In his General Manager’s report this morning, Fred Hansen mentioned to his board that TriMet had been given the Golden Fleece award recently by an unnamed organization (Common Sense Oregon) in recognition of having the most expensive health care costs of any transit district in the nation. He claimed that the radio ads related to the award were inaccurate and misleading, and that TriMet is justified in spending heavily for health care because the work is difficult and physically demanding.
Apparently it was misleading because TriMet does not spend $1,932 per month on health insurance for all current and retired workers as implied by the ads; just some workers.
Technically, he’s correct. As TriMet pointed out in a legislative debate last May, the weighted average cost for family coverage using the PPO or HMO alternatives is “only” $1,761 per month. What a bargain for taxpayers!
After Mr. Hansen’s report, TriMet board member Lynn Lehrbach said he was “proud” to receive the Golden Fleece award because TriMet workers should get the best coverage possible. In fact, he noted, they get the kind of health care coverage that we should all get.
While I understand his desire to open the vault to employees, by his line of thinking, there is no amount that would be too high for taxpayers to bear in order to provide Cadillac coverage. If the monthly premiums went up to $4,000 for TM workers, that would be just fine and we should all just pay.
I’ve read the TriMet audited financial statements. The cost of fringe benefits (including post-employment obligations) has risen from 61% of wages in 2001 to 118% of wages in 2008. The cost of unfunded pension liabilities for union workers went up from 17% of annual payroll in 1983 to 162% of payroll in 2008. These trends can’t continue without substantial cuts in service.
The governor appoints all 7 TriMet board members. Someone on the governor’s staff might want to get engaged before the agency hits that iceberg. It’s pretty visible these days.
John A. Charles, Jr. is President and CEO of Cascade Policy Institute, Oregon’s free market public policy research center.