LAUSD backs off proposal to cut health care and is now set to guarantee benefits at current levels for three more years
Sarah Favot | November 1, 2017
Despite having laid out options to save money on health care, LA Unified has “rolled over” and agreed to continue funding its generous benefits for district employees, retirees, and their dependents at current levels for the next three years.
The district’s proposal was given late last week to union negotiators. The unions will respond to the district’s offer at its next bargaining session on Nov. 16. The school board must vote on any agreement before it becomes final. The two newest members of the board praised the proposal, even though one of them, Nick Melvoin, had called the district’s spiraling healthcare expenses a “crisis” during his campaign.
Pedro Noguera, an education professor at UCLA who facilitated two board retreats earlier this year to address the district’s looming budget deficits, said Wednesday that he told board members and Superintendent Michelle King that the district needed a strategic plan to align goals with their finances.
“In the absence of that kind of plan, it’s like they’re just waiting for things to get worse before they take action,” he said. “I think that’s not a good way to approach it because the only options at that point will be mass layoffs and closing schools.”
LA Unified’s healthcare benefits are among the most generous in the nation. Employees — and their dependents — pay no premiums and have lifetime benefits.
Last year, the district expanded healthcare offerings by extending benefits to teacher assistants and playground aides even though the agreement stated that it will help push district reserves into the red by half a billion dollars within two years.
The district already faces a $13.6 billion unfunded liability for healthcare benefits. Healthcare costs account for 15 percent of the district’s $7.5 billion budget.
The local teachers union, United Teachers Los Angeles, threatened to strike if health care was cut. After the first negotiating session, union leaders told members that the district was planning to slash their benefits. The four options that LA Unified proposed, according to UTLA, were cutting all dependents off health plans, cutting some dependents off health plans, not covering premiums, and forcing members into low-cost plans.
None of these cuts are in the new proposal, but the district has frozen spending.
Larry Sand, a retired LA Unified teacher, said in an email Tuesday that he pays a $5 co-pay for a doctor’s visit. He thinks co-pays should be raised and other adjustments should be made.
“I think UTLA was geared for a battle over health care, but the district indeed rolled over,” said Sand, who founded the California Teacher Empowerment Network, a nonpartisan, nonprofit organization that educates teachers and the public about union and school choice issues.
“Unfunded liability of $13.6 billion?! I’m not sure just what the board is thinking. It’s particularly egregious that the board allegedly has a ‘reformer’ majority. If the healthcare plan is what reform looks like, this bunch isn’t going to reform anything.”
The proposal was given last week when LA Unified negotiators and employee union officials met for their third bargaining session on healthcare benefits. The district is also negotiating a new contract with unions that includes salary provisions.
The negotiations come at a consequential time as the district faces a $422 million budget deficit in 2019-20.
In late August, district officials held a special meeting on healthcare benefits and the budget. Some school board members said then that they wanted changes to the healthcare benefits in order to reduce costs. The district’s financial staff told board members that by 2031, the district will be spending 50 percent of its budget on healthcare benefits and pensions for retirees.
Winter is not only coming to Westeros, to LAUSD, too. Check out slide 29 https://t.co/4NPs0WLi8T
— Andrew Rotherham (@arotherham) August 30, 2017
This should legit scare people. https://t.co/pCPEFMfBMK
— Benjamin Feinberg (@SchoolDataNerd) August 30, 2017
Acting Superintendent Vivian Ekchian sent a letter to all employees Friday giving them an update on the negotiations. She said the district’s proposal maintains a $1.1 billion annual contribution for health and welfare benefits for 2018, 2019, and 2020.
“This proposal would enable employees and retirees to continue receiving their current level of health coverage over the next three years,” she wrote. “While proposals do not become finalized until an agreement is reached, we look forward to working collaboratively with our labor partners to support our valued employees.”
UTLA, which represents district teachers and counselors, praised the district’s proposal in a statement on its website.
“On Thursday, Oct. 26, the district made significant movement on their initial proposal intended to gut our healthcare, and they are now willing to fund our healthcare at current levels for the next three years through 2020. This is a result of our growing solidarity with our labor partners, our school site organizing, our Sept. 26 #BigRedT and Oct. 11 #Picket4Power protests, and the fact that the district knows that we are willing to strike to achieve the priorities of the Schools LA Students Deserve campaign, which include protecting our healthcare and much more,” UTLA wrote.
“However, we see this as real progress and we have to keep the pressure up. We have the momentum but this is one battle of many for healthcare and the schools LA Students Deserve.”
Kelly Gonez, who along with Melvoin was elected to the school board in the spring, supported the district’s proposal.
“I believe the District’s proposal strikes the balance between being financially responsible and keeping the promises we’ve made to our hard-working employees,” Gonez said in an email. “As we look to the future, we will continue to seek solutions that are fair to our employees and maintain the level of care they deserve, while living within our fiscal realities. Though negotiations are ongoing and proposals evolve during the bargaining process, there is a great deal of common ground between the District and our labor partners.”
Melvoin called the district’s $13.6 billion unfunded liability for healthcare benefits a “crisis” on the campaign trail last spring, proposing that newly hired teachers receive more pay for less generous benefits. But this week he also praised the proposal.
“As a former LA Unified teacher, I’ve always been committed to ensuring that our hard-working employees receive the healthcare benefits that they deserve and that help us recruit the best teachers in the country,” Melvoin said in a statement. “At the same time, we saw at our board retreat on labor issues, that by 2031, 50% of District funds would be going to pension and healthcare costs instead of to classrooms and salaries. Not addressing this is unfair to our students and employees. The District’s current proposal — which maintains benefits through prior generous investment — is a big step in the right direction and was one of the recommendations of the Independent Financial Review Panel. Thoughtful solutions will be necessary if we’re to ensure the long-term success of our students, teachers, and all employees.”
The Independent Financial Review Panel, which was formed by former Superintendent Ramon Cortines, recommended two years ago that the district renegotiate its healthcare benefits agreement and freeze all healthcare spending for five years.
School board President Mónica García and school board member Richard Vladovic did not respond to requests for comment.
Katie Braude, who co-founded the parent advocacy organization Speak Up that worked to help elect Melvoin, said parents appreciate the district is taking a small step and freezing the contribution level.
“While we completely support the needs of our teachers to have excellent healthcare coverage, the current benefits package contributes to LAUSD’s enormous unfunded liability, and freezing the contribution level does not fix the problem,” she said in an email. “Our concern is that, as more public education dollars head outside the classroom, our kids will face huge class size increases, and fewer arts, technology, and other curriculum options that are critical for their futures. Parents expect Nick and the entire board to make the hard choices that put the interests of kids first.
“This is why parents need to have a seat at the table — no one else can represent the best interests of our kids.”
UPDATED: This story has been corrected. The unions have not agreed to the district’s proposal.