Jim McGreevy: A clarification

From Jim McGreevy, October 26, 2006

Subject: Jim Kimmel's Question on Kathie's Blog

Molly -

Could you forward this to Jim Kimmel or give me his email address so I can communicate directly with him?

Jim Kimmel's posting on Kathie's blog indicated an incorrect interpretation of the HCA proposal as I understand it.

If the 5% of Payroll increase for health care is enacted (The HCA Proposal) then the 1% of employer contributions currently being directed to the Health Care Stabilization Fund (HCSF) would be directed back to the pension fund. This results in an improvement to the pension fund's actuarial statistics AND increases the amount going to the HCSF by five times.

The proposal as it is drafted provides that by the end of a five-year phase-in period a full 5% of statewide payroll would be dedicated totally for the HCSF. None of that money could be diverted to the pension fund.

Dennis Leone's response to that question implies that part of the HCA proposal would be diverted to the pension fund. As I have said before, I share Dennis' concern about the payroll growth assumptions.

- Jim