Education Funding

Survey Finds Districts Pressed by Health Costs

By Jeff Archer — July 25, 2005 1 min read
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Costs for health care now amount to nearly $900 per pupil, seriously affecting school districts’ ability to pay for instructional services, according a survey of district budget officials across the country.

Released July 25, the poll by the Association of School Business Officials International shows that the expense of providing health-care coverage to workers and retirees jumped nearly 10 percent in the most recent fiscal year for which districts had data. In contrast, districts’ revenues rose 2.3 percent in that time.

Results from The Rising Cost of Health Care survey are available from the Association of School Business Officials International.

The survey comes as the strain of such costs is becoming more apparent in other sectors of the economy. Financially struggling General Motors Corp. says it spends $1,525 per vehicle in the United States on health-care coverage for its workers and retirees—more than it does on steel.

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

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 and 867 responded. The results are not nationally representative.

In the districts that responded, the average annual cost of health care was reported to be $895 per student, out of total per-pupil spending from all sources of $9,400. About two-thirds of the officials surveyed agreed or strongly agreed that medical insurance costs had “negatively affected” spending on academics.

About 70 percent cited shifting costs to employees, through such means as higher deductibles, as a promising solution. Asked to what extent health insurance was an issue in contract negotiations with employee unions, 71.1 percent said “a great extent.”

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