Friday, July 6, 2007

School Board Spin

I remember talking to my father some 25 years ago about my perception that the UAW was going to destroy the auto industry. His simple reply stuck with me to this day:

“Perhaps they will, but don’t forget there are two signatures on every contract.”

That popped into my head this morning as I read a rebuttal to an opinion piece I wrote last month
(found by clicking here).

The letter is from Frank Reid, the President of the Michigan Association of School Boards (MASB).

Detroit News: School boards can handle tough decisions (07/06/07)

The piece explains “school boards have held firm on (benefits) and other tough issues at the board table during negotiations”.

Since when?

The article somehow misses the fact that school boards got us into this mess in the first place by putting their signatures on the outrageous contracts that have been approved over the past 10-15 years or more. And they've not done much to correct it ever since.

These contracts are
draining the state budget, and they’re so far out of whack now that "normalizing" them is going to be a long and painful journey.

I don't mean to suggest all school boards have been irresponsible, or that none are trying to fix these sins of the past. But the overwhelming majority deserve much closer scrutiny than they've been getting. And taxpayers need to start rejecting the spin that comes from school boards.

The article claims that “about half of the approximately 600 Michigan school districts have negotiated "less generous" health care packages for their employees”, but doesn't provide any specifics. That statement could be quite misleading, in part because it's only relative to the "overly generous" packages that school boards have been approving for 10-15 years or more.

Rochester, for example, approved a contract with a so-called "less generous" health care package in its recent settlement with its teacher’s union. The projected savings – after the projected 10% annual increase – equals $150,000 of the $10,000,000 health care tab for it’s 880 teachers and their families. Progress, yes, but hardly a significant step.

What the article fails to recognize is that taxpayers want reasonable, responsible, and meaningful reform, not token steps.

Mr. Reid - also a Trustee for Farmington Public Schools - points out that Farmington moved to a self-insured plan that “benefits taxpayers and still delivers high quality benefits to employees”. Rochester is also self-insured. But being self-insured – rather than having MESSA, the MEA-backed insurance plan – only saves districts from paying the inflated administrative costs of MESSA, which might amount to a one-time reduction of 5%, but does nothing to curb annual increases. The real problem is the level of benefits offered, and whether a district is self-insured or has MESSA doesn’t really impact the 90 percent of the cost driven by those benefit levels.

Unfortunately, the article does not reveal the average per-employee cost of Farmington’s insurance, so we really don’t know how prudent the Farmington board has been with taxpayer funds.

If it’s like most Oakland County school insurance plans, then it’s costing taxpayers 25% more than the average cost of private-sector benefits, and is increasing at a rate of 10% or more annually.

The article attempts to lead us to believe this “trend” towards “less generous benefit package(s)” is having some sort of impact, but the cost of benefits – both health and retirement – consumed 21% of education spending in 2000-01, and 25% in 2004-05.

Sadly, this letter simply shows how out of touch school boards are with reality. They need to stop trying to convince themselves that they’re making progress, and start taking real and meaningful steps to control their budgets.

Otherwise, any funding increases will continue to be funneled into benefits rather than curriculum development and other learning intervention strategies.


In case the link doesn't work, I've pasted the full opinion piece below:

Friday, July 06, 2007
School boards can handle tough decisions

I would like to respond to a June 19 column regarding school boards' inability to negotiate: ("Teacher health reforms aren't worth tax hike").

The current trend in reform in school districts is to move to a less generous benefit package and smaller salary increases. Many school boards have held firm on this and other tough issues at the board table during negotiations; to assert otherwise is incorrect. The education management community, including the Michigan Association of School Boards (MASB), believes that it's important to explore all possible reforms before going to the public with a tax increase. I applaud any efforts by the legislature to address both revenue and school reform measures.

The writer implies that a May election date contributes to low voter turnout and union-endorsed candidates, but interest group participation occurs in any election, no matter what time of year it happens.

Some years ago, Farmington Public Schools was able to negotiate a self-insured plan that benefits taxpayers and still delivers high quality benefits to employees. In fact, about half of the approximately 600 Michigan school districts have negotiated less expensive health care packages for their employees. MASB supports school districts gaining access and using claims data to make meaningful decisions regarding benefits. MASB also supports legislative efforts to address problems in the current structure of school district legacy costs, retirement and retirement health care, for those coming into education professions.

Frank Reid
President, Michigan Association of School Boards
Board Member - Farmington Public Schools

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