Unfortunately for classified employees, there is very little disagreement over how much the state will provide school districts for classified employee insurance benefits. Sadly, both the House and Senate provide no increase for insurance funding while Governor Inslee gets credit for the high water mark by coming up with an 8.8% increase (enough to cover one year of premium inflation). Unless the House and Senate come to an agreement to increase this funding, classified employees will only have received a 1.6% increase over the 10 year period from 2010 – 2019. Sad…
I have testified that unless the State fully funds premium inflation soon, the only classified employees who will be able to afford insurance are our supervisors.
With only a small difference, all three budget proposals fully fund the higher education insurance agreement. That agreement maintains the 85/15 split of the cost of PEBB insurance premiums. Employers (either state or higher education institution) funds 85% of the cost of insurance premiums, employees pay 15% of the cost of insurance premiums. I have to point out that employees pay 15% of the premium costs regardless whether they sign up for employee only coverage or full family coverage. This is an example of a fair and balanced approach that PSE and many legislators are interested in applying to K 12 insurance premiums.
It’s only a couple minutes old but as with any Budget there are positives and negatives. Unfortunately, there appear to be more negatives than positives.
Regarding state employee and higher education contracts, nearly all, except Teamsters correction contract and Washington State Patrol, were not funded. Instead higher education employees will be provided a $500 per year salary increase effective July 1, 2017, and July 1, 2018. On the other hand, the union coalition bargaining agreement on health insurance was fully funded.
On the bleaker K 12 side, the Senate budget repeals the Initiative 732 salary increase instead providing a 2.3% salary increase effective September 1, 2017. Further, insurance funding would not change staying at $780 per month for the 2017-18 school year.
What’s important to realize is that there isn’t funding for a salary or insurance increase the second year of the budget since this is the year when the Senate republican McCleary solution, SB 5607, takes effect (see my previous entry about the bill). Sorry to get complicated but starting September 1, 2018, school districts would receive increased state funding based upon the National IPD (implicit price deflator). The IPD usually runs about 1% below the Seattle CPI (consumer price index) – the current measure for our annual salary increases. The way their proposal works is that when this IPD increase goes into effect in September 2018, we will have to negotiate with the school district how much of this increased funding goes for salary or insurance benefit increases starting September 1, 2018.
One positive with their proposal (looking hard for a silver lining), really not this proposal, but their McCleary solution: the state will be funding the additional 5,000 classified employee FTEs that are currently funded by local levies.
And another good point is that the pension plan was fully funded with an additional $246 million set aside to pay for the unfunded liability.
As I spend more time on this proposal, I will update as needed.
Update #1 – Good news…The Senate fully funded PSE’s paraeducator bill, SB 5070 at a cost of $2.3 million!
Update #2 – Good news…they used $700 million from the “rainy day” fund to buy down the PERS 1 unfunded liability.
Earlier I reported on a small bill, HB 1042, that has an innocent objective. Stop collecting K 12 insurance data and save the state $250,000 per year. I testified earlier that it doesn’t make sense to stop collecting information while the problem still exists. Otherwise, how will you know what you need to do to fix the problem?
Nonetheless, the House approved the bill on strict party lines: 50 democrats voting for it, 47 republicans voting against it. I was pleased to hear the democratic speaker mention classified employees and the republican speaker tie the K 12 insurance problem to a potential McCleary solution.
Not a lot to see or hear in the debate but here it is:
PSE’s effort to provide affordable, quality health care insurance for all school employees has stalled for now. SB 5726 continues to get plenty of favorable attention but also receives some negative attention. One thing that gets in the way is the cost to provide K 12 employees “parity with state employees”. What this means is K 12 employees, including part-time classified employees, would receive the same funding as state employees.
K 12 employees currently receive $780 per month while state employees receive $888 per month. A second major cost is that part-time state employees who work half-time or more receive the same funding as full time employees while in K 12 they are prorated. For instance, a 4 hour part-time classified school employee receives $390 per month while a 4 hour state employee receives $888 per month.
It costs nearly $330 million per year to treat all K 12 employees the same as state employees. $82 million of that is to provide part-time classified school employees the same benefits part-time state employees receive.
Not surprisingly, that makes this issue more difficult to fix. However, one insignificant victory in this struggle is that OSPI’s first estimate of the cost of the bill was $700 million per year. Yea we were successful reducing the cost but that doesn’t make our opponents go away, unfortunately.
Yesterday, House republicans attempted to amend HB 1843 by adding classified employees to PEBB. 1843 is the House democrat’s McCleary solution (check out previous entries). There was an impassioned plea from Representatives Drew MacEwen, Dave Hayes, Dan Griffey, Ed Orcutt and Bob McCaslin to help out classified employees and PSE members. Really nice to hear their support for us.
Though the amendment failed on a party line vote of 47 republicans voting yes and 50 democrats voting no, it was good to hear the two democratic opposition speakers say this is a problem that needs to be fixed this session.
Here is the debate on the amendment:
Less than 30 minutes ago, the Senate Ways and Means committee approved SB 5726, PSE’s bill, sponsored by Senator Hobbs, to put all K 12 employees into the PEBB health care system. Senator Karen Keiser’s amendment to just put classified employees into PEBB failed when republicans united behind their leader, Senator John Braun, who said that it is time to reform K 12 health insurance for all employees, not just classified employees.
Yesterday was an exciting day for two bills that are strongly supported by PSE. Bills 5726 and 5727 were simultaneously heard yesterday in the Ways and Means committee. PSE was pleased to see that there were professional support employees, teachers, and administrators all testifying in support of both of these bills. Karen Carter, Mead para educator, explained that 30% of their family pay was going to monthly healthcare premiums for her family. Amy Lindsey, Pioneer school district teacher explained how she paid over $1200 a month in premiums to cover her family. Mark Trobough testified how costs for family insurance was making the teacher shortage worse. Kim Lackey, Puyallup school district office manager, explained how she used to provide insurance for her children but had to stop because of the high cost of monthly premiums.
I chose to testify on the other side of the insurance spectrum as someone who is fortunate enough to pay nothing for my medical insurance. I shared with the committee my experience working with other professional support employees who once upon a time had paychecks to take home because insurance was affordable but who now are taking home considerably less due to rising costs. I also shared my story about my daughter who is a teacher but has not married the father of her two children because it would cost them over $800 per month to add him to her insurance.
Testifying on the con side were WEA (the teacher’s union) and Premera Healthcare. Premera said they didn’t see a problem with the current system as they are able to deliver a cost effective product to school employees with only 4% in overhead costs. As many of us know…a 43% increase in premiums over the last 4 years does not seem cost effective? WEA testified that they don’t think the system is broken. They just want the allocation to be higher.
There was a great article in the Seattle Times on the 10th of February. They talked to both the bill sponsor, Senator Hobbs and our own Doug Nelson. Senator Hobbs said it well, “Although many school districts offer affordable insurance plans to individuals, the family plans are out of reach for many school employees.” It is a hot issue on the hill and there will be more to come.
Here’s the hearing…
Representative Michelle Caldier introduced today, two days before cutoff, her own solution to ensure school districts are offering affordable and quality health insurance for all employees in K 12 public schools. HB 2110 would address the dependent/family ratio by requiring that, “Local bargaining over basic benefits shall not alter the right of each employee of a district to pay substantially the same percentage share of the cost of health benefits as all other employees in the district, regardless of whether an employee chooses to cover dependents.”
I don’t expect her bill to get a hearing much less a vote in the House Education committee but it is nice to see her attempting to fix the problem.