School dollars and health reform

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Calls for more funding for education are common. Policy organizations may have played a significant role in the ideas included in the framework for Massachusetts’ nation-leading education reform, but teachers unions played the big role in pushing for more dollars into schools and insisting on more equity in school funding.

The push for more school dollars by no means excuses the quality of education we are getting in some urban areas. And by no means absolves teachers unions for seeking monopoly status in opposing the expansion of private school options, like parochial schools, for urban students. (The parochial schools largely do a better job at a much lower cost.)

But money is important. And that’s what budget season is all about. With yesterday’s Senate vote to approve its 2012 budget blueprint, some big questions have been answered. The biggest is related to how many dollars will go to kids in the schools—that is, how do we ensure that the skyrocketing health insurance costs of local employees does not crowd out actual classroom resources.

Here’s useful background. A recent study found that the state had increased aid to schools from 2000 to 2007 by $700 million. When someone says that there are $700 million of new funding going to schools, well, you think of better textbooks, refurbished classrooms, improved teacher training. Right?


During that same period, school-related health insurance costs increased by $1 billion, meaning that not only was that ‘new’ money burned but we threw in an extra $300 million from the previous funding level for health insurance costs.

If new resources intended to improve education are solely spent (and existing resources redirected to) health insurance, then let’s stop wringing our hands and talking about the children, and let’s instead say that we are adding dollars for health insurance. Let’s stop with discussions about the children when we hear the pleas for overrides.

What’s worse is that we have a solution that could purchase health insurance at a very high quality for far less—that would save our localities well over $100 million a year.

No-brainer, right? No. The unions, who have been good at securing funding increases, have, with few exceptions, fought changes in the status quo. The state took a swing at solving this problem in 2007 with a ‘consensus-driven’ bill that had widespread union buy-in. The results were meager. There were the usual public pronouncements and lots of newspaper ink spilled four years ago this July, when Governor Patrick signed into law the Municipal Partnership Act. The Governor then noted:

By permitting municipalities to join cheaper state-run systems, we foster just the kind of engaged partnership we need between state and local government to move Massachusetts forward.

That partnership was a largely unworkable process that resulted in, you got it, the status quo.

Now, in 2011, there are now three competing proposals on the table, the Governor’s, the House, and the Senate.

As Pioneer has blogged previously, the Governor’s effort

signals a desire to get communities into GIC or give them control over plan design but pushes the details off onto the regulatory process. The House is much clearer—communities can adjust plan design up to the equivalent of the biggest plan for state workers or enter GIC, so long as 10 percent of first year savings is returned to workers. The Senate takes a different approach—communities can negotiate their way to plan design changes or entering GIC but they have to undergo an approval process by a 3 person board (1 appointee from the unions, 1 appointee by the municipality, and 1 by the Secretary of Administration and Finance).

Crucially, that committee can provide up to 33% of the first year savings to employees.

Not only the unions have fought for more resources, but also certain policy organizations. My own organization has been supportive of increases in funding for schools, though not as forthright as organizations like the Massachusetts Budget and Policy Center and the Mass Taxpayers Association, the latter of which a few years ago was calling for 40 percent of the state budget to be redirected back to localities. I think MTF’s research director, Andrew Bagley, got this wrong in yesterday’s Globe:

You get to the exact same place if you’re a municipality; it’s just a different process.

The Globe’s Michael Levenson also gets it wrong today, suggesting that the choices before us—the Governor’s, the House’s and the Senate’s—are all sort of interchangeable. They are not for two reasons:

  • The potential for mischief at the 3 person board level is high—just ask Boston how their three-person arbitration board for the firefighters’ contract worked out
  • 33% is more than 10% (tens of millions of dollars more)

The disinterest in the details (and long-term impacts) of the three proposals is surprising.

This is a moment of truth for the teachers unions and all those who have long demanded more resources for our schools. Calls for investment, yup, got it. But the flipside of such calls is the responsibility to make sure that the funds are spent wisely. And that is why it’s troubling to see so many of the voices who demand more funds either actively looking to thwart the efforts to address municipal health care costs on Beacon Hill, or looking for a comfortable ‘consensus’ so they can say they got “something done.”

It’s the time for the ‘more resources’ crowd to show their commitment to responsibility. They should be leading the fight to rein in municipal health care costs and supporting the stronger House plan, not engaging in the neverending quest for ‘consensus’. Otherwise, all the calls for investments to improve education and ensure public safety and local services are just mouthing easy platitudes.

Crossposted at’s Rock the Schoolhouse. Follow me on twitter at @jimstergios, or visit Pioneer’s website.