Cambridge to offset federal gay marriage tax for city employees

June 08, 2011|By Brock Parker. Town Correspondent, Globe Staff

By Brock Parker. Town Correspondent

In a move that may be the first of its kind in the country, Cambridge will soon begin making payments to same-sex married public employees to defray the cost of what local officials have called a discriminatory federal tax.

Beginning in July, the city will begin paying quarterly stipends to city employees in a same-sex marriage who must pay federal taxes on the value of the health benefits their spouse receives from the city.

Federal law requires employers to calculate the value of the benefits received by a same-sex spouse as taxable income to the employee, but health benefits for opposite sex spouses of employees are not taxable.

The city, which in 2004 was the first in the nation to offer same-sex marriage licenses, currently provides health and or dental insurance benefits to the spouses of 22 city and school department employees who are married to a partner of the same sex, according to city Personnel Director Michael Gardner. The stipend will cost the city an estimated $33,000 per year once it is fully implemented.

While a number of private employers, such as Google, already offer an additional stipend or payment to same-sex married employees to defray the cost of the federal tax, Cambridge is believed to be the first municipality in the nation to do so, said Sarah Warbelow, of the Human Rights Campaign (HRC), a national lesbian, gay, bisexual and transgender civil rights organization.

“To the best of my knowledge, yes [Cambridge is the first]” said Warbelow, who is the state legislative director for the HRC. “Nobody else is doing this at this point.”

The federal tax costs same-sex married families as much as $1,500 to $3,000 a year that couples of the opposite sex do not have to pay, officials said.

“Having marriage equality yet an unequal tax burden keeps [gay, lesbian, bi-sexual and transgender] married couples on the margins, and marginalization in a lot of ways is seen as a level of discrimination,” said City Councilor Denise Simmons who is gay and was mayor of Cambridge from 2008-2009.

Simmons co-sponsored an order in January asking City Manager Robert Healy to propose a plan to for Cambridge to carry the burden of the “discriminatory taxation” on the same-sex married couples. In a recent interview, she said the stipend program the city ultimately included in its budget for the upcoming fiscal year does not carry an egregious cost, but will make a difference in the lives of employees.

“It’s a wonderful way to say that you value your workforce,” said Jeff Walker, a member of the city’s Gay, Lesbian, Bi-sexual and Transgender Commission (GLBT). “It seemed like an important thing to do.”

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