Battles over health insurance, wages keep sides from settling.

Byline: ANALYSIS By Christian Wihtol The Register-Guard

Confused about whose side to take in the LTD strike?

That's not surprising. As in many labor disputes, the details are convoluted.

But the big picture is fairly clear: Health care insurance costs are ballooning, for LTD and for employers nationwide. The agency is shifting some of that increase onto employees by going to a new plan that requires workers to cover co-pays, out-of-pocket deductibles and other expenses - costs they've never faced before.

The workers are unhappy enough to strike, something they've never done in 35 years.

How much money are we talking about?

To keep its old insurance plan for the 236 workers covered by the union would cost LTD about $2.8 million in the current year, according to a detailed analysis LTD has posted on its Web site, www.ltd.org. That's up from about $2 million last year. The old insurance plan covered all employee health care expenses.

The plan LTD is switching to would still cost LTD a lot: about $2.3 million a year in insurance premiums that LTD would pay, plus about $165,000 a year in LTD payments to unionized employees' health accounts - something that would be set up under the new plan. Employees could use that money to pay for some of their health care costs.

So, LTD's total cost under the new system would be about $2.46 million a year. That's about $340,000 a year short of what it would cost to continue the old full coverage. Extend that over the life of a three-year labor contract, and it becomes a $1 million dispute.

Under the new plan, workers face maximum out-of-pocket expenses up to $1,500 per individual or $3,000 per family; a $500 deductible per employee and $1,500 per family; $15 co-pays for most office visits; and $15 to $30 payments on prescriptions.

The financial effect would vary, depending in large part on how much workers or their families get sick or injured. It could easily total hundreds of dollars a year per worker.

The union stresses that LTD has plenty of cash and could handily continue covering all employee health care costs.

Certainly, the agency's general fund - the main budget that covers daily operations - is flush. At the start of the current fiscal year, it had an $8.2 million surplus - essentially the accumulated operating surpluses of years past. Every year for at least a decade, LTD's operations have generated an annual surplus of anywhere from $1 million to $4 million.

In the current fiscal year, operating revenue - the payroll tax paid by employers in the district, plus fares - is budgeted at $26.4 million, while operating expenses - largely personnel costs - are much lower, at $24.2 million.

But LTD's management and board of directors say they need to conserve the surpluses carefully, because they are crucial in expanding LTD service.

LTD plans to implement bus rapid transit across the metro area. The first line is from downtown Eugene to downtown Springfield. Cost: $20 million.

Then will come a link from downtown Springfield along Pioneer Parkway to Gateway Mall and the planned RiverBend hospital. Cost: perhaps $40 million.

The next link would be from downtown Eugene, along Coburg Road and into Springfield. Cost: unknown, but likely many tens of millions of dollars.

For each of these projects, 20 percent of the money must come from LTD's own operating coffers, with the balance from federal and state sources.

So, to protect its operating surpluses for future use on capital projects, LTD says it's willing to let personnel costs - wages and health insurance - increase only about the same rate as its main revenue source - the payroll tax. That's about 4 percent a year. LTD says its proposed health care program would keep to that target.

Aside from the health care dispute, the sides are at odds over wages, too.

LTD has proposed annual pay hikes averaging 1.5 percent a year for three years. For an LTD worker making $17 an hour - not atypical at LTD - that comes to $530 a year.

Workers are seeking hikes averaging 2 percent a year - or $707 a year for a $17-an-hour worker.

LTD says its pay offer is reasonable, given existing low inflation. But workers say the pay hike doesn't cover the probable cost of all the new health care expenses they'll be facing, let alone provide a decent cost-of-living increase.