2/6/08

Gov't unions deny pushing up health-care costs

Leaders of two city unions yesterday blasted a recent report by the Pew Charitable Trusts, which said the rising cost of benefits for Philadelphia workers could financially cripple the city.

"It's a beat-up-on-the-employees report," said Cathy Scott, president of the American Federation of State, County and Municipal Employees District Council 47, which represents the city's white-collar workers. Scott was joined by Brian McBride, president of Local 22, the firefighters union. AFSCME 47 and Local 22 are two of the four city unions whose contracts expire in June. Talks have not yet started with the Nutter administration.

Both unions yesterday spoke out against the report released last month by Pew and the Economy League of Greater Philadelphia, authored by Katherine Barrett and Richard Greene.

The study concluded that union benefit costs are higher in Philadelphia than in most other cities and are rising at an alarming rate. The authors said that the city should consider taking more control over the four union health funds, and could reduce pension costs by raising the retirement age or shifting to 401(k) plans.

"This was put out for a reason - to mislead the public and opinion-makers," said Deborah Willig, of the Center City law firm Willig, Williams & Davidson, which has represented AFSCME 47 for 30 years and Local 22 for 21 years.

The union leaders said that the study did not provide complete information on the management of the health-care funds or the cost-saving measures the unions are taking.

Report author Katherine Barrett and researcher David Thornburgh, of Econsult, said that they had requested interviews with the union presidents for the study and were turned down.

And Pew's managing director of information and civic initiatives, Don Kimelman, said that the focus of the report - the rising costs - is not in question.

"You can argue small points here," Kimelman said. "The big point is the big and rising costs and how do we handle them."

The unions took issue with the suggestion that the health-care funds might be better managed if all four individual funds were combined and the city had more control.

Wendy Pongracz, a partner in Willig's firm who serves as counsel to the union's health and welfare funds, said that the funds are carefully controlled by boards with city and union representation. She also said that administrative costs make up less than 5 percent of the health-fund budgets.

"It makes it sound like the city pours gallons of money into the unions who then waste it," she said.

Willig noted that there was no proof that the city would do a better job managing the funds.

"They have been saying we could save money since Rendell came into office," she said. "When it's time for them to put the evidence on the table, they can't prove it." *

(philly.com)

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