Wednesday I wrote about some of the ways collective bargaining can have a monetary cost. Last night the Milwaukee Public Schools (MPS) provided an example of how its reform has given local governments a path to financial stability. The MPS board, reports Erin Richards in the Milwaukee Journal Sentinel, approved by a vote of 6-3 a set of reforms projected to reduce the district’s post-retirement benefit liability by $900 million over the next thirty years.
As WPRI reported in a 2009 report, A Critical Element of Reform of Milwaukee Public Schools: The Escalating Cost of Retiree Health Insurance, the district’s health care liability was projected to grow from $2.2 billion to almost $5 billion by 2016. The liability is a massive non-education cost and an issue that, as Superintendent Gregory Thornton told the Milwaukee Journal Sentinel, “we’ve pushed…aside for years.”
The approved plan requires MPS employees to pay between 7% and 14% of their health care premiums depending on their salary. The examples given in MPS board documents (see page 37) shows MPS employees will pay between $33.50 to $222 per-month for health insurance depending on their marital status and chosen health plan. The approved plan also requires employees to take four unpaid furlough days and eliminates salary increases in 2013, 2014, and 2015. None of these changes will be implemented until district union contracts expire in 2012 and 2013.
Thornton and the board were able to address this problem only because of Act 10. As you may recall the Superintendent’s attempt to save jobs over the summer by increasing teacher pension contributions was rebuffed by the MTEA. Given MTEA president Bob Peterson’s reaction to the proposal approved last night, he called it “catastrophic,” it is safe to assume it is not something the board could have negotiated through.
It is understandable that MPS employees dislike having to pay more tomorrow for the same benefits they receive today. However, not addressing the issue keeps MPS on the road to financial ruin to the determinant of all involved, especially students. The Superintendent and board deserve praise for approving this plan, as does the Governor for giving them the tools to make it possible.