, due to the scope of the Governor’s proposal and controversial nature of increasing taxes, most individual legislators have been meeting with constituents and local business leaders listening to concerns and seeking advice. With the Massachusetts economy just now beginning to pick up after the 2008 economic crash, crafting policy that does not hobble the recovery is essential.

Meanwhile, other legislation, such as H59, awaits action before various legislative committees. The Joint Committee on Public Service, before which H59 now sits, has nearly 1,000 separate bills under consideration. Little action is expected to occur before a decision is made on taxes and the budget.

House Ways and Means Committee members expect to release a recommendation for consideration before the full House in mid-April. The revenue package, along with the FY 14 Budget, would then go to the Senate, where action is expected prior to Memorial Day.

“The Healthcare Commission report and H59 have garnered more attention from retirees and employees than most other issues in recent memory and rightly so. Significant changes to future retiree healthcare benefits are being proposed,” said Association President Ralph White. “However, these issues are not on the minds of the average citizen. The public is concerned about taxes and arguably even more concerned about maintaining our bridges and roads. And, of course education is always on people’s minds.

“Figuring out how to best address these universal problems has to be worked out before the Legislature can turn its attention elsewhere. Besides, taking the time to make sure Retiree Healthcare reform is done right and not rushed through is a good thing. The bottom line is that H59 is not on the fast track toward passage before these other issues are ironed out.”

Click here for information regarding H59 and Retiree Healthcare Reform.

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