Facing a $7.1 million deficit in the upcoming fiscal year, Mayor Joseph A. Curtatone yesterday voiced his support for a controversial measure that would enable cities and towns to control health care costs by limiting unions of the right to bargain for their plans.
The provision, which would enable cities and towns to unilaterally implement changes to health care for municipal employees, was passed by the state House of Representatives by a 111-42 vote late Tuesday night.
If the new rules survive the budget process intact, they would empower Curtatone to set copayments and deductibles for city unions' heath plans. While bargaining remains a part of the process, unions would have a small window to trade offers and consider terms before the mayor could unilaterally move unions to a new plan.
"It's a no-brainer," Curtatone said earlier in the day. "The Legislature is thankfully starting to recognize there is no where else to go."
As the city prepares to submit a budget to the Board of Aldermen in June, Somerville officials project a more than $3.8 million spike in health care costs to the city next fiscal year, which was contrasted with an even sharper decline in state aid, which has fallen more than $27 million from 10 years ago, if projections hold for 2012.
"The deeper the cuts, the longer the recession is going to last," the mayor said. "There's no more hiding on this."
Last year every new dollar collected in increased property tax went to pay for new health care costs, Curtatone said. About $3.9 million in added revenue was raised through the 2 1/2 percent increase in property taxes, but health costs jumped $4.2 million, Curtatone said.
The city's projected 2012 deficit comes after planners narrowly closed an even larger budget gap last year, when Somerville was $8.1 million in the red. To close that shortfall, Curtatone cut 10 jobs, restructured multiple departments, and outsourced some city custodial and street-sweeping services, in addition to other financial maneuvers that saved the city money, said Michael Meehan, city spokesman.
Curtatone's support for the legislative health-care measure comes after an announcement in November that Somerville would explore joining the state GIC, an arduous process that requires all city unions to come to a consensus on the shift.
"That process in inherently a crawl," Curtatone said.
So far the city has met with union representatives seven times, Meehan said, and has fought hard to reframe the debate over the shift in bargaining rights, which have long been essential to union's viability, labor has said.
If city projections hold, Somerville could save more than $10.4 million in the GIC the first year. If the costs are split 80-20 between the city and employees, the city could realize more than $8 million in savings, according to figures released by the city.
Earlier this month, the Metro Mayors Coalition, a group of 13 area municipal leaders including Boston and Somerville, came out in support of the Legislature's plan.
"Its a change in perception as to how you approach management-union relations," Meehan said in a phone interview.
Unions and labor advocates, meanwhile, have said the issue revolves around core bargaining rights that have provided footing for labor relations in the United States for decades.
But Curtatone said that argument is misleading, and that without the new power to mandate health plans, cities such as Somerville would be forced to shed more positions held by union members.
"In the long term we can't sustain 12, 13 percent increases in health care costs," Curtatone said. "We're trying to save those jobs."