Proposed Ledyard budget to have smaller tax increase

Changing health care plans resulted in $1 million cut

Ledyard — Good news for residents: The proposed 201819 budget, which will be voted on May 22, just got a bit more palatable.

The Town Council on Thursday night unanimously approved a new proposed 201819 budget, which is about $1 million less than the previous proposal and carries a smaller tax increase.

The original proposed budget, which was filed back in March and already had a public hearing, called for $56.5 million school and general government spending that would have carried about a 2.7-mill increase. However, under this new proposed budget, that tax hike drops to about 1.75 mills, instead.

The decrease didn’t require any additional cuts; instead, it was driven entirely by a change in the town’s health insurance plan across all its bargaining units.

Currently the town’s health insurance plan is self-funded, meaning any time there is a claim, Ledyard is responsible for paying it. So every year, town officials would set aside money based on their projection of how many claims they’d expect. On top of that, the town pays a fee to Anthem to manage the claim process.

Ledyard has been under this plan for at least the last 10 years because, historically, self-funding was more affordable. However, under the state’s new Partnership Plan 2.0, that no longer would be the case, said Bill Saums, chair of the Town Council Finance Committee.

In fact, the cost under the state plan would be approximately $1 million less for the town and less expensive for employees, he said.

“We’ve been working on this for a long time,” Saums said. “We knew it was a possibility, but you can’t just change health care plans, you have to reach out to the unions.”

Finance Director Marcia Hancock said that the reason the rates for the state plan are less costly is because the plan requires preauthorization on many services and there is a far larger pool of people enrolled in the plan.

Originally, when the state plan came out, two of the town’s bargaining units proposed converting to it, saying it would be better for employees and cheaper for the town, Saums said. However, initially town officials were skeptical. But after talking with their insurance advisers many months later, the advisers told them the same thing and encouraged them to consider making the switch.

So councilors began broaching the subject with all of the bargaining units, and everyone agreed.

"Everybody wins," Saums said. "Employees save money and the town saves money."