Faced with another tough budget, Madison School District administrators are again asking the School Board to consider making employees contribute to their health insurance premiums.
Many Wisconsin school districts have taken that step to avoid cuts, but there’s been little appetite among Madison School Board members to seriously consider the idea.
That could be changing. With budgets flat and revenue growth negligible, the board may have little choice but to confront the difficult topic, said James Howard, board president.
“We’ve really been walking around the issue, and I don’t know if we can continue to do that,” he said Friday. “Obviously, that’s a really tough conversation the board is going to need to have, and maybe it’s coming in the next month.”
Superintendent Jennifer Cheatham’s administration is set to present multiple health insurance scenarios to board members at a work session Monday. All would require an employee contribution of some sort, with the average around 3 percent.
“It pains us, and I think it pains the board, that the discussion is necessary at this point,” Cheatham said Friday.
Some scenarios would require an across-the-board contribution of an equal percentage, while in others, the percentage would vary by employee group. Some versions also include a deductible or an increase in drug co-pays.
Currently, employees pay $20 per medical office visit, and there are no deductibles. Only administrators contribute to their health insurance premiums. They pay 10 percent of a plan’s cost.
In the past, union officials have fought the idea of an employee contribution, calling it the equivalent of a pay cut. In hopes of blunting that argument, district administrators are proposing to increase salaries enough next year that even with a health insurance contribution, the average worker would get a pre-tax raise of several hundred dollars or more.
“We’re trying to design an approach that will minimize the impact,” Cheatham said.
Last year, the district somewhat surprisingly achieved a zero-percent increase in health care costs through negotiations with its three health maintenance organizations (HMOs). That outcome seemed unlikely two years in a row, and indeed, the projected increase in health care costs for the 2016-17 school year is 2.9 percent.
“Our team negotiated hard, and they brought (the percent) down substantially, but we couldn’t get it down to zero,” Cheatham said.
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The result is that the district needs to find about $1.95 million to cover the projected increase. All of the proposals to be discussed Monday would cover that amount.
To offset some of the sting, the administration is proposing salary increases that would result in a “positive net compensation” for “all employee groups,” even with an employee premium contribution.
All employees would get a base wage increase of 0.12 percent — the maximum allowed under Act 10, Gov. Scott Walker’s 2011 legislation that substantially limited bargaining rights for public-sector unions. Additionally, the district would continue funding what it calls “full step and lane advancement.” That refers to a salary grid in which employees advance based on additional educational attainment (lanes) or years in the district (steps).
Doug Keillor, executive director of Madison Teachers Inc., the union that represents district employees, said employees “are not opposed to an employee contribution at some point.” They realize the board is facing difficult head winds given that “education is a low priority” to state leaders, he said.
But he questioned the timing.
Act 10 really set back public school employees, Keillor said, requiring pension contributions that resulted in a reduction of take-home pay of around 6 percent or more. Workers have not recovered from that, and wages remain stagnant or depressed, he said.
Meanwhile, the teaching profession is reeling from a high number of retirements and departures, and recruiting new teachers is proving difficult, he said.
“We have good people on the School Board, and those good people are now going to be spending some time making very difficult decisions,” Keillor said. “We can’t bargain anymore (as a union), but if the board decides that this is the direction it must go, then we’ll sit down with the administration and see which options would be least adverse to district employees. Ultimately, this speaks to the need for more money in public schools.”
Todd Berry, president of the Wisconsin Taxpayers Alliance, said the Madison School District “is probably an outlier in terms of employee cost-sharing and health insurance.” He did not have exact numbers, but he said many Wisconsin school districts have saved money by using the greater flexibility allowed by Act 10 to change employee benefits.
“Madison was one of a small number of districts that didn’t move as fast or as far as other districts,” he said.
Madison School District leaders have been working for months to eliminate a budget gap for the 2016-17 school year of $6 million to $8.5 million, out of about $375 million in regular operating costs. Cheatham is to present her formal budget proposal later this month.
Monday’s board discussion on the budget is set for 6 p.m. in Room 103 of the Doyle Administration Building, 545 W. Dayton St.