Nashua’s Health Care Costs Are Rising 20%, or $6 Million Over Just 2 years
We are in a time when health care costs are a state of instability across the nation.
Nashua is not immune from this instability.
Nashua’s health care costs for City employees are rising 20% - or $6 million - over
just 2 years. The increase this year (Fiscal 2020) is a $3.3 million increase or 11%
for a total health care budget of $33 million. Our experts project that health care
costs for next year (Fiscal Year 2021) will rise another 8.6% which will amount to
an almost $2.9 budget million increase — raising the City’s total health care budget
to about $36 million.
As a result, I believe City government must take the rising costs of health care into
account in considering long-term union contracts in order to keep tax rate increases
to a level that Nashuans can afford. As approved by the Board of Aldermen, R-18-
102 is multi-year contract which commits the City to significant additional costs
before we know what will be happening with health care costs 2, 3, or 4 years from
now.
To put this in perspective, a $6 million increase in health care costs equates to a
3% increase in the City’s tax rate.
In Order to Keep Tax Increases to a Minimum, I Have Urged that
Annual Raises be Limited to the 2% Cost of Living
The Civilian Contract is a long-term 4-year agreement which grants a series of
above the cost of living 3% annual raises at the same time when health care costs
are rising rapidly. I asked the Board to consider under current conditions limiting
raises to the cost of living or 2% per year.
Under the Nashua City Charter the primary responsibility of the Mayor is to
propose an annual City budget. I take this responsibility to mean that I must strike
the right balance between spending on quality services for our citizens plus fair
wages for our city employees, on the one hand, and arriving at a tax rate that our
citizens can afford, on the other hand.
