Don’t ask me why, but as I was leafing through the recent contract agreed to by the Milwaukee School Board and the Milwaukee Teachers’ Union (MTEA), I couldn’t help but think of the pony joke. You might recall the story told over and over by Reagan about the little boy confronted with a roomful of manure. Ever the optimist, the boy began scooping manure with his bare hands in the belief that, “with all this manure, there must be a pony in here somewhere.”
At the time the teachers’ contract was signed, much was made of the slender pay increases (3.5% - 3% per year) and the fact that teachers will begin contributing to their health insurance. This latter change does mark a departure from past practice, although only time will tell if the School Board sees the $50 million “savings” they hope to see.
But that wasn’t the pony I was looking for as I scooped my way through the voluminous contract language. I was in search of something – anything - that would begin shrinking MPS’ unfunded liability for retiree health insurance. You see that unfunded liability was $2.6 billion – more than double the district’s entire annual budget - when WPRI published a report on the topic in December of 2009.
As I dug through the contract, I thought about MPS Board President Michael Bonds’ reaction to the WPRI report. He told us that, while he was concerned about the unfunded liability, any change in that liability would have to be negotiated with MTEA. So I continued scooping and scooping trying to find what Mr. Bonds had accomplished.
It is a big deal for two reasons. First is the fact that someday the liability will have to be funded – paid off. The second reason is an immediate problem. As the liability grows, the amount the district has to budget to pay off each year’s share of the liability also grows. The $70 million they now budget will balloon to $130 million in seven years – an 85% increase. It is the fastest growing piece of the MPS budget, each year taking more and more money out of the classrooms. MPS is in no position to do anything that takes money out of their classroom.
I continued on with my scooping, looking for some change in the contract language that created this fiscal nightmare. In 1973, for the first time the MPS Board agreed to continue paying the employer share of health insurance for retired teachers as long as the employee remained alive. Over the years, that obligation has grown quite a bit – reaching $2.6 billion. Wow!
You probably guessed, I never did find that pony. Yes, the contract did require employees to pay toward their own health insurance, a move that could eat into the liability for retirees by a tiny amount in the future. But, the new contract did nothing to curtail the payment of health insurance for retirees, which keep getting younger every year, thus exacerbating the problem. The contract also extends health insurance coverage to domestic partners, an added cost that will offset a good share of any savings the board hopes to realize.
My empty search should sound an alarm, since it is only in contract negotiations that the School Board – acting on behalf of Milwaukee taxpayers – can address their mounting liability. It is their only opportunity to do what is right and they chose to do nothing. They have not only defaulted on their obligation to represent the taxpayers of Milwaukee, they have forfeited their right to complain about any state aid cuts that might be in the offing. If we hear one peep out of this crowd about Governor Walker’s budget, we need to remind them that they had their chance to fulfill their obligation to the children of Milwaukee and they blew it.
And for the kids of Milwaukee? No pony, just manure.
-January 20, 2011