In a final attempt this legislative session to reduce taxpayer liability for public schools, Gov. Phil Scott proposed that the state negotiate teachers’ health insurance benefits, starting this year.
Rebecca Kelley, Scott’s communications director, described it as “a win for taxpayers, a win for teachers and a win for our education system as a whole.”
A half hour after the meeting, the state teacher’s union rejected the proposal in a blistering email sent to the media. Jeff Fannon, the executive director of the Vermont NEA, said the governor’s plan would undermine the collective bargaining process, which is done at the local level.
“It would fundamentally alter the nature of the give and take in any collective bargaining session,” Fannon said.
Martha Allen, the Vermont NEA president and a librarian at a school in Canaan, said the Scott administration’s “assault on collective bargaining is straight out of the Donald Trump and Scott Walker anti-union playbook.”
Kelley said the Vermont NEA “walked away” from the meeting “with an apparent unwillingness to even consider this discussion.”
This year, the state teachers health care system is moving from so-called “Cadillac” insurance plans to lower cost insurance programs with higher co-pays because of a mandate under the Affordable Care Act. And so, for the first time, the health care component of teacher contracts is being negotiated in the same year by all 60 local supervisory unions.
Under four different medical insurance plans developed by the Vermont Education Health Initiative, teachers are held harmless for additional costs associated with higher premiums and copays.
Teachers are hoping to make up the difference in the lower actuarial value of the plans with higher salaries. The value of current teacher insurance plans is 9 percent higher than the platinum plan offered through Vermont Health Connect.
As Fannon put it, “a lot of the exposure has to be accounted for in bargaining with employers now.”
Fannon objects to Scott’s proposal because teachers would no longer negotiate with their employers — local school boards — but instead would be forced to bargain with the Scott administration. The union prefers to continue to negotiate district by district.
And moving the health benefit to a statewide contract would take a bargaining chip away from teachers. “If you take that one big item it magnifies the other issues left to negotiate, and then you’re bargaining with two entities — one being your employer and the other is not your employer,” Fannon said.
The switch to VEHI’s new health insurance plans, which goes into effect on January 1, 2018, is expected to save about $26 million.
Scott wants the savings to go to lower the statewide property tax — not to higher teacher salaries — and he proposed that the state scoop up the savings in his January inaugural address.
Since February, the Scott administration has been working with the Vermont School Boards Association and the Vermont Superintendents Association to develop a proposal that would reduce Education Fund spending. The system costs about $1.6 billion per year, most of which is borne by property taxpayers through local and state taxes. Vermont has among the highest spending rates per pupil in the nation.
With just two weeks to go in the legislative session, Scott proposed the statewide health care contract as a way to capture savings for the Education Fund.
It was the first time the Vermont NEA had seen the plan.
In a press release blast, the Vermont NEA claimed that legislative leadership had said the proposal “should be rejected out of hand by the General Assembly.”
Problem was, neither Senate President Pro Tem Tim Ashe and House Speaker Mitzi Johnson actually said that.
Their response to the proposal was much more muted. Both said it was too late in the legislative session to adopt a major change to the way contracts are negotiated with teachers.
Ashe said he wouldn’t comment about a meeting he believed was a private discussion. The proposal, he said, was a “real departure” from current collective bargaining practice and “even if it was a wonderful idea,” the timing was challenging.
Johnson said there is little evidence that a centralized negotiations would yield better results than negotiations district by district. Johnson opposes the idea of the shifting the savings to the Education Fund. It’s appropriate that savings with the new insurance program, she said, be handled at the local level. She criticized the governor for not proposing the contract so late in the session.
“We’ve known this was going to happen for a long time,” Johnson said. “If this was the plan than put it out in January.”
“The big hurdle was we’re just a couple of weeks from the end of the session and this was the first time the NEA saw it,” Johnson said. “It’s really a substantial change for this late in the session. It would be a substantial change to labor law. When there is so little time to work out differences, it’s tough.”
Democrats and the Vermont NEA have said increases in health care insurance premiums is a main driver for high spending by local schools.
In testimony to the Legislature in 2015, Joel Cook, the former director of the union, blamed “the inexorable growth in health care costs” for rising school expenditures.
The Scott administration says the statewide health contract is the best way to control costs going forward.
Jeff Francis, the executive director of the Vermont Superintendents Association, says if the administration and the teachers union can’t come to an agreement the plan won’t move forward.
“We’re in a period of transition, and we’re dealing with the fact that we have rising costs and declining student population,” Francis said. “Who knows what will happen, but it was reasonable for the governor to explore it.”
School boards are under a great deal of pressure to control costs, and Nicole Mace, the executive director of the Vermont School Boards Association, believes that the new plans and the statewide health contract would help.
Mace says she met with the Vermont NEA to discuss options for health care last fall after the union “sent signals” that the benefit was going to be an issue in upcoming negotiations.
She floated the statewide health contract proposal to legislative leadership in February.
The VEHI change in health care plans is a one-time opportunity, she said, for the state to realize savings for the Education Fund.
And she says it’s unlikely that local districts will be able to realize savings “organically” in negotiations with the union.
“My sense is there is a tremendous variability locally and we don’t know where the new level will be,” Mace said.
Business managers are booking the same level of spending for teachers next year — despite the potential for health care savings.
If the governor’s proposal was successful, negotiations over health care benefits would happen once — as opposed to 50 times over locally.
A third of teacher negotiations now underway are at impasse, she said.
Editor’s note: This story was updated at 7:02 a.m. April 21.