August 26, 2007

ProJo: Teacher Benny's "All over the board"

Marc Comtois

The ProJo reports that teacher benefits in RI are "all over the board" and gives some stats in the differences among plans by district and differences in buyback options. It's an old and familiar tune around here, but the central point is worth repeating:

Last year, after a decade in which health insurance emerged as a critical and contentious contract issue, 33 of the state’s 36 districts required some form of cost sharing. But teacher contribution still trails private sector workers in the state by a wide margin — although in some communities teachers are paying far more than other public employees.
Hey, school boards and city councils are as at fault as the unions here, folks. In the world of collective-bargaining, they haven't been up to snuff (even granting their amateurish experience versus those employed by unions solely to bargain). But maybe going forward, they can take Rhode Island Federation of Teachers President Marcia Reback statement--that “to the people I represent, health insurance is as important — if not more important — than salaries"--as a way to prioritize negotiable line-items. But perhaps the biggest line-item that can be dispensed with is the asinine "buy back" options that are still included in nearly all state contracts--teacher and otherwise. It can't be that difficult to determine if an employee is covered by their public-employee spouses health insurance, can it?

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From a philosophical standpoint, the buyback is problematic as it quantifies healthcare as a purely economic benefit as opposed to an obligation related to the employment based manner in which healthcare coverage is delivered in this country. Buybacks ultimately were the first step on the road that led to premium sharing, as healthcare is now widely considered as just another form of compensation, which was not always the case.

However, I am surprised to see objections to buyback over here – it represents a purely capitalist approach to the benefit situation. With the buyback in place, all districts are in competition with one another, and the district that hits the right combination lowers their overall cost of providing the healthcare benefit without the benefit going away (as showing alternative coverage is a requirement to receive the benefit – no one can opt to go without any coverage at all.)

To me, the most interesting larger questions are how many private sector employers are giving their own employees buybacks because they are covered by a spouse in public sector employment, and how many independent contractors are also benefiting from spousal coverage in the public sector?

The most interesting question from today’s article is why the Governor and RIPEC want to move local public employees into a plan that for all but a few districts actually costs more?

Posted by: Bob Walsh at August 26, 2007 5:50 PM

>>From a philosophical standpoint, the buyback is problematic as it quantifies healthcare as a purely economic benefit as opposed to an obligation related to the employment based manner in which healthcare coverage is delivered in this country. Buybacks ultimately were the first step on the road that led to premium sharing, as healthcare is now widely considered as just another form of compensation, which was not always the case.

If I understand his statement correctly, Mr. Walsh believes that healthcare is something that the employer should be obligated / required to provide merely for the privilege of employing someone (“… an obligation related to the employment ...”).

I suppose that the analogy to this is that the employer is required to “contribute” to Social Security on behalf of each employee. As to both, it appears that Mr. Walsh doesn’t believe that these should be considered part of an employee’s compensation.

This displays a shocking ignorance of even rudimentary economics, one which almost universally shared among those in the public sector, and “progressives” / liberals in general. They appear to confuse the “wealth” (as they believe to exist) of employers / corporations with the ability to print money (which power is limited to the Federal Reserve).

Hence the perennial “progressive” cry for “corporations” to pay taxes. They never have and never will, because they can’t print money. To the extent that they provide revenue to the government, it is built-in to the price paid by the final consumer. Ford and Chevy and Toyota don’t print money to pay taxes, and neither do their shareholders or CEO’s – you pay those taxes, WITH INTEREST, in your car payment.

Without that printing press, the only source of money for corporations and CEO’s and shareholders is from revenue provided by you, the consumer. Without consumers, corporations have no wealth. They are merely conduits for the taxman, serving as intermediaries disguising the true amount of taxes that living, breathing “working families” actually pay.

Similarly, paying one-half of the Social Security “contribution”; pension payments and/or 401(k) matches; healthcare premiums etc. ARE ALL part of what an employer pays in order to have an employee on the premises – in addition to salary / hourly pay – and are part of the compensation package.

I guess that the teachers unions like to bamboozle school committees into believing that salary is the only “cost” associated with a contract; and they’ve certainly been successful in convincing credulous newspapers to only report increases in base salaries as the “cost” of a newly negotiated contract, so perhaps Mr. Walsh has internalized this concept.

But watch all hell break loose if some brave school committee itemized (beyond salary) the actual CASH outlays required to have each teacher on the premises: health & dental; pension fund contributions; short and long term disability insurance … and then declared that since these aren’t compensation they aren’t mandatory subjects of collective bargaining (wages, hours and working conditions) and that to save money the school district is going to reduce or eliminate some or all of those non-compensatory items!

Posted by: Tom W at August 27, 2007 12:19 AM

Actually, TomW, you did misunderstand what I was saying and why - I was pointing out that my side lost the high ground of arguing about health care being treated differently once the buyback concept was put into place. (You can't argue that it is not monetary when you attach a price to it.)

By the way, since you often compare our education system to OECD countries, surely you appreciate why I would prefer to have the entire healthcare question shifted to the "government-backed entitlement" category, both from the perspective of taking the issue out of the bargaining equation and to ensure that every student is covered as well.

Posted by: Bob Walsh at August 27, 2007 2:36 PM

>>Actually, TomW, you did misunderstand what I was saying and why - I was pointing out that my side lost the high ground of arguing about health care being treated differently once the buyback concept was put into place. (You can't argue that it is not monetary when you attach a price to it.)

Thanks for the clarification. But I don't believe there was or could be any high ground - health care premiums are, by definition, monetary.

>>By the way, since you often compare our education system to OECD countries, surely you appreciate why I would prefer to have the entire healthcare question shifted to the "government-backed entitlement" category, both from the perspective of taking the issue out of the bargaining equation and to ensure that every student is covered as well.

That I understand (but don't agree with) in reference to taking it off of the bargaining table (by shifting 100% the burden to taxpayers, which still ultimately comes out of your members' pockets, albeit filtered through the IRS).

Leaving aside Constitutional issues (I don't believe that socialized medicine is provided for under the U.S. Constitution), I'm sure that you'll understand (but not agree with) my opposition to socialized medicine (a/k/a "single payer").

Beyond the aforementioned stealth effort to convert medical personnel into de facto government employees (thus union-organizable via the "card check" scam), I don't relish the prospect of:

1) European / Canadian level tax rates to pay for same;

2) European / Canadian low quality / long waiting periods / rationing;

3) All of which is inevitable when the government is the sole provider.

Yes, health care in this county needs reform, but "single payer" will make things even worse.

Funny how health care / health care inflation in this county wasn't a problem until the government started getting involved, i.e., Medicare / Medicaid.

Posted by: Tom W at August 27, 2007 4:37 PM

how about offerring united and blue cross...if people want blue cross, they can pay extra.....now see who is willing to pay... what a joke.

Posted by: johnpaycheck at August 27, 2007 8:07 PM

>> With the buyback in place, all districts are in competition with one another, and the district that hits the right combination lowers their overall cost of providing the healthcare benefit without the benefit going away (as showing alternative coverage is a requirement to receive the benefit – no one can opt to go without any coverage at all.)

Bob, just curious as to what exactly the districts are supposedly in competition for. This sounds like another teacher union talking point that lacks any actual meaning. One thing is for sure, this has nothing to do with the educating our schoolchildren.

Posted by: Frank at August 28, 2007 3:39 PM

Frank - in this example, they are competing against each other to have the lowest average health care cost while provided benefits on par with other districts. The management motivation behind buybacks is simply to get employees to choose coverage provided by a spouse's employer. The perfect example would be two teachers married to each other employed by different districts - assume the plans are virtually identical, and the district with the higher buyback "wins" the competition, and has more resources to put elsewhere.

Posted by: Bob Walsh at August 29, 2007 8:03 PM
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