Spending in Stewart Budget Appears to Increase Without Medical Self-Insurance Cut

While freezing education, Republican Mayor Erin Stewart’s proposed budget for the upcoming year appears to increase City Hall spending rather than decrease, when taking account of a cut in Medical Self-Insurance.

Stewart’s budget appears balanced based significantly on cutting the city Medical-Self Insurance Fund, the fund that covers the costs of medical care for city employees, based on a reduced estimate what the Medical-Self Insurance fund expenditures will be that is dramatically lower than the actual costs in prior years.

Stewart was apparently paraphrased in an April 9, 2020 New Britain Herald article as saying that she would, “rather make temporary budget cuts than raise taxes in her budget proposal for 2020-21.” The article goes on to say that, “The mayor’s proposed budget represents a reduction of roughly $8 million from the current fiscal year’s budget.”

That article, based apparently on quotes from Stewart also said that,

Looking ahead, the city will see increases in the following areas: the cost of doing business, contractual obligations, medical self-insurance payments, police and fire pension contributions, and debt payments. These increases will leave the city with a projected $14.7 million hole in the projected fiscal year 2022 budget.

But though the article apparently says that the city will have increased costs in the 2022 budget year in, “medical self-insurance payments,” the primary location of the purported $8 million cut in Stewart’s budget appears to be a drop in the city General Fund contribution to its Medical Self-Insurance Fund.

The cut decreases the General Fund allocation for medical self-insurance from $10,829,828 in the current budget year to just $200,000 in the upcoming budget year, a $10.6 million cut.

Without that cut to Medical-Self Insurance, it appears that Stewart’s budget would actually have a $3 million increase in city spending, rather than a cut.

Meanwhile, Stewart has proposed that the city operating allocation to New Britain schools should receive $0 of new funding in the city budget year that starts July 1, 2020 and ends on June 30, 2021.

Stewart’s budget proposal reduces the overall revenues into the Medical-Self Insurance Fund from $14.2 million budgeted for the current year to $4 million for the upcoming budget year. The fund also receives moneys for employees assigned to other city budget funds, but the General Fund is by far the largest.

The actual expenditures from the Medical Self-Insurance Fund have been between $12.4 and $14.9 million per year between the 2016 and 2019 budget years.

While Stewart’s budget does not project an annual deficit in the fund for the upcoming budget year, she appears to have accomplished that projection by lowering the predicted medical fund expenditures by $10.2 million.

The city departmental prediction for how much costs in this fund cost will be in the upcoming budget year was $13.9 million, similar to the actual expenditure amounts from recent previous years. Stewart’s budget, instead, placed that number at $4 million, $9.9 million less than the departmental estimate.

But the city Medical Self-Insurance Fund appears to have been running a substantial surplus for the past three years.

While the fund apparently had a $5.4 million deficit in the 2016 budget year, the city budget appears to show a total of $11 million more put into the fund than the city actually spent on the employee health care fund between the 2017 and 2019 budget years.

A call-in public hearing has been set on Stewart’s budget for tomorrow, Tuesday, April 28, 2020, at 7:00pm.

The hearing is to be by conference call. The phone number to participate in the hearing is 1-855-369-0463, and the pin to join is 11 303 366#. The Council announcement about the hearing says that at, “6:45 pm call in queue begins.”