Monday, March 26, 2018

A one-year, $200 million bond bill for the Chapter 90 local road and bridge program, filed by Gov. Charlie Baker on Feb. 13, is moving through the legislative process.
The Joint Committee on Transportation reported out the legislation in mid-March, after hearings on the bill (H. 4237) had to be cancelled due to weather.
In a letter to the Transportation Committee, the MMA urged legislators to pass a multi-year, $300 million Chapter 90 bond bill, and to do so “as soon as possible, so that the measure can be signed into law by the April 1 deadline, and cities and towns can begin the construction season on time.”
The MMA presented similar testimony at a March 22 hearing before the House Committee on Bonding, Capital Expenditures and State Assets.
The Bonding Committee gave the $200 million bill a favorable report, and the full House was expected to take up the bill in the first week of April. The bill will then be sent to the Senate, which will have to pass it before it goes to the governor’s desk.
The MMA has long supported and advocated for a substantial increase in the Chapter 90 program, which helps cities and towns fund qualifying road and bridge maintenance projects that are key to economic development and quality of life.
Local officials argue that a multi-year Chapter 90 bill would allow communities to plan more effectively at the local level by bringing predictability and certainty regarding funding authorizations and timing. Communities are able to design multi-year projects and implement pavement management plans more effectively when they know what their Chapter 90 authorizations will be in future years.
A statewide survey conducted by the MMA in 2014 shows that cities and towns need at least $639 million per year in order to maintain roads in a state of good repair. Cities and towns are responsible for maintaining 30,000 miles of local roads.
Lt. Gov. Karyn Polito discussed the filing of the legislation at the Feb. 14 meeting of the Local Government Advisory Commission, saying that the request would bring the total amount of Chapter 90 funds released by the administration since January 2015 to $900 million.

On Jan. 22, President Donald Trump signed a short-term federal spending bill that included another two-year delay of the “Cadillac tax” on employer-sponsored health plans.
The excise tax, created as part of the Affordable Care Act, was originally due to take effect in 2018, but has been delayed twice, now until 2022.
Despite a further delay of its implementation and talk of possibly repealing the tax, municipal employers are advised to continue to factor the tax into health plan design decisions.
The tax was intended as a health cost-control mechanism that would discourage employers from offering high-cost health plans. The Cadillac tax will assess a 40 percent annual excise on individual health plans that cost more than $10,200 per year and family plans that cost more than $27,500.
Massachusetts municipal employers are likely to reach these thresholds in greater numbers than employers in other regions of the country, due to the higher cost of health care here, the use of benefit plans to attract and retain top-notch employees, and the plans that municipal labor unions have negotiated through collective bargaining. The tax thresholds will rise more slowly than health care inflation, meaning that more plans will be subject to the tax over time.
In an effort to manage health insurance costs and avoid the Cadillac tax, municipal employers may pursue higher copays and deductibles, the initiation of co-insurance, the elimination of high-cost plans, a phase-out of flexible spending accounts, health savings accounts and health reimbursement accounts, and the adoption of lower-cost limited network plans.
There is bipartisan support in Congress for repealing the Cadillac tax, but there is no consensus yet on how to replace the revenue that would be lost from a repeal.