2/16/2007 Ruth Robarts discusses "Concessions in Advance of Negotiations", Health Care Costs, elections and the QEO with Vicki McKenna

Vicki McKenna: Here's what's coming up on the program this afternoon. We're going to get into the issues surrounding the school board races, actually a pretty big issue, and that is the operating budget. How can we continue to afford the money that we lay out? Well, there're all kinds of suggestions out there. One of them of course is to take a look at the health care contracts that are offered to teachers and is there some savings we can find, if perhaps we could put it out for a competitive bid? You've heard us discuss this on the air before. We're actually going to talk a bit about that, and why that is more problematic than it sounds like.

In just a moment we'll get with Ruth Robarts who is the outgoing Madison school board member, and no, we can't talk her into staying. She's already served a decade. She says she's been there long enough. She's taken it upside the head long enough on the school board.

First up though, it's Ruth Robarts and we're talking about school, the budget. I mean, you know, we're always complaining about not having enough; it's never enough. We always debate whether we should go to the taxpayers for more. Welcome to the show Ruth. It's nice to have you.
Ruth Robarts: Thank you Vicki.
Vicki: So let's focus on something that you and I have talked about on the air before, and that is: the health care coverage that the teachers receive. Many of us out here estimate that if in fact we put that out for a competitive bid we might be able to see some significant savings when it comes to the cost to cover the teachers. Right now it's about 17 percent of the budget, so we're thinking perhaps there is a way to save the district some money, the taxpayer some money. But no, that's just not the way it's going to happen is it?
Ruth: Well, so far, no. You know, I agree with you; competitive bidding needs to be in there. Because we do collective bargaining, you know it takes a slightly different form than it would be if we were a private employer and were able to just go out and get competitive bids. But one of the models we need to be following is the Sun Prairie School district which recently got together with its union, got an outsider, you know hired somebody who was objective as a consultant. They surveyed the teachers to see what they felt they really absolutely needed in health insurance and then the union and the district use their earning power, instead of on each other, on the local HMOs. They save millions of dollars.
Vicki: Why can't we?
Ruth: Well, we'd have to go that same route. We have to be sure; we have to convince the union to engage in that kind of process and, you know, be successful at it. So far, although I've brought that up a few times, we don't seem to be going there. Not this time.
Vicki: Well, what I have is a document that, as I understand, this is a public document. I'm operating under the assumption that it is, where the district has essentially taken health care negotiations off the table when it comes to what will happen if in fact there is an impasse in contract negotiations with MTI. So if you take health care negotiations off the table, and by the way the QEO would be off the table as well, well forget about it then. You know, health care negotiations are where we can go to save money, and incidentally, it also would benefit teachers in the realm of giving them additional wiggle room on salary, but we can't do it because the board agreed, the district agreed, and the union agreed that we wouldn't talk about it.
Ruth: Well what they're agreeing is not that we won't talk about it, but that if we don't come to an agreement and we go to arbitration, which we've often agreed to do, that we won't let, again, an objective outsider make a decision based on the evidence about what's the best health insurance plan that the district can afford. Because remember, one of the things that an arbitrator does is look at the last offer of both sides. The arbitrator can't modify them, but he has to pick one or the other and then the arbitrator looks at things like the district's ability to pay. So my take, or my view on the arbitration is that if health insurance is not resolved between the parties, you want it to go, I want it to go to arbitration, because I think that there's a good case to be made that moving away from our current offering of WPS is not only a way of improving in some ways the coverage for our employees, but it's a way of saving future costs. This year we are spending 43.3 million dollars in the Madison school district on employee health insurance. Most of that is the teacher's coverage.
Vicki: That's about 17 percent.
Ruth: That's 17 percent of the offering.
Vicki: That's huge.
Ruth: Well, it's close to one out of every five dollars.
Vicki: This time around, when it comes to the upcoming budget, our administrators, we agreed to look at health care for administrators, and custodians, so clearly this is something that is kind of a no brainer when you're trying to look for some cost savings but we can't do it right now unless MTI agrees to it.
Ruth: Well we've looked at it; we've negotiated it with our custodians who are ASMI units, and we've worked it out with our administrators. Those are changes already in place. Correct, if the board agrees that given an impasse health insurance will never be on the table, then what it means is the union retains the veto basically on that change.
Vicki: Well the concern, of course, is because you used the phrase "objective third party"; somebody who came in, an objective outsider who could evaluate some other offerings, some other suggestions for the way we could cover our employees. The concern is, and it's a valid concern, that the president of MTI, John Mathews, also sits on the board of WPS. Now, as far as I'm concerned, that's getting close to a conflict of interest if it isn't already there. So how can we be assured that, if in fact MTI does agree to actually sit down and talk about health insurance, that we're going to get that objective outsider's opinion on what's the best deal for the district?
Ruth: Well, I think the problem, Vicki, is we can't be sure in collective bargaining.
Vicki: Teacher's can't be sure either, by the way.
Ruth: In a collective bargaining setting, we're not allowed to communicate directly to the representative employees about health insurance. We must, by law, communicate to the district about proposed changes in health insurance. I think the question from the teachers' point of view is whether they continue to want somebody to control the information flow to them who is also paid to be on the board of one of the providers, in this case, the most sensitive provider.
Vicki: The provider.
Ruth: Well no, more than half of our teachers are on Group Health. They are not all on WPS. They are seeing, particularly, I think the interesting point is the retirees. When our teachers retire, if they have unused sick time they can convert that into cash. And they can buy health insurance for after retirement. Teachers who are on WPS then move to Group Health. Because if you use those same dollars you can get five years with Group Health or three years with WPS. It's that kind of difference.

Younger teachers, you know, new teachers who are trying to pay their mortgages, who are trying to pay their school debts and so forth opt for Group Health in much larger percentages. Because they get coverage and they don't pay a small deductible, or as big a deductible as the other employees.

Our employees do pay some for WPS. But it's like 50 dollars a month on a policy that costs us you know 12 to 17 thousand a year.
Vicki McKenna: Per employee?
Ruth: Yes. Well for family coverage for an employee.
Vicki: Did you guys have a chance to calculate the savings when you looked at what the custodians were...how they were covered? How the administrators were covered? Do we have any kind of calculation as to... did we see savings when we decided?
Ruth: We did see savings. Yes. They're not huge. These are much smaller numbers of employees. And I don't remember them clearly enough to give you on the spot here but...
Vicki: So...
Ruth: Yes there are savings on the administrators.
Vicki: So Prairie had some success as well.
Ruth: Well Dayton County has done the same thing in collective bargaining with its AFME Unit. They have, in several rounds of negotiations, talked to them about health insurance changes in order to preserve jobs and in order to enhance wages.

None of us wants to take away health insurance from the teachers, or to give them inferior health insurance coverage. What this is about is really a shift; a shift to looking realistically at what is the HMO market. What is the quality health insurance coverage here in Dayton County today?

Today there is great competition but there is also great quality. 20 years ago an HMO might not cover you when you crossed the state line. But that's no longer true.
Vicki: Yes, we have a high quality of care here.

[talking over each other]
Ruth: Things have changed. Very high quality.
Vicki: But unless the board decides that it wants to fundamentally change the agreement on the in pass resolution agreement, or unless MTA or MTI decides that it wants to get serious about these negotiations, then we're kind of just peddling in place.
Ruth: Yes, if the board does what it did last time, if the board goes ahead and takes insurance off the arbitrator's list of considerations, then we've really undercut any momentum we have or any leverage we have in these negotiations.
Vicki: We're going to take another break here. Ruth will join me for another break. Stick around. This is Upfront.

Vicki: All right, we're back. Ruth Robarts is my guest and we're discussing Madison School Board. So what I've got here is the Voluntary Empass Resolution procedure. This is essentially ground rules; that's what the district and MTI have agreed to and that's what we're talking about actually. It was approved by the school board deciding that one of the things that will be off the table if an impasse happens is health care. Health care coverage.

Another thing though that I think is very interesting, and I think a thing a lot of people don't quite understand; in this as well it essentially takes the QEO off the table too. Which is not to say... you know you don't want to threaten the teacher's union with a QEO. But the way we approach the salary issue is that we start from the ceiling of the QEO. Which is 3.8 percent increase. Now correct me if I'm wrong, but why on earth do we have the ability to pay that and not negotiate health care?
Ruth: No.
Vicki: Do I as a taxpayer and everybody else here who continually, you hear it, complain; is this the best way to proceed?
Ruth: No. Our job is to represent the long term interest of the kids. When we concede that taxpayers are really strapped on the residential property taxes. And that state dollars are not... not only are they not flowing in our way in huge amounts, but Special Ed dollars and other kinds of dollars are much less than they used to be.

Then I think from the kids' point of view we have to spend every dollar as wisely as we can. We have to retain teachers. We have to recruit teachers. Which to me says we have to be arguing to put money on starting wages that currently goes to health insurance coverage's or that goes to the kind of increases that teachers get in their pension on their 20th year.

We have to be, as an employer, concerned that...20 years ago 80 percent of what the teachers took home was wages. This year 66 percent of what they take home is wages. So you know, if I'm coming, and I'm a new teacher... Again I've got my mortgage to pay. I've got my student debts to pay. How attractive is it for me that two thirds of my compensation is going to be wages and the rest of it is going to be health insurance and other perks? Or retirement, I don't mean perks. Retirements and fringes some of which are really expensive.

I mean our younger teachers are paying for the, what I think are excessive costs, for WPS. With their day to day wages and the amount of their retirement they will build up over their careers; your social security and your Wisconsin Teachers Retirement. Don't depend on your total package. Depend on what you've got in wages.
Vicki: Well, another thing that we have to consider is our ability as well to pay. Not only is it going to have to be attractive enough to recruit teachers into the mix, but are we going to be able to keep doing this when...
Ruth: No.
Vicki: When essentially Art Rainwater and the board frankly have said we're going to negotiate from practically a four percent increase. We're not dropping it anywhere below that. We're taking health care off the table as far as savings are concerned.

I'm not sure how we get savings at all. And I mean I would have to think that would frustrate teachers and taxpayers simultaneously.
Ruth: Oh no. I think you have to. And again you have to think about what gets the kids what they need five and ten years from now. Well it's nice to have a good strong support, and some of how you get that is you show people how you spend their money.

And you show people, for example with health insurance, that you understand that times have changed. And that competition among health care insurance providers can work for us right now; that we understand that 43.3 million dollars is too much of the school district's budget. You know, you can't continue to go up at those kinds of rates.
Vicki: And it's going to keep taking a greater percentage from our budget.
Ruth: Well, right. WPS goes up at about twice the rate as Group Health goes up. You know you cannot, you can no longer do that. That's what Sun Prairie really can no longer look for, either to the taxpayers or to outside aid to be able to absorb that kind of increase.
Vicki: Yes. We actually have to have some school board members who have the guts to stand up and say that no longer are these ground rules going to be in effect. You guys are going to change this. We're going to put this back on the table and not come up with BS, useless, warm fuzzy task forces that do nothing. Because that's what we did.
Ruth: I hope that you'll ask incumbent candidates and so forth where they stand on that kind of issue. I think it's an important one.
Vicki: Ruth, we are actually out of time. Thank you very much.
Ruth: Thank you.
Vicki: Always great to have you on the program. We're going to miss you on the board.