A bill that would have the state pay 45 percent of health insurance costs for retired municipal police and firefighters until they go on Medicare could cost up to four times the amount originally projected and will add $85 to $100 million to the state’s long-term debt.

“We just can’t take on more debt and with this plan we will,” said Rep. Joe Brannigan, D-Portland, in a speech on the House floor last week. Brannigan, the co-chair of the Appropriations Committee, said he had just been handed figures saying that instead of $7 or $8 million the plan would cost $35 million in the next biennium.

Brannigan said the state already has an un-funded liability of $1.2 billion for the health insurance of retired state workers and teachers, and adding to that debt would be irresponsible.

The House went on to adopt the proposal 73-70, but then turned around and amended it by a vote of 84-61, requiring the insurance plan to be self-funded and delaying any benefits until 2012.

Rep. Darren Hall, R-Holden, a member of the Labor Committee, offered the amendment, saying what police and firefighters were looking for should really be up to the municipalities that hire them.

“Let me remind you again that these are municipal employees,” he said to his fellow legislators.

The Senate rejected the amendment and then endorsed the state-funded version of the plan 21-14. The bill comes back for another round of votes next week.

Its real cost in the next biennium is somewhere between the $7 million originally estimated and the $35 million that actuaries working for the state are projecting, according to Becky Wyke, the governor’s commissioner of finance. Wyke is working to come up with more accurate numbers for legislators when they return.

The long-term cost or un-funded liability of between $85 and $100 million is a reasonable estimate, Wyke said. If the bill is passed, the state would need to find a way to start paying down those costs along with $1.2 billion for retired teachers and state workers.

Right now the state is on a pay-as-you-go basis for health insurance, but has not saved for the long-term debt associated with paying health benefits when workers retire.

The bill calls for opening up a benefit similar to what teachers get now for an estimated 2,400 police and firefighters and 2,000 retirees. The state would pay 45 percent of their health insurance premium between the time they leave service and when they turn 65 and are eligible for Medicare.

Active duty officers and firefighters would contribute 1.5 percent of their salary as of January to help build up the coverage pool, but benefits for those who already are retired would start in July of 2007.

Wyke said one of the big unknowns is how many police and firefighters would retire early if the benefit were in place. Many communities allow police and firefighters to retire with a pension after 25 years of service. Proponents of the bill argue that many firefighters, in particular, are staying on the job too long because they can’t afford to lose their health coverage.

The more that retire early the higher the cost of the benefit, Wyke said.

But, a high price tag may not stop legislators from voting for police and firefighters in an election year.

Brannigan said some legislators had approached him and asked, “Can we vote for this (on the floor) and kill it on the table,” referring to a process where popular bills with high costs attached are sent to the Appropriations Committee and killed for lack of available funds.

Rep. Stephen Bowen, R-Rockport, who also sits on the Appropriations Committee, urged his colleagues to vote against the bill.

“We’re about to approve legislation that is very costly, but we’re not going to pay for it. We didn’t decide what program was going to get cut,” he said.

“Some future generation, they’re the ones that are going to have to say no,” Bowen said, adding, “I can’t imagine what the state budget is going to look like in 20 or 25 years.”


Only subscribers are eligible to post comments. Please subscribe or to participate in the conversation. Here’s why.

Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.