There is a lot of not-always-accurate information swirling around regarding savings from teacher healthcare plans. First of all, these projected savings are not dependent on the Governor’s proposal in any way.
The switch to cheaper health insurance plans for teachers is happening now and is unrelated to
the governor’s actions. The plans are cheaper because the benefits are less generous than
before. The projected savings, though the actual savings are unknown, are about $74 million.
Because the plans have higher deductibles and co-pays about $48 million is reserved to “make
whole” the teachers. The remainder is the $26 million that the fuss is all about.
The Governor’s plan to “reduce property taxes” actually uses only $8 million for that purpose
and the other $18 million gets spent on other commitments, NOT returned to the taxpayers. The
Beck amendment (the republican proposal) did not specify how the “savings” would be used
other than going into the Education Fund.
What the Beck amendment DID do was try to link the savings to changing teacher healthcare
contract negotiations from the local to the state level and claim state savings. While I am not an
expert on education finance, I do know that introducing a bill at the 11th hour that makes major
changes to decades of collective bargaining with no review at all by the appropriate committees
is a very bad idea.
The House did not pass this amendment but instead approved a democratic proposal which
makes no change in bargaining but directs 100% of the savings directly back to the local school
districts in reduced property taxes. The money would be returned only after school budgets had
been written and approved and can be applied only toward direct property tax reduction.
So we have a bizarre situation where the Governor’s proposal, which dedicates 30% of the
savings to property taxes, is seen as tax relief, and the Democratic proposal, which returns
100% to the taxpayers, is not. Very strange.
One other concern is the accuracy of the figure of $26 million. Even if the governor’s numbers
are correct the first savings would be accumulated over 6 months rather than a full year, so it
would be $13 million at the start. But the Joint Fiscal Office (the legislature’s non-partisan
financial analysis office) has not given confirmation of that number and because of the rapidly
rising costs of ALL health insurance policies that actually cover anything, I have my doubts
about the actual savings amounts.
“Savings” are achieved by teachers having higher deductibles and co-pays. After accounting for
that, further savings are found by utilizing fewer healthcare services. That is it’s own debate. But
the plan approved by the House last week returns ALL the savings, whatever they may be, to
the taxpayers. The Governor’s plan does not.