Agenda Packets - 1986/11/03 - Laserfiche WebLink

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FL-T. Medicare Deductions for City Employees Congress extended the requirement for Medicare coverage to all newly hired state and local employees, including city election judges, as of April 1, 1986, as part of the FFY'86 budget reconcilliation prccers. Expanding mandatory participation in Medicare for remaining city (and other state and local) employees amounts to levying a new payroll tax. When coupled with deep cuts already made in federal funds to cities for FFY'87, such extended coverage requirements would have an immediate and serious fiscal impact on cities. Application of such a comprehensive mandate has presented cities with unexpected difficulties. Responsibilities for the conduct of elections, for example, is likely to become not only more expenaive but also more difficult to recruit and retain elections judges who will be required to have, Medicare deductions made from their modest level of payment for an essential local government function. Anticipated federal income tax cuts to middle -income employees would be largely wiped out by such requirements. The proposal would more than offset the tax cut anticipated by the four to five million people not currently participating in Medicare. It is estimated that the '8'I cost nationally to state and local government will be $395 million, with an additional $395 million in tax increases for employees. In Minnesota, based on 1985 payroll figures, projected total city payroll cost increases would be at least $14 million next year.