Establish a "Prevailing Benefit" Cap for Schools

Senator Mike Bishop offered the following opinion piece:

Detroit Free Press: Add competition to public benefits system (06/21/07)

In it, he reminds readers of the The Public Employee Health Benefits Act, which Senate Republicans proposed in an attempt to drive competition in public sector benefits through the use of pooling, and through access to claims data.

This is truly a needed reform. Responsible leaders on school boards could use this as a first step in trying to wrestle control of school health care costs.

A legitimate concern, though, is that many school boards might not act responsibly. I write about that concern in a Detroit News opinion piece that coincidentally ran one day earlier. The article can be found in my blog entry here.

For example, schools had the opportunity to move their elections to November, but chose to keep them in May. The annual cost of these elections in Oakland County alone has been totaling approximately $1 million, which is money that belongs in the classroom. Despite what would appear to be a no-brainer decision to move to November elections, school boards have been able to concoct a variety of weak excuses for maintaining May elections. With nobody watching, many continue to get away with it.

Likewise, with this legislation, boards could solicit their required four bids, but the benefits would remain a negotiated item, subject to collective bargaining with the MEA. School boards will likely offer weak excuses about why they need to (or are being forced to) stick with coverage that provides excessive benefits. Again, with nobody holding boards accountable we run the risk of seeing the same poor decision-making pattern be repeated.

But all things considered, Majority Leader Bishop and the Senate Republicans earn high marks in my book for making this good first step. Hopefully it’ll prod school boards into making responsible decisions. Or, if they don't, it may at least cast a spotlight on the types of poor business decisions that have gotten schools into the financial crisis they presently face.

And Bishop also points out that he and his team are continuing to explore other measures as well that can bring long-term structural reform.

A great option would be to create a "prevailing benefit" cap, which would limit public sector benefits to the levels found in local communities. This should be a familiar concept to the unions, which have ardently supported provisions in public sector construction contracts that require districts to pay the "prevailing wage". What's good for the goose...!