Health benefit savings could have paid for wage increases
The Sacramento City Teachers Association and the Sacramento City Unified School District are on a collision course. The negotiations have been stalled for months. The district has proposed a 2.5 percent wage hike and the teachers association wants 5 percent instead. On May 12, the union escalated the tensions, with the SCTA work council unanimously approving a one-day-strike vote. If the membership approves, then the SCTA bargaining team can set the date for a strike.
The union correctly points out that its teachers are paid less than other California teachers, particularly those in the Bay Area and the big districts in Southern California. The district correctly points out that the costs for health benefits for SCTA are significantly more than other California teachers’. SCTA teachers receive around $20,000 in benefits annually, while the average cost of a teacher’s benefits in California is $13,000.
The union says that the lower wages have made it hard for the district to find qualified teachers. The district counters that if you include the cost of benefits, SCTA teachers’ total compensation is actually higher than compensation in the districts that are the most comparable to Sacramento’s cost of living—Elk Grove and San Juan.
While there will and should be differences of opinion between the union representatives and the district administrators, what is frustrating about this dispute is that it could possibly have been avoided with just a bit more cooperation between the union and the district.
Here’s how. According to the district, the difference between the offered 2.5 percent and the desired 5 percent raise is $4.9 million.
The higher costs of health benefits for SCTA members as compared to other California teachers are around $17.5 million. While the SCTA teachers have a great health plan, the district and Sacramento taxpayers are paying way too much for it.
That is why, in 2014, the district proposed sending its health care bid out to market instead of simply accepting the proposed increase. The district estimated this could have saved between $3 million and $6 million without impacting health care coverage. This savings is approximately the amount needed to meet the union’s desired wage increase.
Unfortunately, the union contract named Health Net and Kaiser specifically, so even if the medical benefits stayed the same, changing the health care provider required a modification of the union contract. The union refused. And so the district was unable to put its health care contract out to bid, and continues to pay too much for health care benefits.
When this was going on, I asked SCTA Executive Director John Borsos why he was not in favor of switching health care companies. I thought he’d want to see the money freed up for wage increases. He told me that I did not understand labor negotiations. That is probably true, but I do understand basic budgeting.
The union’s unwillingness to cooperate with the district to reduce health care costs was shortsighted. If the union was facing an adversary hellbent on shutting them down, I could understand its combative stance. But that’s not the case. The other unions in the region are working more cooperatively with their districts. If they really want what’s best for their members and the students, the SCTA should do the same.