This commentary is by Neil Odell, president of the board of directors of the Montpelier-based Vermont School Boards Association.
How do you define affordability? Merriam-Webster offers two definitions of the verb to afford: (a) to manage to bear without serious detriment or (b) to be able to bear the cost of something.
Each of these definitions implies knowing the magnitude or the scale of the item in question. It also implies a tradeoff with something else; that something is affordable when its cost is balanced with the ability to bear it.
There are two bills being considered right now by the Vermont Legislature that deal with the affordability of school employees’ health care. The initial consideration of these bills in the House General, Housing and Military Affairs Committee has focused almost completely on the affordability of health care for teachers and support staff. So far, the conversation has not addressed the tradeoff: the ability of Vermont taxpayers to bear the potential increase.
In 2018, the Legislature passed a law moving negotiations of health care benefits for school employees to the state level. As a result, local school districts no longer negotiate premium cost share, out-of-pocket costs or other aspects of health care benefits.
The first round of statewide negotiations finished in December 2019. Since the two sides failed to reach an agreement, the final outcome was decided by a single arbitrator from New Hampshire who selected the Vermont National Education Association’s proposal.
The arbitrator’s rationale for choosing VT-NEA’s proposal was remarkably brief. It included no analysis of the cost impact to teachers and support staff, and, more alarmingly, no analysis or consideration regarding the total cost of the decision on Vermont taxpayers. School boards across the state would later find out that the impact of this decision on school budgets was estimated to be as high as $25 million in additional dollars. The new benefits began Jan. 1 of this year and all of us should be monitoring this closely.
In response to higher health care costs, board members and school administrators sharpened their pencils and developed budgets that dealt with this increase. School districts reduced expenses where they could: Educational programs were cut; maintenance was deferred; and staff were let go in an effort to decrease spending. Where expenditure cuts could not fully address the increase, local property taxes will increase to make up the difference.
This is just one example of a handful of shortcomings in the existing law that must be addressed during this legislative session. The outcome of legislative action will shape the next (and future) round of health care bargaining and will have important impacts on the fair and cost-effective provision of health care benefits for school employees and school district budgeting for years to come.
With a good bargaining construct, we can both maintain excellent health care benefits and get on a path to a more affordable and sustainable cost approach.
Of primary importance to school board members and taxpayers are the following:
- Proposals submitted by both sides during negotiations must include a full cost estimate for their proposal, with a breakdown of costs to schools (the employer) and costs to teachers/support staff (the employee).
- An arbitration panel must be required to determine which of the two proposals most appropriately balances access to health care benefits with reasonable cost containment to ensure the financial sustainability of the plans.
- The panel’s written decision must include a full explanation of the basis for the decision.
There are other important elements that should be addressed in the current law, and a complete list of recommended changes can be found in H.63.
Unfortunately, the House General, Housing and Military Affairs committee has decided on a different approach. It has chosen to advance another bill, H.81, introduced by VT-NEA that fails to recognize Vermont taxpayers’ abilities to fund these benefits. Even more concerning, provisions in H.81 could result in even greater costs being shifted onto local school districts and local taxpayers.
It’s time to recognize that the affordability question pertains to taxpayers as well. It’s time to recognize that many people in our communities are struggling due to the pandemic. It’s time to recognize that we’re on an unsustainable trajectory when it comes to health care benefits in our schools.
Please reach out to legislators, particularly members of the House General, Housing and Military Affairs Committee, and let them know that affordability matters for everyone.
