Clayton Town Manager Steve Biggs says he has little choice but to recommend a property-tax increase for the fiscal year ahead. We think the manager does have a choice; it’s just one he finds distasteful.
Mr. Biggs blames his proposed tax increase in part on the rising cost of health-insurance premiums for town employees. To cover those higher premiums – tied to higher claims – the town manager proposes to raise Clayton’s property-tax rate by 2.5 cents to 55 cents per $100 valuation.
In other words, to continue a generous benefit for employees, Mr. Biggs proposes to take more money out of the pockets of Clayton families and shopkeepers. Never mind that those families and business owners might be facing higher insurance premiums themselves.
Granted, the tax increase isn’t a lot of money – just $50 on a house valued at $200,000. But that’s $50 families will spend on someone else’s health insurance instead of on school supplies or a night at the movies. For businesses with higher property values, the tax hike could delay a new hire or an equipment purchase.
The alternative that Mr. Biggs finds distasteful is to ask Town of Clayton employees to share in the cost of insuring themselves. In case you didn’t know, town employees pay nothing for health insurance; taxpayers pick up the entire tab.
We get why Mr. Biggs doesn’t want to change. Free health insurance gives Clayton an edge over the private sector in recruiting and retaining good employees. Free health insurance also keeps Clayton competitive in hiring with other towns, which tend to offer free insurance too.
Ultimately, we think, such benefits are unsustainable, in part because they tend to follow employees into retirement. Already, pension and benefit obligations are coming at the expense of basic services in many large cities.
We’d be less inclined to call for change here if Mr. Biggs could continue to offer free health insurance without a tax increase. But he can’t, and unfortunately, the Town Council appears unlikely to place taxpayer interests ahead of employee perks.
The losers, of course, will be Clayton residents and business owners. Perhaps they can land jobs with the town. The good news is Clayton is hiring; the proposed budget includes 12 new positions, 10 of them full time.