June 11, 2014

Teachers’ Union Criticizes Board’s Fund-It-Yourself Plan

Negotiations that began in April between the Princeton Public Schools (PPS), Board of Education (BOE), and representatives of the Princeton Regional Education Association (PREA) continued yesterday, June 10, after Town Topics press deadline.

According to a press statement released by the Board negotiator Patrick Sullivan, who, along with Andrea Spalla and Molly Chrein, has met with the teachers’ union leadership on five occasions, the district now has an offer that it is hoped will be satisfactory to both parties.

Salaries and health benefits are the major sticking points. But the Board has little room to maneuver, said Mr. Sullivan, given the state-mandated 2 percent cap on annual school budget increases.

“Many school budget items, including the cost of employee health insurance have increased more than 2 percent,” states the release. “The School District’s health insurance costs will rise over 12 percent this year, and a 10 percent rise in health premiums equals approximately a 1 percent rise in the school budget, or half the allowed increase under the 2 percent cap.” [Editor’s Note: Subsequent to the printing of this article, the Princeton Public Schools Board of Education issued a correction to the press release quoted here removing the 12 percent increase claim and replacing it with 6.2 percent.]

“New Jersey law also mandates that all school employees pay a portion of their health insurance premiums. Prior to 2011, PPS employees paid for 1/12 (approximately 8.3 percent) of their annual health insurance premiums, while the rest was paid fully by the school district. In 2011, a new state law (“Chapter 78”) was passed that required PPS employees to pay a higher percentage of their health insurance premiums. Many observers have pointed out that the 2011 Chapter 78 law brought state public employees’ contributions to their insurance premiums in line with the amounts that most in the private sector had been paying for healthcare for years. The Board is working to find a way to contain these health insurance cost increases through new insurance structures that save money for both the Board and for teachers.”

According to the Board, the teachers’ union is asking for salary increases that exceed the state average in each of the three years of a contract, as well as for high benefit health insurance at a lower cost to its members, and increases in the stipends teachers receive for training, committee work, and extracurricular services.

The release points out that teacher salaries in Princeton are already among the highest in the State of New Jersey and nationally, and that Princeton already pays among the highest extracurricular stipends in the state.

It also states that the union’s request for health benefits is asking the Board to “depart from” the provisions of Chapter 78. According to the BOA, the union wants teachers to pay no more than an amount equal to 1.5 percent of their annual salary towards their health insurance premiums, at a time when most Americans contribute approximately 18 to 29 percent of premium costs for employer funded coverage.

The Board’s Offer

The School Board is offering salary increases at the effective rates of 1.8 percent in the first year, 1.8 percent in the second year, and 1.86 percent in the third year of the contract, conditioned upon the PREA accepting the Board’s offer on health benefits that would include higher deductibles in order to reduce premium costs for both employees and the Board.

The Board proposes to contribute an amount equal to 60 percent of employee’s deductible to a Health Savings Account (HSA) for each PREA member. If the member doesn’t spend their deductible, they keep the balance, resulting in an additional benefit to them. The Board can afford to contribute these amounts into the PREA members HSA accounts because of the significant savings it will realize from the reduced premium costs due to moving to the higher deductible HSA structure. In effect, the Board is offering to share over 70 percent of its savings from this plan.

As for stipends, the Board is suggesting a rationalization of the contractual schedule of stipends, as long as the total dollar amount budgeted for those stipends does not increase.

Teachers’ Union Response

PREA negotiator John Baxter took issue yesterday with some of the Board’s figures, characterizing Board statements regarding increases in health care costs as “misleading.”

“According to [the release] the district’s health care costs are going to increase by more than 12 percent in the upcoming year. However, according to the BOE’s budget, the cost of all employee benefits for the entire district is expected to increase by 6.4 percent.”

“These numbers cannot both be accurate,” said Mr. Baxter. Citing a December 2013 contract between the district and administrative staff in which the latter received a 2.4 percent salary increase, Mr. Baxter said that administrators had “better and more expensive health benefits than contained in the existing PREA contract.”

Not only that, the Board refuses to talk about health care contribution rates as imposed by Chapter 78 for a limited period of four years that ends June 2015 for Princeton. The BOE “wants to continue them indefinitely,” said Mr. Baxter.

With respect to the Board’s proposal for a Health Savings Account, Mr. Baxter described it as “limited and shortsighted,” a plan that even the Board admits will result in higher health care costs for some PREA members.

As for BOE proposed salary increases, Mr. Baxter called it a “fund-it-yourself” plan, since it’s contingent upon PREA members accepting costly health benefits changes.

“The BOE has not offered one penny from the $530,000 already in the budget that can be put toward salary increases; not one penny from the 2 percent increase.” he said.

“Administrators did not fund their raise,” said Mr. Baxter, “why should teachers, guidance counselors, nurses, child study team members, media specialists, and other essential certified staff?”

The results of the Tuesday, June 10 meeting will be reported in next week’s Town Topics.