How a Conn. Mayor Turned Deficit to Surplus in 3 Years

When New Britain, Conn., Mayor Erin Stewart took office, she reduced public employee healthcare costs. The current HSAs are saving the city $6 million.

2017-01-Erin-Stewart_AP.jpg

When the nation’s youngest mayor took office three years ago, she inherited a $19 million operating deficit for Fiscal Year 2014, according to Newsmax. Today, the city of New Britain, Conn., has a $15 million surplus. She reversed the city’s fortunes by:

  • Reducing the number of city employees
  • Increasing taxes moderately
  • Shifting public employee healthcare benefits to Health Savings Account (HSAs)

Lowering Healthcare Costs with HSAs

“We will have a $6 million savings over the [four-year] life of the contracts,” said Stewart.

In order to make changes, Stewart reportedly met with the union, the American Federation of State, County and Municipal Employees (AFSCME) chapter, numerous times in order to work out a compromise and avoid heated opposition.

This was the end result of sitting down with the union leaders and explaining the benefits of getting rid of our old [city-provided] healthcare plan. The most difficult part of all was convincing people to go for the unknown. Hey, it was hard for me putting a larger portion of my paycheck into a brand new means of healthcare,” said Stewart.

Despite an impending Federal repeal of the Affordable Care Act, Stewart said she believes HSAs are going to have to be part of a healthcare solution for all, not just public employee healthcare.

“They work for me and a lot of others. And they save money,” she said.

Employees and sometimes employers contribute to HSAs with pre-tax dollars, which employees use to pay for eligible medical expenses. HSA funds roll over from year to year.

Upcomimg Bond Debt Challenge

Although New Britain now has a surplus, Stewart said she will not be able to lower taxes because the previous three mayors -- including her father, Tim Stewart, New Britain’s mayor from 2003 to 2011 -- floated bonds.

“We’re going to end this fiscal year in the black, but an outstanding debt is projected because more than $25 million in bonds are maturing. Someone’s got to pay it off.”

Floating bonds to pay for the city’s needs “is not a good practice, and as a result of the last three mayors kicking the can down the road, I have to make the hard decisions,” she said.

Read the original story on the Newsmax website.

Learn more about HSAs on HSA Resources website.

Andrea Fox is Editor of Gov1.com and Senior Editor at Lexipol. She is based in Massachusetts.

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