The School Employee Concession Myth

Michigan Capitol Confidential ^ | 5/20/2010 | Michael Van Beek

[MichCapCon]

With Michigan's economy in decline and families departing the state in increasing numbers, tax revenues that pay for our public schools are falling. Because employee compensation costs consume around 80 percent of most school districts' operating budgets, and also include unsustainable retirement benefit provisions, the Legislature is considering proposals to reduce these expenses.

Notwithstanding fiscal and economic realities, the Michigan Education Association, the state's largest school employee union, has pulled out all the stops in its efforts to shut down any reforms in this area. One of the union's tools is a claim that school employees have already made "$1 billion worth" of concessions over the last three years.

The data, however, fails to show any significant reduction in public school labor costs.

Typical of the union's claims was a 2009 Detroit News column written by MEA President Iris Salters, stating that school employees saved taxpayers $200 million in salary concessions and another $700 million in health insurance reductions over the last three years. The MEA has repeated this claim a number of times, including in recent radio and television advertisements. Only the televised ads cite the source for the claim, referencing the Michigan Department of Education Financial Information Database.

Those "$1 billion in savings," however, are not found in this data. Instead, it shows that Michigan public schools spent $13.758 billion on school employee compensation in 2006. In 2008 (the latest year available), the number had increased by $39 million to $13.797 billion.

The unsustainable defined-benefit pension system and post-retirement health care benefits were key contributors to the overall compensation expense increase.

To get a more accurate picture of school employee compensation changes it is necessary to examine a longer time period. From 2000 to 2008, total compensation for school employees increased by $90 million after adjusting for inflation...

[kingu]

.28% change over two years is pretty much flatline, whereas the union would have liked to see that increase by seven percent. The claimed concessions are apparent - A two year flatline would mean that either employees contributed more for their health care costs, or benefits were reduced, and annual raises were most likely deferred.

Considering that the typical public employee health benefit is well over $2,000 a month, there's a tremendous amount of fat that can still be trimmed from that budget. I guarantee that if you gave each of those employees two grand a month and told them to purchase their own private insurance, that few would use even half of that budget, and most less than a quarter.

Cut vacations, cut benefits, and cut retirement. It's for the children, after all, as every dollar spent on employee benefits robs the children of a better learning environment.