LAUSD headed for future showdown with UTLA over health benefits
Craig Clough | August 4, 2015
UTLA President Alex Caputo-Pearl took the stage over the weekend at the union’s annual leadership conference and made another strike threat in his State of the Union address, predicting that the district would try to rollback health benefits when they reopen negotiations in 2017.
While it may appear that Caputo-Pearl just likes saying “strike,” he doesn’t have to squint too hard to see the writing on the wall: several district leaders have said LA Unified will need to rethink its health benefits next time around.
The current health benefits contract was given a thumbs up by Superintendent Ramon Cortines and was approved by the school board with a 6-1 vote in April. But in its press release announcing the deal, the district pointed out the rising costs of health care for employers. The deal will cost the district over $3 billion dollars over three years, with each succeeding year costing roughly five to six percent more.
In the release, Cortines said, “I want to be clear: this agreement is not a final solution, and I agree that drastic changes need to be made if we are to sustain health benefits and honor our commitment to our employees and retirees.”
In response to Caputo-Pearl’s prediction, district spokeswoman Shannon Haber told LA School Report, “We can’t speculate what the financial condition of the state, and consequently the district, will be two years from now. However, the district is always seeking ways to reduce the cost of health benefits — without reducing the level of service — to our employees.”
The benefits package LA Unified offers is among the most robust of any district in the state for including free lifetime benefits for retirees and their dependents. It is one of about 70 districts in California that provides lifetime benefits with no premiums. Most other plans in the state only offer benefits until the retiree turns 65 and becomes eligible for Medicare.
Continuing to offer the current lifetime benefits will cost the district $868 million annually for 30 years, the Los Angeles Times reported in March.
“It’s scary,” Megan Reilly, LA Unified’s chief financial officer, told the Times. “It has been a growing concern that our liabilities have been increasing year after year and slowly becoming larger than our assets. We’re not there yet, but we probably have a couple of years to go.”