Milwaukee Teachers Union Holding Out for Federal Cash

Published July 26, 2010

The Milwaukee Teachers’ Education Association dismisses as “simply false” reports that Milwaukee taxpayers could save $47 million a year by renegotiating the teachers’ health insurance plan.

In a July 7 editorial denouncing the federal government’s proposed $23 billion public school teachers’ bailout, The Wall Street Journal said the Milwaukee situation provides a “microcosm of union intransigence” that explains why the bailout is a bad idea.

School district officials have been trying to persuade teachers to accept a less-expensive health insurance plan they say could save nearly 500 teaching jobs plus students’ extracurricular activities.

MTEA spokeswoman Kris Collett provided a statement quoting MTEA President Mike Langyel: “Unfortunately, casual observers of the negotiations process in Milwaukee have been led to believe the district could save $47 million if teachers here agreed to a significant dismantling of their compensation package. These claims are simply false.” No further refutation is provided.
Crunched Numbers
Those “casual observers” include the Milwaukee Public School system and the MacIver Institute, the Wisconsin-based free-market think tank cited in the WSJ editorial. MacIver had reported on MTEA’s refusal to reduce teachers’ health benefits in order to save teachers’ jobs.
“The MacIver Institute published the Milwaukee Public Schools (MPS)
Administration’s math on how nearly $48 million dollars in health insurance savings could be achieved,” notes MacIver President Brett Healy.

“Taxpayers now know that the union’s assertion that this is ‘a significant dismantling of their compensation package’ is purely posturing and out of touch with what the rest of the public is experiencing right now in these rocky economic times,” Healy said. “Everyone else is being asked to give up salary increases, pay more for their health insurance, and make other financial sacrifices in order to keep their job and to help private businesses stay afloat.

“For MTEA to think that somehow they are immune to the current fiscal challenges shows how out of touch they are,” he added.

“The reality is we cannot sustain the current system without major structural change,” said MPS Board President Michael Bonds in a Milwaukee Journal Sentinel article about the district’s decision to lay off 482 teachers. “We could literally save hundreds of jobs with the stroke of a pen if teachers switched to a lower-cost healthcare plan.”

The school system’s own numbers, as reported by MacIver, reveal the cost difference between the teachers’ current Preferred Provider Organization (PPO) and the proposed Exclusive Provider Organization (EPO) is $4,512 for single plans and $7,380 for family plans.

MPS currently pays for 2,610 single PPOs and 4,810 family PPOs. Switching plans, therefore, would save MPS $11,776,320 on single plans and $35,497,800 on family plans, for a total savings of $47.3 million. With annual salary and compensation costs currently at about $100,000 per teacher, $47.3 million could pay for some 472 positions.

MTEA, however, insists that the switch in plans would save only $7 million, salvaging no more than 50 teacher jobs. The union has not explained how it arrived at those numbers.

‘Lessons for Country’
“The Milwaukee situation has lessons for the rest of the country and the national debate,” said Healy. “There are local solutions to the fiscal crisis that do not require another federal bailout and more debt piled on our children and our grandchildren. Congress needs the courage to say ‘the country simply cannot afford another bailout’ and tell the union bosses ‘no’.”

“The idea of bailing out whatever class of jobs—teachers, police, or other industries—is basically a thinly veiled attempt to bail out states and prevent them from making the decisions they need to make to rein in their costs,” said Congressman Paul Ryan (R-WI).

“It’s been a really troubling progression, as we’ve gone from bailing out big companies to bailing out big governments,” he added.” If you take a look at the stimulus, the goal was not incentives for small business and private sector job creation. The goal here is very clear: public sector job creation. What you basically have here are taxpayers from frugal states bailing out taxpayers from profligate states. This [teacher bailout] is just the latest iteration of that idea.”
Profligate Spending
Wisconsin’s profligacy toward public education is well documented. Since the federal government began monitoring school performance under the 2002 No Child Left Behind Act, the average Milwaukee public school teacher’s total compensation has increased by 55 percent, state aid to MPS has increased from $515 million to $600 million, and spending per student has increased from $6,035 to $7,311, according to MacIver. Despite all this, student test scores have remained stagnant.

In addition, enrollment at MPS has been steadily declining. The MPS student population peaked in 1998 at 101,253. Last year, enrollment was 82,096, and the F2011 budget projects another decline to 80,228, according to George Clowes, a senior fellow for education policy at The Heartland Institute.

Despite these enrollment declines, MTEA hopes to convince new MPS Superintendent Gregory Thornton to rescind the layoff notices, hoping more federal money will flow to the school district to save the jobs.

“The problem is that the unions have figured out that getting their benefits written into law at the state level—and now the federal level—is much more efficient for them than having to fight every battle locally,” said Clowes.

Brien Farley ([email protected]) writes from Genesee, Wisconsin.

Internet Info
The MacIver Institute reports on Milwaukee Public Schools: