It may come as a surprise that the nation’s second largest school district, an entity that employees over 25,000 educators, had been fighting a pitched battle over providing just 10 employees with lifetime health benefits. But that’s the situation Los Angeles Unified School District found itself in after El Camino Real Charter High School offered select teachers $30,000 checks to return to district schools at the end of their careers, therefore transferring the costs of the generous healthcare benefits from the charter school to the district.
Back in 2010, El Camino’s faculty overwhelmingly voted to convert the high performing school into a charter. School officials expected an additional $415,000 in annual state funding to flow into their coffers after the conversion. “This is not about having any animosity with the district ... this is a financial decision,” then principal Dave Fehte told the Los Angeles Daily News.
While many Los Angeles public schools have made the switch to charter status to get out from under teachers’ union contracts, El Camino kept the teachers’ union—and the contract—in place. With that decision El Camino agreed to take on the costs of the district’s substantial benefit package for teachers, but there was a loophole: If teachers returned to a district school within five years, the district would be responsible for footing the bill for retirees’ lifetime health benefits. Just shy of that deadline, the cash payouts helped convince 10 employees to move back to district schools.
According to the Los Angeles Times, nearly 50 charter teachers had done the same in the past without raising the district’s ire, but this time the LAUSD cried foul, pointing to the price tag of covering the benefits. The Times reports that the district was particularly displeased with the tactic of using a financial incentive to entice the teachers back to the district.
But on Monday, the Los Angeles school board agreed to cover the teachers’ benefits after all. The newspaper reports that pro-charter and pro-union members united to protect teachers at one of the city’s rare unionized charter schools. This comes just weeks after the United Teachers Los Angeles filed a grievance against the district that observers suspect asserted that LAUSD was contractually obliged to provide the benefits to the 10 employees.
The move raises bigger questions about whether the district will ever really be able to tackle its $13.6 billion unfunded liability for employee benefits. The Times reports that the 10 employees will add another $2.5 million to $4.2 million to that debt.
While El Camino has used this switching tactic most aggressively, sending 21 teachers back to the district over the last few years, other charter schools have taken the approach as well. But even without those 21 teachers to pay for, El Camino is still staring down a potential $34 million liability for retirement costs.
While providing lifetime healthcare benefits was once seen as a cheap alternative to pay raises, the price of providing retirees with healthcare benefits has reached $20 billion in California.
A version of this news article first appeared in the Teacher Beat blog.