Education Funding

Survey Finds Spiraling District Health-Care Costs

By Jeff Archer — August 09, 2005 4 min read
  • Save to favorites
  • Print

A survey of school district budget officials shows that employee health care now costs their districts nearly $900 per pupil on average, an expense that they say seriously affects their ability to pay for instructional services.

The cost of providing health-care coverage for the more than 800 districts responding jumped an average of almost 10 percent in the most recent fiscal year for which they had data, according to the poll by the Association of School Business Officials International. By contrast, the responses showed, the districts’ revenues rose an average of 2.3 percent in that time.

View the results of the health care survey from the Association of School Business Officials International.

The results, released late last month, come as many districts are struggling for a solution.

In Buffalo, N.Y., labor and management have been feuding in and out of court over a plan to save money by consolidating three health-insurance options now available to employees into one.

Anne W. Miller, the executive director of ASBO International, said her group did the poll to show how health insurance is driving overall district spending. She likened the findings to recent figures showing that General Motors Corp. spends $1,525 per vehicle on health-care coverage for its workers and retirees.

“What strikes me is that our findings are almost perfectly aligned with what manufacturers are telling the public is such a problem,” she said. “I think it’s important that the public and policymakers know that education is being likewise impacted.”

Costs Linked to Cuts

With a membership of about 6,000 worldwide, the Reston, Va.-based ASBO International represents district officials in charge of their systems’ finances. The group e-mailed its survey to its 4,500 U.S. members, of whom 867 responded. Statistically, the results are not nationally representative.

Respondents reported that their districts’ average annual cost of health care was $895 per student, out of total per-pupil spending from all sources of $9,400. More than two-thirds agreed or strongly agreed that such costs had “negatively affected” spending on academics.

See Also

See the related item,

Chart: Competing Expenses

Asked which areas of their budgets had been cut to deal with health-care spending, 43 percent said facility maintenance, 39 percent said teaching positions, and 34 percent said technology.

Fifty-eight percent rated health-insurance costs as one of their “biggest concerns” as budget officials.

James A. Williams, the superintendent in Buffalo, agrees. He has pushed a proposal to save up to $27 million over two years by putting all employees in the 43,000-student district on one health-care plan, rather than continuing to offer three options. The alternative, he says, is major budget cuts.

“We have to find the money from someplace,” the superintendent said in a recent interview.

But the Buffalo Teachers Federation argues that the district can’t make the change without negotiating it with the union. In June, the union won an injunction on the issue. Although that order has been lifted, the BTF has asked the state labor board to intervene.

Philip Rumore, the president of the BFT, said his group doesn’t object to going to a single insurance carrier, so long as it costs the same to teachers and matches the benefits in the three options now available. Union and district officials disagree on whether that would be the case.

“To argue that teachers or the employees should pay more is missing the whole problem,” Mr. Rumore said. “You’re just asking someone else to pay for the costs that are out of control.”

Late last month, Mr. Williams announced plans to make the change despite the opposition. But he also issued layoff notices to more than 100 district employees on the chance that a labor ruling goes against him.

‘Common Ground’

District leaders elsewhere agree that health benefits are a major topic in contract talks.

Asked how much medical coverage was an issue in union negotiations, 71 percent of the respondents to the ASBO International study said to “a great extent.”

Pressed for their views on possible solutions, 70 percent said they considered shifting insurance costs to employees to be “promising.” Fifty-three percent saw merit in “wellness” programs aimed at encouraging healthier lifestyles. About half saw value in “educating employees about benefits.”

Mohsin Dada, the assistant superintendent for business services for the Schaumburg, Ill., district, says it is possible to work with employee groups to rein in costs by using multiple strategies. The school system serves approximately 15,000 students in a northwest suburb of Chicago.

Working through a benefits committee that includes the heads of the district’s employee unions, the Schaumburg system has cut its annual bill for its employer-based health insurance from $8.8 million to $7.4 million since 2003, Mr. Dada said.

Among other strategies, that meant negotiating better rates for fixed costs, such as claims handling. Staff members accepted some higher out-of-pocket expenses, including incentives to use lower-cost generic drugs. Efforts to offer on-site care, such as flu shots, at schools were expanded.

“Our objective was to sell this as financial security for the district as to our ability to give good raises and provide additional services for students,” Mr. Dada said. “So I think we had common ground to work with.”

Related Tags:

A version of this article appeared in the August 10, 2005 edition of Education Week as Survey Finds Spiraling District Health-Care Costs

Events

This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
School Climate & Safety Webinar
Building Your School Safety Roadmap: Key Priorities for the Upcoming Year
What should be on your school's safety roadmap this year? Join experts to discuss priorities, preparedness, and best practices.
Content provided by Evolv Technology & IdentiSys
English Learners K-12 Essentials Forum Rethinking Instruction for English Learners
Join this free event to explore teacher preparedness, family communication, and strategies to ensure equity and opportunity for students.
This content is provided by our sponsor. It is not written by and does not necessarily reflect the views of Education Week's editorial staff.
Sponsor
Artificial Intelligence Webinar
From Passive to Active Reading: Student Engagement in the Age of AI
What the research tells us about active reading and student engagement—and what it means for teaching in an AI-enabled world.
Content provided by Pearson

EdWeek Top School Jobs

Teacher Jobs
Search over ten thousand teaching jobs nationwide — elementary, middle, high school and more.
View Jobs
Principal Jobs
Find hundreds of jobs for principals, assistant principals, and other school leadership roles.
View Jobs
Administrator Jobs
Over a thousand district-level jobs: superintendents, directors, more.
View Jobs
Support Staff Jobs
Search thousands of jobs, from paraprofessionals to counselors and more.
View Jobs

Read Next

Education Funding Ed. Dept. Meets Research Spending Deadline—But Bigger Funding Challenges Loom
The Institute of Education Sciences finished spending more than $170 million set to expire Sept. 30.
3 min read
Director of the United States Office of Management and Budget Russell Vought walks down a staircase on Capitol Hill in Washington, Thursday, July 16, 2026.
Russell Vought, director of the White House Office of Management and Budget, walks down a staircase on Capitol Hill in Washington on July 16, 2026. The OMB withheld millions of dollars from the U.S. Department of Education's research arm for months, raising the possibility it wouldn't spend the money on education research and data collection in time for its Sept. 30, 2026, expiration.
Allison Robbert/AP
Education Funding Trump's Ed. Dept. Is Still Disrupting Grants—Just More Quietly Than Before
The agency is deploying subtler procedures that result in fewer new grants and less stability for recipients.
11 min read
Senate Minority Leader Chuck Schumer, D-N.Y., center, confers with Sen. Brian Schatz, D-Hawaii, talk following a Senate Democratic Caucus meeting, at the Capitol in Washington, Tuesday, Feb. 3, 2026.
Sen. Brian Schatz, D-Hawaii, (right, speaking with Senate Democratic Leader Chuck Schumer) secured a commitment from Education Secretary Linda McMahon to supply additional funding for Native Hawaiian Education Program grantees when the U.S. Department of Education hadn't launched a competition for new grants. The Trump administration practice of abruptly canceling existing competitive education grants has slowed, but the Education Department is using procedures that result in fewer new grants and less stability for funding recipients.
J. Scott Applewhite/AP
Education Funding Trump, Bucking Congress Yet Again, Cancels $100 Million for Education
A "pocket rescission" hits programs for migratory farmworkers and college-level language instruction.
7 min read
Russell Vought, acting director, Office of Management and Budget, right, and Homeland Security Secretary Markwayne Mullin listen during a cabinet meeting, Friday, July 31, 2026, at Camp David, the presidential retreat, near Thurmont, Md., Friday, July 31, 2026.
Russell Vought, director of the White House Office of Management, listens during a Cabinet meeting on July 31, 2026, at Camp David, the presidential retreat, near Thurmont, Md. The White House has announced an $810 million package of "pocket rescissions," saying it won't spend the congressionally appropriated funds before the end of the 2026 federal fiscal year, which ends Wednesday. The rescissions include nearly $100 million for U.S. Department of Education program.
Jacquelyn Martin/AP 
Education Funding Letter to the Editor Expired Funds, Unreliability Harm Rural Schools
Responsible planning requires predictable funding, says a school district superintendent.
1 min read
Education Week opinion letters submissions
Gwen Keraval for Education Week