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Pay no attention to the people behind the curtain

Sunday, May 09, 2010

Arbitrate This

by folkbum

As I mentioned yesterday, this morning's editorial is calling for the contract between the Milwaukee Public Schools and its union, the Milwaukee Teachers Education Association, to go to arbitration.

Though later they say something conciliatory like "let's realize that everything must be on the table," this and the paper's recent history make it clear that the only thing they give a hoot about is one change that will ultimately be useless and that ignores the larger context of MPS's budget problems.

Arbitration, the editorialists write, "is the best option unless the Milwaukee School Board and teachers union agree on moving employees into a less-expensive health care option." To clarify, MPS teachers and most other employees have a choice between two different insurance plans, an HMO and PPO. What's available in these two plans is public, as the MTEA has posted it on their website (.pdf). The PPO is a better deal, mostly because of somewhat higher limits and more choice of doctors, though out-of-pocket costs are higher.

This is all frustrating, because it is pretty clear that the editorial board does not read its own reporting. Start with the report Amy Hetzner filed just last year on area school district salary and compensation. Hetzner's analysis found that average MPS salaries were very low for the region. Its fringe benefit package, though high, brought the full compensation package for MPS to merely middle of the road. To pretend that these benefits are the root of the problem, or are the most important factor in creating the current MPS budget distress, is ridiculous. If MPS's compensation package were truly the bane that the editorial board believes, then area school districts that compensate their teachers better would be falling apart far worse than MPS--and clearly, they are not. (Not to suggest that all local school districts are looking at rosy pictures next year; they are not. But they are not looking at challenges on a scale that MPS is.)

In addition, the low average salary identified by Hetzner contributes significantly to the shocking statistic that the editorializers perseverate upon: "The district pays 74.2 cents in benefits of every dollar it pays its employees in salary," they note. First, they do not clarify that MPS calculates this number using not just negotiated benefits--health insurance, for example--but adding on Social Security and Medicare taxes, state-mandated pension deductions, and other items that are not contractually negotiated. Second, remember your fractions: The low average salary--which would be the denominator, the bottom number--means that any increase in the benefit level--which would be the numerator, the top number--is amplified artificially.

This is true because MPS teachers, like teachers all over the state of Wisconsin, have opted to trade salary increases for mere maintenance of health insurance. Indeed, a quick check of national statistics bears this out. Wisconsin currently ranks 20th in average salary and 49th in starting salary. That site notes the 10-year increase, and Wisconsin ranks 43rd--meaning 42 states increased teachers' salaries more in the last ten years than we did. Going back to 1990, note that the average Wisconsin salary has increase by a mere $13,000; our neighbors in Minnesota saw their salaries double. Illinois and Michigan and even Iowa all beat us in salary increases. Spencer Coggs, when I spoke to him last week, put it to me this way, and I think it makes sense: Wisconsin teachers--and Milwaukee teachers, in particular--guessed correctly over the last 20 years that what would be valuable is not salary but health insurance. And people now want to punish us for getting it right.

In Milwaukee, this is particularly galling: We already have the most challenging teaching assignment in the metro area, with just about the lowest average salary--particularly apparent for teachers who have the most experience and the highest levels of training--and live in the most expensive health care market in the midwest. The one good thing we have left going for us, an ability to negotiate that market with peace of mind, is the target.

And here's the kicker: Changing the health plan from PPO to HMO isn't going to save much money at all: The district offered an estimate a while ago, noted by the editorial board here: "An estimated $47 million in health care savings could spare 400 teaching jobs." Their math is right on how much teachers cost, but the "estimated" savings is nowhere near accurate. The way MPS arrived at the number was to take the average cost of an employee on the HMO and subtract that from the average cost of an employee on the PPO, multiplied by the number of employees on the PPO. Problem is, the average cost of an employee on the HMO will shoot right up if all of us are on that plan. Why? Because the costs are based on actual utilization, and employees who choose the PPO do so generally because they have higher-cost or more challenging needs. Those health issues will not magically go away under the HMO, and MPS will still find itself paying for that care. In addition, the HMO requires no annual deductible or co-insurance or cop-pays.

The real fault lies in the fact that the cost of meeting the needs of MPS's students--and students around the state--are increasing for everyone faster than the rate at which the state or the federal government or even local taxpayers are prepared to meet. (More on that tomorrow.) To take this uncomfortable reality and use it as a bludgeon against the people on the front lines and doing the hard work of teaching the state's most difficult students is an offense against common sense and decency. Especially when the facts line up against the editorial board's ridiculous position.

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