July 26, 2009

Chicago Tribune – link

Multiple health care proposals are being discussed on Capitol Hill, revised and refined into single proposals in the House and Senate. In the House, three committees have signed off on a reform bill, but the Energy and Commerce Committee has yet to produce its plan, which is likely to feature significant changes. House leaders would like the chamber to vote on a final bill before members leave for August recess. The Senate’s Health, Education, Labor and Pensions Committee has already passed its plan on a party-line vote. A competing plan from the Senate Finance Committee — which must figure out how to cover the cost of reform — is expected within the next two weeks. Once that occurs, the two proposals will be merged by Senate leaders. Below are comparisons of the House bill as it stands and the Senate Health Committee bill.

Senate Health, Education, Labor and Pensions Committee

Most individuals would be required to have qualifying health coverage, with some exceptions. Those who choose not to participate would face a tax penalty of at least 50 percent of the average annual premium cost of the basic plan.

Employers would be required to offer health coverage to workers and pay at least 60 percent of the premium, or pay $750 for each full-time employee not offered coverage. Businesses with 25 or fewer employees would be exempt.

Coverage for individuals and small businesses would be run through state-based “gateways” that would provide consumers with information to help them choose among qualified plans.

Strategies to improve health care services nationwide would include an annual national health care quality report card and the development of quality measures to assess results.

Total cost of the plan is about $1 trillion over 10 years, according to Congressional Budget Office estimates.

House Tri-Committee

Most individuals would be required to have “acceptable health coverage,” with some exceptions. Those who choose not to participate would pay a penalty of 2.5 percent of their modified adjusted gross income up to the cost of the average national premium for individuals or family coverage.

Employers would be required to offer health coverage to workers and pay at least 72.5 percent of the premium for single coverage and 65 percent for family coverage in the lowest-cost qualifying plan, or pay 8 percent of payroll into a health insurance trust fund (smaller employers would pay a reduced amount or nothing).

Individuals and employers would be able to buy coverage through a National Health Insurance Exchange with public and private health plan options. The public option would meet many of the same requirements as private plans and offer basic, enhanced and premium coverage options.

New agencies would be created to study the effectiveness of health care services and to identify and develop health care best practices. Increased Medicaid payments and Medicare bonus payments would be available to primary care providers to improve care coordination.

The total cost of the plan is about $1 trillion over 10 years, about half of which would be covered by Medicare and Medicaid savings, according to the CBO. The remainder would be covered by a surcharge paid by families with incomes above $350,000 and individuals with incomes above $280,000.

Other proposals

The Senate Finance Committee is considering a provision that would allow people ages 55-64 who otherwise wouldn’t qualify for Medicare to “buy in” to the program for a limited time.

Senate Finance Committee members are considering taxing insurance companies as a mechanism for funding the health care plan.

In terms of requiring employers to provide coverage, many Democrats and Republicans want to ensure in final language that small businesses are exempted from having to provide health care or pay a penalty.

Some on the Senate Finance Committee advocate establishing insurance cooperatives, run by and for the benefit of its members, rather than a government-run public option.

Conservative Democrats on the Energy and Commerce panel want rural health care providers to be reimbursed by the government at higher rates, which would help ensure all Americans have access to quality care. Also, the panel is considering an amendment that would have the Centers for Medicare & Medicaid Services monitor doctors, reporting back to them how the cost of their care compares to their peers.

Senate Finance Committee members have considered, but could reject, a proposal that would tax high-end insurance plans offered by employers, which would have the effect of taxing well-off Americans who choose premium care.

In the House, the floor for a surtax on income to pay for health care could be raised to $500,000 for individuals.

The Associated Press looks at some of Obama’s claims in his prime-time news conference

 

AP – link to original article

Wednesday, July 22, 2009

WASHINGTON — President Barack Obama’s assertion Wednesday that government will stay out of health care decisions in an overhauled system is hard to square with the proposals coming out of Congress and with his own rhetoric.

Even now, nearly half the costs of health care in the U.S. are paid for by government at all levels. Federal authority would only grow under any proposal in play.

A look at some of Obama’s claims in his prime-time news conference:

OBAMA: “We already have rough agreement” on some aspects of what a health care overhaul should involve, and one is: “It will keep government out of health care decisions, giving you the option to keep your insurance if you’re happy with it.”

THE FACTS: In House legislation, a commission appointed by the government would determine what is and isn’t covered by insurance plans offered in a new purchasing pool, including a plan sponsored by the government. The bill also holds out the possibility that, over time, those standards could be imposed on all private insurance plans, not just the ones in the pool.

Indeed, Obama went on to lay out other principles of reform that plainly show the government making key decisions in health care. He said insurance companies would be barred from dropping coverage when someone gets too sick, limits would be set on out-of-pocket expenses, and preventive care such as checkups and mammograms would be covered.

It’s true that people would not be forced to give up a private plan and go with a public one. The question is whether all of those private plans would still be in place if the government entered the marketplace in a bigger way.

OBAMA: “I have also pledged that health insurance reform will not add to our deficit over the next decade, and I mean it.”

 

THE FACTS: The president has said repeatedly that he wants “deficit-neutral” health care legislation, meaning that every dollar increase in cost is met with a dollar of new revenue or a dollar of savings. But some things are more neutral than others. White House Budget Director Peter Orszag told reporters this week that the promise does not apply to proposed spending of about $245 billion over the next decade to increase fees for doctors serving Medicare patients. Democrats and the Obama administration argue that the extra payment, designed to prevent a scheduled cut of about 21 percent in doctor fees, already was part of the administration’s policy, with or without a health care overhaul.

 

Beyond that, budget experts have warned about various accounting gimmicks that can mask true burdens on the deficit. The bipartisan Committee for a Responsible Federal Budget lists a variety of them, including back-loading the heaviest costs at the end of the 10-year period and beyond.

Market-based solutions can reduce the national health-care bill by 40%.

Wall Street Journal – link

June 12, 2009

By STEVEN A. BURD

Effective health-care reform must meet two objectives: 1) It must secure coverage for all Americans, and 2) it must dramatically lower the cost of health care. Health-care spending has outpaced the rise in all other consumer spending by nearly a factor of three since 1980, increasing to 18% of GDP in 2009 from 9% of GDP. This disturbing trend will not change regardless of who pays these costs — government or the private sector — unless we can find a way to improve the health of our citizens. Failure to do so will make American companies less competitive in the global marketplace, increase taxes, and undermine our economy.

At Safeway we believe that well-designed health-care reform, utilizing market-based solutions, can ultimately reduce our nation’s health-care bill by 40%. The key to achieving these savings is health-care plans that reward healthy behavior. As a self-insured employer, Safeway designed just such a plan in 2005 and has made continuous improvements each year. The results have been remarkable. During this four-year period, we have kept our per capita health-care costs flat (that includes both the employee and the employer portion), while most American companies’ costs have increased 38% over the same four years.

Safeway’s plan capitalizes on two key insights gained in 2005. The first is that 70% of all health-care costs are the direct result of behavior. The second insight, which is well understood by the providers of health care, is that 74% of all costs are confined to four chronic conditions (cardiovascular disease, cancer, diabetes and obesity). Furthermore, 80% of cardiovascular disease and diabetes is preventable, 60% of cancers are preventable, and more than 90% of obesity is preventable.

As much as we would like to take credit for being a health-care innovator, Safeway has done nothing more than borrow from the well-tested automobile insurance model. For decades, driving behavior has been correlated with accident risk and has therefore translated into premium differences among drivers. Stated somewhat differently, the auto-insurance industry has long recognized the role of personal responsibility. As a result, bad behaviors (like speeding, tickets for failure to follow the rules of the road, and frequency of accidents) are considered when establishing insurance premiums. Bad driver premiums are not subsidized by the good driver premiums.

As with most employers, Safeway’s employees pay a portion of their own health care through premiums, co-pays and deductibles. The big difference between Safeway and most employers is that we have pronounced differences in premiums that reflect each covered member’s behaviors. Our plan utilizes a provision in the 1996 Health Insurance Portability and Accountability Act that permits employers to differentiate premiums based on behaviors. Currently we are focused on tobacco usage, healthy weight, blood pressure and cholesterol levels.

Safeway’s Healthy Measures program is completely voluntary and currently covers 74% of the insured nonunion work force. Employees are tested for the four measures cited above and receive premium discounts off a “base level” premium for each test they pass. Data is collected by outside parties and not shared with company management. If they pass all four tests, annual premiums are reduced $780 for individuals and $1,560 for families. Should they fail any or all tests, they can be tested again in 12 months. If they pass or have made appropriate progress on something like obesity, the company provides a refund equal to the premium differences established at the beginning of the plan year.

At Safeway, we are building a culture of health and fitness. The numbers speak for themselves. Our obesity and smoking rates are roughly 70% of the national average and our health-care costs for four years have been held constant. When surveyed, 78% of our employees rated our plan good, very good or excellent. In addition, 76% asked for more financial incentives to reward healthy behaviors. We have heard from dozens of employees who lost weight, lowered their blood-pressure and cholesterol levels, and are enjoying better health because of this program. Many discovered for the first time that they have high blood pressure, and others have been told by their doctor that they have added years to their life.

Today, we are constrained by current laws from increasing these incentives. We reward plan members $312 per year for not using tobacco, yet the annual cost of insuring a tobacco user is $1,400. Reform legislation needs to raise the federal legal limits so that incentives can better match the true incremental benefit of not engaging in these unhealthy behaviors. If these limits are appropriately increased, I am confident Safeway’s per capita health-care costs will decline for at least another five years as our work force becomes healthier.

The Healthy Measures program currently applies only to our nonunion work force. While we have numerous health and wellness provisions in our union contracts, we are working with union leaders like Joe Hansen of the United Food and Commercial Workers to incorporate healthy measures provisions in our union work force as well.

While comprehensive health-care reform needs to address a number of other key issues, we believe that personal responsibility and financial incentives are the path to a healthier America. By our calculation, if the nation had adopted our approach in 2005, the nation’s direct health-care bill would be $550 billion less than it is today. This is almost four times the $150 billion that most experts estimate to be the cost of covering today’s 47 million uninsured. The implication is that we can achieve health-care reform with universal coverage and declining per capita health-care costs.

There is a very real possibility that we will see positive transformational health-care reform in the near future. I am encouraged by the effort I see on Capitol Hill, particularly the bipartisan effort in the Senate. While some tough issues remain, if we continue to work in a bipartisan manner I believe we will resolve these issues successfully and find agreement on meaningful reform.

 

Mr. Burd is CEO of Safeway Inc., and the founder of the Coalition to Advance Healthcare Reform.

It’s better policy, and politics, than the proliferation of tax credits.

Wall Street Journal – link

 

JULY 14, 2009

By PETER FERRARA

The federal income tax code is now so mangled that we can probably increase federal revenues with a 0% income tax rate for a majority of Americans.

Long before President Barack Obama took office, the bottom 40% of income earners paid no federal income taxes. Because of refundable income tax credits like the Earned Income Tax Credit (EITC), in 2006 these bottom 40% as a group actually received net payments equal to 3.6% of total income tax revenues, according to the latest Congressional Budget Office data. The actual middle class, the middle 20% of income earners, pay only 4.4% of total federal income tax revenues. That means the bottom 60% together pay less than 1% of income tax revenues.

This actually resulted from Republican tax policy going all the way back to the EITC, which was first proposed by Ronald Reagan in his historic 1972 testimony before the Senate Finance Committee on the success of his welfare reforms as governor of California. Besides calling for workfare, Reagan proposed the EITC to offset the burden of Social Security payroll taxes on the poor. As president, Reagan cut and indexed income tax rates across the board and doubled the personal exemption. The Republican majority Congress, led by former House Speaker Newt Gingrich, adopted a child tax credit that President George W. Bush later expanded and made refundable, while also reducing the bottom tax rate by 33% to 10%.

President Bill Clinton expanded the EITC in 1993. But it was primarily Republicans who abolished federal income taxes for the working class and almost abolished them for the middle class. Now Mr. Obama has led enactment of a refundable $400 per worker income tax credit and other refundable credits, which probably leaves the bottom 60% paying nothing as a group on net.

Many conservatives are deeply troubled by this, arguing that everyone should be contributing something to the tax burden. They worry that, not paying for any of the tab, this majority will see no reason not to vote for limitless spending burdens. But are conservatives now going to campaign on increasing taxes on the bottom 60%, arguing that is good tax and social policy? Steve Lonegan recently demonstrated in the New Jersey gubernatorial primary that this is not a viable political position. He proposed a 3% state flat tax which, while very good tax policy, would increase taxes slightly for the bottom half of income earners. His victorious opponent Chris Christie pounded away in advertising on that point.

But what if Republicans proposed a federal tax reform with a 0% income tax rate for the bottom 60% of income earners? With that explicit 0% tax rate framing the issue, abolishing the refundable tax credits that actually ship money to lower income earners through the tax code would become politically viable. Trading an explicit 0% tax rate for the bottom 60% in return for eliminating the refundable tax credits would likely be at least revenue neutral, and probably result in a net increase in revenue.

Such tax reform can and should be combined with overall welfare reform based on work that would ensure an adequate safety net for the poor. Considering the success of the 1996 reform to the Aid to Families with Dependent Children (AFDC) program, further reform could result in huge overall savings. Besides AFDC, there are 85 more federally administered welfare programs that could benefit from reform.

Moreover, we should then be free to adopt sound tax policy for the top 40% of earners who make 75% of total income. Suppose we tax all of the income of those top 40% once with a 15% flat tax? That would be close to revenue neutral on a dynamic basis (i.e. counting work incentive effects).

The usual distribution arguments against such a flat rate would not apply because the bottom 60% would bear a 0% rate. All flat tax proposals effectively try to do the same through generous personal exemptions that are tax neutral for low- and moderate-income workers. But the explicit 0% rate would make the reform more easily understood.

This — rather than adopting still more refundable tax credits as some conservatives are advocating — is also the way to eliminate the distorting tax preference for employer-provided health insurance. For the bottom 60%, there would no longer be any health insurance tax preference, and for the rest the favoritism would be reduced to a minimal 15%. Or the tax exclusion for employer provided health benefits could be eliminated altogether, affecting only the top 40%. The economic distortions caused by every other tax preference in the code would be minimized or eliminated entirely in this same way.

Contrary to the fears of conservatives, this tax system would sharply limit the size of government. No politician would dare suggest imposing income taxes anew on the bottom 60%. While the last two Democratic presidents won by running on a tax cut for the middle class, that game would be over. Instead conservatives can argue for middle-income and working-class votes to protect the 0% tax rate from big government liberals. As the Obama administration will soon learn, higher income earners have flexibility in their taxable income and increasing revenues by raising taxes on them is not easy.

 

Mr. Ferrara is director of entitlement and budget policy for the Institute for Policy Innovation. He served in the White House Office of Policy Development under President Reagan.

By Jeff Jacoby

Globe Columnist / October 19, 2008

Boston Globe – link

THE CHOICE you’ll have,” said Barack Obama during last week’s debate, as he told voters what to expect if John McCain’s health-insurance proposal becomes law, “is having your employer no longer provide you healthcare.

“Don’t take my word for it,” he added. “The US Chamber of Commerce, which generally doesn’t support a lot of Democrats, said that this plan could lead to the unraveling of the employer-based healthcare system.”

If only.

An end to employer-based health insurance is exactly what the American healthcare market needs. Far from being a calamity, it would represent a giant step toward ending the current system’s worst distortions: skyrocketing premiums, lack of insurance portability, widespread ignorance of medical prices, and overconsumption of health services.

With more than 90 percent of private healthcare plans in the United States obtained through employers, it might seem unnatural to get health insurance any other way. But what’s unnatural is the link between healthcare and employment. After all, we don’t rely on employers for auto, homeowners, or life insurance. Those policies we buy in an open market, where numerous insurers and agents compete for our business. Health insurance is different only because of an idiosyncrasy in the tax code dating back 60 years – a good example, to quote Milton Friedman, of how one bad government policy leads to another.

During World War II, federal wage controls barred employers from raising their workers’ salaries, but said nothing about fringe benefits. So firms competing for employees at government-restricted wages began offering medical insurance to sweeten employment offers. Even sweeter was that employers could deduct those benefits as business expenses, yet employees didn’t have to report them as taxable income. For a while the IRS resisted that interpretation, but Congress eventually enshrined the tax-exempt status of employer-based medical insurance in law.

Result: a radical shift in the way Americans paid for medical care. With health benefits tax-free if they were employer-supplied, tens of millions of Americans were soon signing up for medical insurance through work. As tax rates rose, so did the incentive to keep expanding health benefits. No longer was medical insurance reserved for major expenditures like surgery or hospitalization. Americans who would never think of using auto insurance to cover tune-ups and oil changes grew accustomed to having their medical insurer pay for yearly physicals, prescriptions, and other routine expenses.

We thus ended up with a healthcare system in which the vast majority of bills are covered by a third party. With someone else picking up the tab, Americans got used to consuming medical care without regard to price or value. After all, if it was covered by insurance, why not go to the emergency room for a simple sore throat? Why not get the name-brand drug instead of a generic?

Unconstrained by consumer cost-consciousness, healthcare spending has soared, even as overall inflation has remained fairly low. Nevertheless, Americans know almost nothing about the costs of their medical care. (Quick quiz: What does your local hospital charge for an MRI scan? To deliver a baby? To set a broken arm?) When patients think someone else is paying most of their healthcare costs, they feel little pressure to learn what those costs actually are – and providers feel little pressure to compete on price. So prices keep rising, which makes insurance more expensive, which makes Americans ever-more worried about losing their insurance – and ever-more dependent on the benefits provided by their employer.

De-linking medical insurance from employment is the key to reforming healthcare in the United States. McCain proposes to accomplish that by taking the tax deduction away from employers and giving it to employees. With a $5,000 refundable healthcare tax credit, Americans would have a strong inducement to buy their own, more affordable, insurance, rather than relying on their employer’s plan. As millions of empowered consumers began focusing on price, price competition would flourish. And as employers’ healthcare costs declined, most of the savings would return to employees as higher wages.

For 60-plus years, a misguided tax preference for employer-sponsored health insurance has distorted America’s healthcare market. The price of that distortion has been paid in higher costs, fewer choices, and mounting anxiety. The solution is to restore market forces by fixing the tax code, and liberating Americans from an employer-based system that has made everything worse.

 

Jeff Jacoby can be reached at jacoby@globe.com.

Bigger Than Madoff

By Chris Edwards and Tad DeHaven

National Review – link

July 15, 2009.

Every year, criminals and cheats pilfer over $100 billion — that’s $40 billion more than Bernie Madoff scammed off his investors — in federal benefits to which they are not legally entitled. Medicare, Medicaid, food stamps, refundable tax credits, and many other programs are targets for looting. 

Government fraud has been in the news lately because analysts are expecting major abuses of the Obama administration’s $787 billion stimulus plan. One Deloitte expert argued that “swindlers, con men, and thieves could siphon off as much as $50 billion” of stimulus funds, which are vulnerable because policymakers are under pressure to shovel it out the door quickly. 

Even more troubling is the potential for fraud and abuse created by President Obama’s other big spending proposals — particularly his giant health-care plan. Obama wants to inject hundreds of billions more tax dollars into federal health care instead of fundamentally reforming Medicare and Medicaid — broken programs that are already subject to Madoff-sized larceny. That is incredibly unfair to those of us paying the bills.

Take Medicare. The Government Accountability Office reports that the program makes about $17 billion in improper payments each year. And that doesn’t include problems in the new $60-billion-per-year prescription-drug plan, which is a juicy target for criminals. Harvard University’s Malcolm Sparrow, a specialist in health-care fraud, recently testified to Congress that official estimates are “lacking in rigor,” are “comfortingly low and quite misleading,” and exclude many kinds of fraud and abuse. He thinks that as much as 20 percent of the federal health-care budget is consumed by fraud, which would be $85 billion a year for Medicare.

Medicare makes a staggering 1.2 billion electronic payments each year, making it highly vulnerable to cheating by health-care providers and organized-crime rings. Criminals need only fill out the government forms carefully and the “claims will be paid in full and on time, without a hiccup, by a computer, and with no human involvement at all,” according to Sparrow. A perfect example is the recent case of a high-school dropout in Miami who was able to single-handedly bilk Medicare out of $105 million from her laptop by submitting 140,000 separate claims for equipment and services. 

Medicaid is also a huge abuse target. The GAO puts Medicaid fraud at $33 billion — 11 percent of state and federal spending on the program. Again, that is likely a substantial underestimate. A former Medicaid investigator believes that up to 40 percent of New York State’s Medicaid budget is siphoned off in fraud and improper payments, but New York probably has a worse problem than elsewhere. Using Sparrow’s 20 percent estimate instead, Medicaid rip-offs top $60 billion a year nationwide.

How does all this fraud and abuse occur? In many ways, including billing for services and medical equipment not provided, misrepresenting the services provided, and double billing. That last one is common. In one recent case, the University of Medicine and Dentistry of New Jersey double-billed Medicaid repeatedly over the years by directly submitting claims for outpatient physician services, even as doctors working in the hospital’s outpatient centers were submitting their own claims for exactly the same procedures. 

Another trouble spot is Medicaid’s nursing-home benefits, which are meant for people with low incomes and few financial assets. Since nursing homes are expensive, the program creates a big incentive for higher-income families to falsify their status and apply for the benefits. Indeed, a whole industry of financial consultants helps ineligible seniors hide their income and assets so that they qualify. The result is that the program loses about $10 billion a year to fraudulent claims.

The bottom line is that the enormous size and complexity of federal health programs results in a huge waste of taxpayer funds. The inspector general of the Department of Health and Human Services recently told Congress: “Although it is not possible to measure precisely the extent of fraud in Medicare and Medicaid, everywhere it looks the Office of Inspector General continues to find fraud against these programs.”

Medicare and Medicaid are the biggest fraud targets, but this problem plagues all government subsidy programs. Official loss estimates for other programs include: $12 billion for the Earned Income Tax Credit, $5 billion for Supplemental Security Income, and $14 billion for unemployment insurance. All in all, the cost to taxpayers is well over $100 billion a year, which translates into a theft of $1,000 or more from every household in America every year.

We think that there are good policy reasons to dramatically cut Medicare, Medicaid, and other benefit programs. But at the very least, the vast magnitude of graft in these programs should give every policymaker pause before pumping even more taxpayer money into the federal subsidy empire. 

 

— Chris Edwards is the director of tax-policy studies at the Cato Institute and co-author of Global Tax Revolution: The Rise of Tax Competition and the Battle to Defend It. Tad DeHaven is a budget analyst at the Cato Institute.

 

Coral Gables commissioners voted to raise the tax rate to offset a budget shortfall caused by lower property values and higher costs.

 

BY ELAINE DE VALLE

EDEVALLE@GMAIL.COM

 

The Miami Herald - link to original article

 

July 10, 2009.

 

Coral Gables property owners likely will pay more taxes next year — up to more than $500 for an average-priced home — to help offset an approximate $10-million shortfall in the city’s budget.

City Manager Pat Salerno proposed three different tax increases at a budget workshop Wednesday, ranging from $5.65 to $6.245 per $1,000 of taxable property. The current tax rate is $5.25.

Commissioners voted on publishing the $6.25 figure. It doesn’t mean they will go that high when they set the final tax rate in September, but since they cannot go higher than the published rate, they wanted room to maneuver.

The average assessed value of a Coral Gables home in 2009 was $571,388; property taxes on that home would be $2,739 at current rates, after the $50,000 homestead exemption. At the $6.245 proposed rate, taxes on that home would be $3,255. At the $5.65 rate, taxes would be $2,945.

Cities across South Florida are facing budget shortfalls due to higher costs and lower tax bases stemming from falling property values. The result: higher tax rates or substantial cuts in services are anticipated as the budgeting season begins this month. Last week, the county reported a decline of $23.4 billion in 2009 countywide taxable value, or a 9.5 percent decrease when adjusted for new construction.

`IT’S HUGE’

In Coral Gables, the tax base has dropped by about $1 billion, or a 7.5 percent decrease from 2008 to 2009, when adjusted for new construction. Finance Director Don Nelson told commissioners the city’s losses would be $3.5 million higher if last year’s tax rate remained in place.

”It’s huge,” Nelson said.

To help balance the budget, the city is laying off about 40 of its 827 employees through job eliminations, including seven police department positions, 10 in public works and 11 in public service.

Residents also are likely to pay more for nearly everything. Among the fees discussed:

• Garbage pick-up — which is proposed to go from $610 to $685 a year, and expected to generate an additional $800,000.

• Parking on both street meters and in public garages, which would raise another $645,000.

• A fire-assessment fee of $50 per household.

Salerno said the proposed $150.8 million budget had ”many, many moving parts” and that commissioners had never dealt with a budget that had so many new measures at once. He sent notifications last week to people who were identified for possible layoffs, including Assistant Public Works Director Ron Van Eyk; a video production assistant; a staffer in the planning department; two in parking; and three in building and zoning.

WAGE CUTS

The remaining employees will be asked to take a 5 percent wage cut or contribute 5 percent more to their pension, easing the city’s pension contribution, which is about 20 percent of its operating budget and has been ballooning.

Mayor Don Slesnick said that he felt the cuts had been spread out so that not one stakeholder was holding more of the burden.

‘I, for one, will not vote to reduce any employees’ benefits or reduce any numbers if we don’t spread the responsibility,” Slesnick said. “We are all responsible for this city. Every constituent, every resident. We are all residents and employees are part of the family and if we don’t spread this and all share responsibility, we can’t do it.”