Chicago Board’s Change in Medical Benefits Sparks Strike Threat

By Linda Chion-Kenney — October 24, 1984 4 min read
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The Chicago Board of Education announced this month that on Nov. 16 it will begin to deduct partial payments on medical-insurance premiums from employee paychecks--a move union officials say will trigger a strike in the nation’s third-largest school district.

“They have been told in no uncertain terms that if they implement those deductions, there will be a strike,” said Chuck Burdeen, spokesman for the Chicago Teachers Union, an affiliate of the American Federation of Teachers.

The move would shift some of the costs of medical-insurance premiums to some 41,000 school-district employees, including about 24,000 certified teachers, a board spokesman said.

Unions representing other employees--who include custodians, librarians, and other support-personnel--have joined forces with the teachers to fight the deductions.

Board Has ‘Regrets’

After announcing its decision to start the deductions next month, the school board issued a statement saying it “deeply regrets having to take this action.”

“However, there is no choice,” the statement continued, “given the board’s limited funding sources and budget constraints.”

The board, which is required by law to operate under a balanced budget, told the Chicago School Finance Authority this summer that it intended to shift the partial payment of medical-insurance premiums to employees.

The finance authority was created by the state in 1980 to oversee the finances of the Chicago system, which was then at the brink of bankruptcy. The authority must approve all major budget decisions.

Chicago teachers, who are working without a contract, voted in mid-September to authorize a walkout “if their paychecks were tampered with in any way,” Mr. Burdeen said.

On Oct. 10, employees received official notification of the board’s intent to start the insurance-premium deductions on Nov. 16.

Employees currently receive fullhealth coverage for themselves and their families at no cost.

No Flat Rate

Under the new plan, deductions would be based on 13 salary ranges, instead of one flat rate for all employees, said Leroy Hansen, director of the board’s insurance department.

Based on the average teacher-salary range of $22,500 to $27,500, the average annual deduction for individuals covered by Blue Cross/Blue Shield would be $343 annually, according to Robert Saigh, a school-board spokesman.

The average annual deduction for individuals covered under the Blue Cross family plan, he said, would be $408.

This represents roughly 25 to 30 percent of the total premium, Mr. Hansen said.

Blue Cross/Blue Shield actually acts as an administrator for the Chicago school system, which is self-insured, said George Munoz, president of the school board. That means, he said, that every time an employee gets medical attention, he or she must file an insurance claim with the school system.

Splitting the cost of premiums with employees, Mr. Munoz said, could help curb the board’s “continuously rising expense” of medical insurance.

$1.5-Billion Budget

The Chicago Board of Education’s current $1.5-billion budget includes $64 million for medical- and dental-insurance premiums for school-district employees, Mr. Hansen said. If the board were to pay the full premiums, it would need roughly $22 million more, he said.

While the move to split the premium with employees has helped board members balance their budget, it has not helped them at the negotiating table with the teachers’ union. On Oct. 16, the first negotiating session since Sept. 10 was held, but neither side made any concessions, Mr. Burdeen said. The groups were scheduled to meet again on6Monday of this week.

“I don’t think there is a teacher or education worker in the city that is willing to permit the board to make unilateral cuts in their medical coverage or pay,” Mr. Burdeen said. “The employees just won’t tolerate it. They haven’t tolerated it in the past and I don’t think they intend to start now.”

Budget-Cutting Familiar

The situation this year closely parallels last year’s situation in Chicago when teachers struck 15 days in October following the board’s implementation of a 7-percent pay cut, Mr. Burdeen said.

If the teachers and other school-district employees strike this year, he added, approximately 450,000 students in 600 schools would be affected.

Mr. Munoz noted that employees were not alone in being affected by budget cuts this year. About $10 million in cuts were made to education programs, he said, including the “Renaissance Program,” which was designed to upgrade high-school graduation requirements.

“Nobody is up in arms that we made serious cuts in the educational programs,” he said. “We did not put the whole burden on the employee side.”

Adding to the pressure on the school system’s budget, Mr. Munoz said, was the need to cut $20 million from an $87-million desegregation budget in view of an appeals court’s ruling last month that the federal government is not obliged to fund a major portion of the city’s desegregation effort. (See Education Week, Oct. 3, 1984.)

“That complicated matters,” Mr. Munoz said, “because now it is that much harder to say there is that much money around.”

Layoffs Planned

More than 520 professional staff members are to be laid off by Oct. 31, the deadline for making the cuts, according to Mr. Saigh.

Although the school board lacked a quorum last week to vote on a package of cuts, a school-board member, Martha J. Jantho, outlined $12 million in cuts that will be made, affecting the city’s 320 schools identified as “racially isolated.” She said $5 million will be slashed from the $12-million budget for 107 of the city’s most racially isolated schools. And the entire $7 million for programs in the less isolated schools is to be eliminated.

These cuts, she estimated, will affect more than 100,000 students.

Lawyers for the city had until Oct. 24 to decide whether to appeal the appellate decision of Sept. 26.

A version of this article appeared in the October 24, 1984 edition of Education Week as Chicago Board’s Change in Medical Benefits Sparks Strike Threat


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