Exclusive: New health benefits help push LAUSD into debt, document shows
Mike Szymanski | August 31, 2016
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LA Unified Superintendent Michelle King signed off on new health benefits for teachers assistants and playground aides even though the agreement stated that it will help push district reserves into the red by half a billion dollars within two years.
And the question in the document asking how the district would replenish those reserves was left blank.
The collective bargaining agreement with SEIU Local 99 signed Aug. 10 by King notes that “the district will have to identify additional balancing strategies to address the cost of the agreement,” and that “program adjustments are needed to accommodate the additional costs.”
According to the agreement, the superintendent acknowledges that the impact of the agreement will cut existing unrestricted reserves in half next year, then result in a $506 million deficit in 2018-2019. The unrestricted reserves meet the state minimum reserve requirement for this school year and next year, but then a “NO” box is checked for the 2018-19 school year.
The new health benefits, which will cost the district an additional $16 million a year, was approved unanimously last week without discussion by the school board and helps 4,197 employees who make an average of $28,000 a year pay for their health benefits. The total cost for the certificated and classified salaries is $117 million a year before the agreement.
Some of the costs of the health benefits will be absorbed by the state’s Local Control Funding Formula and soften the blow to about $5.7 million a year, according to the Memorandum of Understanding signed between the union and the district.
Beginning next school year, teachers assistants who work 800 hours or more a year will get their medical, dental and vision benefits paid for, valued at $506 per month per worker. They will be able to enroll in the Kaiser Permanente plan or a comparable plan.
Playground aides who work 1,000 hours or more a school year will get half of their medical, dental and vision paid for, a benefit of about $253 a month.
Family members, who are fully covered in teachers benefits, are not insured by this agreement for these employees. This also does not involve retirement benefits.
In the district’s original counter-proposal, the superintendent and school board referred to the findings of the Independent Financial Review Panel, which suggested cutting health benefits and decreasing staff by nearly 10,000. Administrative staff increased this year.
In the document signed by King, “specific impacts” of the agreement were listed as: “This agreement impacts the purchasing power of school sites, especially for limited, restricted funding sources. Positive impacts could be claimed in improved quality staff and organizational climate.”
It adds, “The district will have to identify additional budget balancing strategies to balance the one-year deficit” of $5.7 million.
In the section titled “concerns regarding affordability of agreement in subsequent years,” the agreement states: “The out-year impact of this agreement compounds existing budget imbalances brought about by increases in fixed costs as well as decreased revenues due to enrollment decline.”
Teacher assistant Andrea Weathersby, who was on the bargaining team for Service Employee International Union Local 99, told the school board last Tuesday that the agreement is going to be a big help for her. She is an LA Unified parent, as are many of the other workers getting the new benefits. “Unfortunately, there have been times when my children have had to skip the arts classes they love because I need to pay for their health care instead. How can you tell a child, ‘You can’t’?”
It may not go as far as the union wanted, but the agreement helps, SEIU Local 99 executive director Max Arias said at the board meeting, and added, “These are the mothers and fathers of district students, educators committed to keeping our children safe and learning, LAUSD graduates, future teachers and members of our Latino and African-American communities who have historically suffered from unequal access to quality health care.”
School board President Steve Zimmer heralded the deal, pointing out that these workers have direct interaction with the children on a day-to-day basis, and the decision is making up for past staff and budget cuts. “I am proud to support the action which ensures that our workers, and their families, will have access to expanded health care options,” Zimmer said in a statement. “We need to make sure that the women and men who take care of LAUSD’s children by day can care for their own families by night.”
Board member Monica Garcia said, “I am proud to stand with every employee – from our bus drivers to our cafeteria workers, from our maintenance professionals to classroom support staff. You help make Los Angeles great, and we look forward to our continued partnership.”
And school board member George McKenna added, “Providing health and welfare benefits to our employees is the right thing to do and will further strengthen the relationship with vital members of our school families.”
King, who is working on a budget plan that she said she hopes will off-set the additional expenses in the upcoming years, said, “We are pleased to be able to extend health and welfare benefits to support more of the hard-working employees of SEIU Local 99.”
SEIU Local 99 represents nearly 30,000 employees throughout Southern California in public and non-public organizations in early education, child care, K-12 and community college levels and includes maintenance workers, gardeners, bus drivers, special education assistants, custodians, playground workers and cafeteria workers. Nearly half of the union members are parents or guardians of school-aged children, the union said.
King added, “We believe it is in the best interest of the district to support the teacher assistants and playground aides who are committed to providing a safe and nurturing learning environment for our students.”