States, localities seek ways to trim health care costs for employees, retirees

Officials in Providence, R.I., and Iowa propose changes in health benefits. New York City Mayor Michael Bloomberg says he'll use health care reserve fund dollars to make up a shortfall.

The New York Times: Mayor Of Providence Seeks Urgent Steps In City's Financial Crisis
Mayor Angel Taveras, a Democrat, outlined plans to reduce pensions for retired municipal workers and vowed to appeal a recent state court ruling preventing the city from forcing its retirees to switch to the federal Medicare health insurance program when they turned 65. He also called for bigger contributions from major tax-exempt universities and hospitals in Providence (Bidgood and Goodnough, 2/2).

The Associated Press/Washington Post: Mayor Says Providence Could Face Bankruptcy Without Retiree Benefit Cuts, Nonprofit Payments
Mayor Angel Taveras painted a bleak picture Thursday of the city's finances, saying Providence faces "devastation" and could go bankrupt if retiree benefits aren't cut and tax-exempt institutions like Brown University don't pay more in lieu of taxes. Taveras said he cut a projected $110 million deficit for the current fiscal year to less than $30 million but that the city is on track to run out of money by June. He said taxpayers and city workers have already sacrificed -; taxes and fees have gone up, several schools were closed and there are 200 fewer people on the city's payroll compared to a year ago -; and he called on retirees and nonprofit hospitals and universities to do the same (2/2).

Des Moines Register: State Workers Should Pay $2,400 A Year In Health Premiums, Republicans Say
Iowa's state employees would pay $2,400 a year in health care premiums under a budget proposal released today by House and Senate Republicans. The proposal, however, has little chance of being enacted for the upcoming fiscal year because of legal limitations between the state and union employees, Republicans conceded. ... Most state employees – including lawmakers and their families – pay no health care premium (Clayworth, 2/2).

The New York Times: As Fiscal Cloud Lifts, Mayor Offers A Budget Free Of Tax Increases Or Broad Layoffs
Mr. Bloomberg said costs that the city could not control, like those of pensions, health care, Medicaid and debt service, would increase by $2 billion, or 7.5 percent. But he said he would balance the budget in part by drawing on money from a health care reserve fund and money expected from the sale of new taxi medallions. City expenditures would shrink by $437 million (Chen, 2/2).