UTLA Rejects LAUSD Olive Branch As Board Examines Healthcare Cost Crisis…Again

Board Member Richard Vladovic (BD7) and LAUSD Superintendent Austin Beutner at the annual Board retreat Wednesday

Board Member Richard Vladovic (BD7) and LAUSD Superintendent Austin Beutner at the annual Board retreat Wednesday

LAUSD is making it clear to United Teachers Los Angeles that it wants to avert a painful strike by offering teachers the same 6 percent raises that other employees are getting. UTLA President Alex Caputo-Pearl, however, continues to shoot down the notion that such a deal is possible.

After a five-hour LAUSD Board retreat Wednesday exploring the district’s healthcare cost crisis, Beutner met with Caputo-Pearl and sent him a follow-up letter mentioning the raises that administrators, bus drivers and others are getting, saying he wanted to reach a “similar agreement” to give teachers raises and was willing to meet any time to work out a deal.

“We must do everything possible to keep our schools open so our students don’t miss the opportunity to receive the best education possible,” Beutner wrote. “We want to minimize any disruption to students, their hand-working families and the communities we serve. We hope UTLA shares this goal. I am reminded of an old adage, ‘when elephants fight, the grass gets trampled.’ It is a responsibility we share, despite our differences, to make sure students are protected.”

UTLA is asking for 6.5 percent raises retroactive to 2016-17, one year earlier than LAUSD is willing to apply any increase. Nevertheless, with just a half-percentage point separating UTLA’s salary demands from what LAUSD has budgeted and seems willing to offer, the differences between the two sides on teacher raises hardly seem insurmountable.

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Even so, UTLA recently declared an impasse in talks, sending the two sides to mediation. While Beutner said that he and the union had “found common ground” in the Wednesday meeting, Caputo-Pearl later dismissed the idea that a deal is possible.

“There is not the outline of a deal,” he told the Los Angeles Times. “Nothing could be farther from the truth.”

Caputo-Pearl’s comments lend credence to suggestions that he wants a strike no matter what LAUSD offers teachers – in order to bolster his own career and land a bigger job once he terms out.

Such a move would clearly harm kids by depriving them of their right to an education. And for the many LAUSD families who rely on schools for breakfast and lunch, and who will lose wages if forced to take off work to care for their children, the burden of a strike is potentially devastating.

The district-union deadlock is especially puzzling given that UTLA negotiated a deal in the spring to maintain LAUSD’s extremely generous health benefits for all employees for three years. While no changes to health plans are on the table in these contract talks, the cost of retiree healthcare remains one of the biggest reasons LAUSD is teetering on the brink of insolvency.

LAUSD Chief Financial Officer Scott Price told the Board Wednesday that LAUSD spends more on retiree healthcare benefits and offers far more generous plans to retirees than other districts in the state, including San Francisco, San Diego, Long Beach, Oakland and San Jose.

Other districts offer either no health program for retirees or a more limited program for retirees, and they require retirees to make a contribution. LAUSD offers free lifetime healthcare for retirees and their spouses after a certain number of years of service.

There are three main causes of LAUSD’s financial problems, Price said: healthcare costs, pension costs and employee salaries. Pension costs are set by the state, and there’s nothing LAUSD can do about it. So LAUSD is left with only two choices without the increased state funding that the superintendent believes all stakeholders should fight for: either rein in retiree healthcare costs, or start laying off many current employees (which would likely lead to big class-size increases, too).

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The state provides about $16,000 in per-pupil education funding per year, and the per-pupil cost of employee healthcare is rising dramatically, leaving less and less for educating kids. The employee healthcare costs will shoot up from $2300 in per-pupil funding in 2018-19 to more than $5,123 per pupil within 15 years.

“We have to address healthcare,” Price said. “In 15 years, our healthcare costs will go up by 122 percent on a per-pupil basis…. It will crowd out what we need to do for our students.”

Price suggested several ways to cut costs, including covering only employees and retirees, not spouses and dependents, which would save almost $460 million a year or $885 per pupil. Covering only one dependent would save $146 million per year. Asking employees to share 20 percent of the premium costs would save $206 million per year, and moving everyone to the lowest-cost plan would save $169 million a year.

A nearly identical discussion took place at the August retreat a year ago, but very little progress has been made on the issue since then. One change to the health plan offerings did save $50 million. But the Board failed to address the cost issue in a serious way when it voted in the spring to maintain contributions at their current level for three years.

Board Vice president Nick Melvoin (BD4), one of only two Board members who voted against that deal, rightly pointed to a “failure of political actors” on the Board to fix the problem.

Aside from the contribution amount it agreed to make in the spring, LAUSD actually has little control now over the health plans offered to employees. Instead, benefits are set by a Health Benefits Committee, and LAUSD only has one seat among its many employee labor unions on that committee.

Employee unions did agree to create a new working group to examine ways to save on healthcare costs, and parents were supposed to have a seat at that table. Board member Richard Vladovic (BD7), however, decried the fact that this working group has yet to meet.

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“None of that ever happened. Where’s the transparency?” asked Vladovic. “We should be talking about this. All nine [unions] and the district all agreed to do this. We should have been having those meetings to let this committee made up of union folks, district and parents get together and talk about it and report back on their progress. Well folks, I have been waiting, and the covered wagon hasn’t even left Dodge. Why?”

District officials said the working group would start meeting this fall, but that’s “seven months late,” Vladovic said. “This is serious business. We could go belly up.”

Vladovic also reiterated his commitment to protecting the promises made to retirees who negotiated those benefits in lieu of salary increases when they were working. Changes, however, could be made to eligibility for new employee hires, he said.

Labor unions representing administrators, office workers and classified employees such as bus drivers and special ed aides have agreed to make eligibility changes for lifetime health benefits. New employees will now have to work for 30 consecutive years (instead of 25) and have their age and years of service add up to 87 (instead of 85). That will save money on the costly years when employees retire before age 65 and are not yet eligible for Medicare.  

UTLA, however, has not agreed to make any similar compromise to help solve the problem – even though its failure to act could lead to layoffs for its active teachers in the near future. So far, the teachers union appears willing to protect retirees even at the expense of its current employees – and kids.