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Published in Print: January 26, 2005, as Concern Escalates Over Wisconsin’s Rising Health Costs

Concern Escalates Over Wisconsin’s Rising Health Costs

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Wisconsin teachers have a choice, according to Republicans in the state legislature: Scale back your health benefits in exchange for salary increases, or give up any hope of raises.

But teachers deserve better than that trade-off, say the Democratic governor and his allies in the state teachers’ union. Teachers, they contend, need a new set of bargaining powers that will ensure they can get pay increases without cutting into benefits.

That debate will take center stage during the 2005 Wisconsin legislative session, which began Jan. 3. But the partisan nature of the disagreement makes it unlikely that the sides will compromise, says one participant.

“I’m not sure there’s a desire to do something,” said state Sen. Robert Jauch, a Democrat who backs the union’s position.

But Republicans say skyrocketing health costs are motivating them to act. “People are looking at it and saying, ‘Whoa, maybe we better do something,’ ” said GOP state Sen. Luther S. Olsen.

As state budgets remain tight and health-insurance costs escalate, teacher compensation and benefits will be a significant issue in other states as well.

‘Rolls-Royce’ Coverage

In Oregon, for example, the state school boards’ group is fighting a proposal to create a state-run insurance pool of all the state’s public school employees.

“A government-run monopoly eliminates the ability of local carriers to offer cost-effective plans to local districts,” the Oregon School Boards Association said in a statement responding to the proposal by Gov. Theodore R. Kulongoski, a Democrat.

In Wisconsin, the debate over compensation began as soon as the legislature convened.

On Jan. 4, the Wisconsin Policy Research Institute issued a report saying that school districts could save $100 million annually by switching teachers to the state’s health plan. Under current law, a district can opt in to the state system only if teachers agree.

Almost 78 percent of the state’s school districts buy health insurance from a nonprofit group run by the Wisconsin Education Association Council, the state’s largest teachers’ union.

Mr. Olsen said the union’s benefits are “pretty much a Rolls-Royce.”

The research institute estimated that if districts were to join the state’s health plan, they would save enough to provide every teacher with a $1,448 raise.

The union’s president countered that the research ignores the fact that teachers negotiate to receive the union’s health benefits because the union’s nonprofit provider offers more than the state and private companies.

“If there is a better product for a cheaper cost,” said Stan Johnson, the president of the 98,000-member National Education Association affiliate, “they'd take it.”

Wage Issues

The best way to improve teacher salaries, Mr. Johnson said, is to increase teachers’ power at the bargaining table.

Under a 1993 state law, districts can impose a contract on teachers if it raises total compensation—defined as wages and benefits—by at least 3.8 percent. State law refers to the measure as the “qualified economic offer,” or QEO.

Since the QEO was first enacted, Wisconsin’s average teacher salary has fallen from the 12th highest in the nation to the 24th, Mr. Johnson said.

As health-insurance costs have increased in recent years, teachers in some districts have incurred pay cuts under the QEO in order to maintain current benefits, Mr. Johnson said.

“We don’t have a collective bargaining law,” he said. “It’s almost like collective begging.”

In his Jan. 12 State of the State Address, Gov. James E. Doyle, a Democrat, called the QEO “a roadblock to reform” of teacher compensation, and proposed eliminating it. Because of the QEO, he said, school boards and teachers are locked into outdated salary schedules that make it difficult to recruit and retain teachers.

But Republicans are unlikely to support that proposal. They rejected a similar attempt last year, Mr. Johnson said.

This year, however, Sen. Olsen said that Republicans are responding to school boards’ request to give them more flexibility under the QEO, which requires districts to keep benefits the same when calculating the amount offered in union contracts.

By allowing districts to select the state health-insurance plan over the union’s plan, districts would get some flexibility while ensuring high-quality benefits, Mr. Olsen said.

Sen. Jauch said giving districts power to unilaterally change benefits is unfair to teachers.“They negotiated this [union] plan,” he said. “They probably gave up salaries to get these benefits.”

Vol. 24, Issue 20, Page 26

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