Education Funding News in Brief

Indiana Union Crisis Forces Layoffs

By The Associated Press — June 16, 2009 2 min read
  • Save to favorites
  • Print

Indiana’s largest teachers’ union is laying off dozens of employees in the wake of a financial crisis that spurred investigations of its troubled insurance trust.

Union officials representing two groups of workers at the Indiana State Teachers Association say at least 40 people will lose their jobs after 60 days’ notice. A third union representative would not comment on how many people in her division will be laid off, but the total number of layoffs is likely to be higher than 40 out of a staff of 150 employees.

The ISTA and the National Education Association, its national parent organization, are trying to scrape up enough cash to pay 650 people receiving long-term disability benefits from the ISTA’s insurance trust, which is under investigation.

The Indiana association had previously said it didn’t have enough money to cover the long-term disability claims, which could cost $45 million to $65 million over the next 15 to 20 years. But ISTA and NEA officials said last week that they will find the money to pay the claims.

Indiana’s is the first state affiliate to request a trusteeship from the NEA, allowing the 3.2 million-member national organization to take over operations as investigators determine whether insurance-trust managers did something more than make risky investments.

NEA President Dennis Van Roekel, who was in Indianapolis last week to reassure Indiana members that long-term-disability claims would be paid, said members of the NEA in other states won’t be affected and dues in other states will not rise because of Indiana’s problems.

The state union will have to repay the NEA over the long term, but the national union wants its state affiliates to succeed, Mr. Van Roekel said.

“The whole purpose of having a union is that we all come together,” he said. “When one is in need, we provide the necessary assistance.”

Aside from the layoffs, the Indiana state affiliate could free up some money by increasing dues for teachers, which are set at $449 a year. The union could also consider selling its office building across from the Indiana Statehouse.

The Indiana Department of Insurance says the association’s insurance trust has a net worth of negative $67 million. Dan Clark, the deputy director of the ISTA, said last month that allegations had been made of “inappropriate fees and inappropriate trading as well as inappropriate investments.”

The Indiana secretary of state’s office has declined to say whether it is investigating, but Mr. Clark said the office had issued subpoenas for two former ISTA employees who made decisions about the trust. One has since retired and another has resigned, although the reasons behind the personnel changes were unclear. The investment firm Morgan Stanley has said that it has handled the ISTA’s trust since 2008 and that it would fully cooperate with investigators.

The Indiana State Teachers Association also is investigating and said it could take legal action against those involved with managing the trust.

A version of this article appeared in the June 17, 2009 edition of Education Week

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
Assessment Webinar
Reflections on Evidence-Based Grading Practices: What We Learned for Next Year
Get real insights on evidence-based grading from K-12 leaders.
Content provided by Otus
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
Student Well-Being Webinar
Creating Resilient Schools with a Trauma-Responsive MTSS
Join us to learn how school leaders are building a trauma-responsive MTSS to support students & improve school outcomes.
School & District Management Live Online Discussion A Seat at the Table: We Can’t Engage Students If They Aren’t Here: Strategies to Address the Absenteeism Conundrum
Absenteeism rates are growing fast. Join Peter DeWitt and experts to learn how to re-engage students & families.

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 States Get Antsy as Education Department Layoffs Delay Millions for Schools
Reimbursements for federal education aid are weeks late, according to state chiefs.
7 min read
Illustration of a clock and it's shadow is an hourglass with the symbol of money in the sand.
DigitalVision Vectors
Education Funding What the Latest Federal Funding Law Means for Schools
The new federal spending resolution leaves the door open for continued disruption to federal education funding.
6 min read
Broken and repaired: 3D symbol of a Dollar.
Education Week and Getty
Education Funding Trump Admin. Ordered to Temporarily Restore Teacher-Prep Grants in 8 States
A federal judge chided the Trump administration for offering what amounted to "no explanation at all" for terminating the grants.
4 min read
California Attorney General Rob Bonta speaks at a press conference to announce a lawsuit against the Trump administration over budget cuts to teaching training funds, at the Ronald Reagan Federal Building on Thursday, March 6, 2025, in Los Angeles.
California Attorney General Rob Bonta announces a lawsuit against the Trump administration over the cancellation of teacher-training grants on March 6, 2025, in Los Angeles. A judge on March 10 ordered the temporary reinstatement of the funds in California and seven other states.
Juliana Yamada/Los Angeles Times via TNS
Education Funding Trump Axed $400M in Funds for Columbia. Could a School District Be Next?
One legal expert described the move as arbitrary: “How can you predict what arbitrary punishment may come your way?"
7 min read
Student protesters gather inside their encampment on Columbia University campus on April 29, 2024.
Student protesters gather inside an encampment on the Columbia University campus on April 29, 2024. The federal government has terminated $400 million in funds to the Ivy League university although investigations into alleged antisemitic harassment are continuing.
Stefan Jeremiah/AP