Feds Defer “Cadillac” Health Plan Penalty to 2020

BRIEF RECAP:

 

Negotiations between the BR-BOE (Bridgewater-Raritan Board of Education) and the BREA (Bridgewater-Raritan Education Association) are at an impasse, pending a mediation session scheduled to take place this Wednesday, January 13. 

 

Late last year, the school board posted on its web site the terms and conditions of what was then its most current wage and benefits offer.  This information is no longer on the BR-BOE’s home page.

However, on November 11, 2015, I posted a summary of both the BR-BOE and the BREA’s negotiation positions at that time based upon the data then released by the school board:  You can review it on this previous blog post.  

As pointed out in November, the biggest sticking point between the two parties was the near-confiscatory, so-called “Cadillac” health care plan penalty, and the impact it might present as a budget-buster.

We Support . . . .

The Harmon V. Wade Administration Building, Martinsville, NJ

. . . . our teachers and staff:  That’s what the lawn signs bearing words in white letters against a blue background, sprinkled here and there in Bridgewater proclaim. 

Proportionately, there doesn’t seem to be nearly as many in Raritan, and the number of posters along Bridgewater’s roadways has diminished significantly from the time when they first appeared many months ago.

But the remaining ones still capture my attention.  Over time, they seem to have morphed into an annoying message, but not for the reasons you may be thinking. 

Contract Negotiations Enter into a Summer of Discontent

Tuesday night’s meeting of the Bridgewater-Raritan Board of Education (BR-BOE) was brief. It was not punctuated – as were so many of the others – by large, but orderly protests outside the Wade Administration Building in Martinsville, or by overflow outpourings of union membership inside the conference room. 

Bridgewater resident Mr. Benjamin Jones
addresses the BR-BOE. (Bergeron Image.)

But low union turnout is no indication of undiminished interest in the still hot issue of the simmering, unsettled contract negotiations for Bridgewater-Raritan teachers.

During the public comment segment of the BR-BOE meeting, longtime Bridgewater resident Benjamin Jones stepped up to the microphone to remind the board that the contract issue will not be forgotten during the summer. 

He stressed that “If you don’t have good morale [among the teaching staff] you are missing the boat . . . I’m asking you to please do what you can to settle the contract . . . It just doesn’t make sense when [we hear] from a governor who is demonizing teachers and [who] considers them evil.” 

Jones further indicated that “There is no reason it should have gone this long . . . there’s got to be some middle ground.”

*****

At the conclusion of the BR-BOE meeting, Mr. Steve Beatty, President of the Bridgewater-Raritan Education Association (BREA), described an overview of how the current process may roll out:

Police & Township Employees Set the Example for 2010

If you haven’t already read it, check out Kara Richardson’s report in Tuesday’s Courier News about the agreement reached with the Bridgewater Police. They’ve accepted a four-year agreement which specifies a wage freeze in 2010. Other township employees have already agreed to that concession.

This is in stark contrast with the three unions representing teachers and support staff, principals and supervisors of the Bridgewater-Raritan School District. About midway in the budget process, a written request to re-open contract negotiations was made by Board President Jeffrey Brookner and was turned down..

After the school budget was rejected by voters, Matthew Moench, Bridgewater Township Council President was rebuffed by the unions when he publicly expressed a strong preference for the three school bargaining units to accept a one-year wage freeze.

In contrast to the Bridgewater Police Department’s wage freeze, the BREA will enjoy a contracted pay raise of 4.35% for the new school year beginning July 1, 2010. The principals and supervisors will get similar increases.

As I have consistently discussed in this blog previously, school employees continue to enjoy pay increases significantly above the inflation rate. On May 20th, the Wall Street Journal reported that the U.S. inflation is at a “44-year low,” hovering under 1%.

And this doesn’t even begin to take into account the perilous financial condition of The State of New Jersey and its resulting inability to support excessive wage packages through increased school aid, thereby leaving the hapless local homeowner to pick up the tab.

Photo Note:  Entrance to the Bridgewater Police Department — click once on photo for a better view (by Dick Bergeron)

Same Topic, Last Minute Thoughts

Tuesday, April 20th,  is D-Day – decision day – for the 2010-2011 Bridgewater-Raritan School Budget. Unlike most years, it’s been one of the most widely publicized budget processes in decades.

What characterizes this one from previous budgets is that it is embroiled in a statewide financial crisis, with few school districts being spared the agony of cutbacks due to reduced state aid. The numbers which have been thrown about are dizzying.

Go back a few months: What do you think would have happened, if Jon Corzine had been re-elected, instead of Chris Christie? It’s not unrealistic to assume that the B-R School District would have received most or all of its anticipated state aid. There would have been no program or personnel cutbacks, perhaps not even any outsourcing of custodians.

The Bridgewater-Raritan Education Association would not have been asked to implement a wage freeze. Negotiations for another generous multi-year contract would have begun. And everyone would be happy.

Now let’s step out of that dream.

That’s the kind of thinking that leads to addiction, in this case, financial addiction. Let’s face it, Bridgewater and Raritan brothers and sisters, we’ve been living high off the hog in this district for too long. Ours is the state with the highest cost of education and the highest taxes. It is full of cronyism, patronage and corruption.

Seniors are strapped, having lost about $1200 from the cancelled homestead rebate. They have seen their incomes plummet as the result of virtually 0% interest rates and watched their 401k’s tank. Working people of all ages and income strata in the commercial sector are being laid off from well-paying jobs.

People fortunate enough to have solid employment are looking at little or no increases in their salaries and are getting socked with ever-increasing health care premiums. Tens of thousands have lost their defined-benefit retirement plans, a benefit still enjoyed in the public sector.

The nominal unemployment rate is pushing 10%, while the actual unemployment due to discouraged laid-off workers no longer seeking employment sits at a staggering 17%.

Does anyone seriously think that the spending trend in our school districts could have been kept on its current trajectory? What astonishes me is not that the Christie medicine is being forced upon reluctant patients. What does is that not enough could see the symptoms of the disease.

Excess is excess, no matter what field it’s in. The overly-generous spending in New Jersey on most levels, including within the Bridgewater-Raritan School District reminds me of the dot.com and real estate bubbles of the last two decades. We all wanted a good time and didn’t worry until the bubbles popped in our faces.

I’ll conclude with one of the most egregiously false and age-old arguments for why school budgets are where they are – personnel salaries which comprise about 80% of the total. We have been told over and over again that these are fixed costs, implying that nothing can be done to slow their growth.

But that argument is suicidally circular, because the same school board which tells us that salaries are fixed costs and can’t be slowed because they are part of multi-year contractual agreements, are the very same school boards that negotiated those inflated agreements to begin with.

By the way, that much ballyhooed 12.8% three-year wage agreement with the Bridgewater-Raritan Education Association is in fact a three-year 13.35% wage hike. This result occurs through the magical compounding of each annual wage increase in the package over its contract period.

The school funding and spending problem in New Jersey and in our community is serious, real and now in our faces. The sooner we fix it, the better off we will all be. Jon Corzine and his predecessors are gone and they are never coming back.

It's been a long one.  Thanks for reading.

A Refresher on the Bridgewater-Raritan Schools Wage Package

I still remember the evening of December 18, 2007, when I sat down in the conference room of the Wade Administration in Martinsville to hear the Bridgewater-Raritan School Board approve a three-year 12.8% wage hike for the Bridgewater-Raritan Education Association. I don’t recall board members discussing that proposal. It was put on the table and voted upon. Done!

Members of the BREA have received the first two increments of that raise, 4.2% for the 2008/2009 school year, and 4.25% for the 2009/2010 school year. The final increment of that package, 4.35%, is due to take effect July 1st.

Since the BREA is the biggest bargaining unit, the results of its negotiations feather out in talks with the principals and supervisors associations who won’t settle for much less. Similarly, this influences the increases built into the superintendent’s package and others on the payroll. Control wage increases for the BREA, and you control everything else.

One of the reasons that the BREA rejected the board’s request to freeze the 4.35% wage hike now built into the April 20th budget is that it would weaken the BREA's position in the next round of contract negotiations. That point was made in what was probably a slip-of-the tongue, barely audible acknowledgment at one of the recent public meetings.

In yesterday’s post, I explained the concessions that already have been made by the BREA, while stressing that the 4.35% is still the biggest purse left on the table and included in this year’s budget. But it doesn’t have to be that way.

In an op-ed piece today in The Sunday Star-Ledger, Governor Christie writes that “There is still time to reopen negotiations and have the teachers union finally agree to reasonable, shared sacrifice – a one-year freeze on salaries and a small contribution to health insurance costs.”

The Bridgewater-Raritan Education Association has already agreed to a health care insurance contribution. Now it’s time for it to do some heavy lifting, return to the school board, and cancel its 4.35% wage hike for the 2010/2011 school year. The result would feather out to other bargaining units.

But that’s not in the cards; that is, not unless you, the voters of Bridgewater and Raritan robustly remind the BREA of that omission on Tuesday, April 20th, when you draw the curtain behind you in the voting booth.

Times, They are a'Changing

There is a major debate ranging all the way from the statehouse in Trenton, into every nook and cranny in New Jersey’s communities about the multi-billion dollar state budget deficit and its impact on the flow of dollars to municipalities and school districts.

Anyone with even the slightest pulse and a smidge of interest in politics knows that at the center of that debate is what to do about it now that the well is dry.

There was a time when the well contained plenty of water, but we lavishly wasted that resource. The water table under that near-empty well can no longer sustain the endless pumping for more.

Substitute the word ‘Trenton’ for ‘well,”’ and ‘tax revenues’ for ‘water table,’ and the analogy comes into better focus.

Denial, a natural first reaction I suppose, seems to be the order of the day. Not everyone wants to recognize that a permanent paradigm shift has taken place and that the old ways of doing business are permanently behind us.

This is evident in the current standoff between Governor Chris Christie and perhaps the most powerful union in the state, the New Jersey Education Association. At the heart of the tug-of-war between these two powerful forces is the governor’s vigorous attempt to coax the NJEA into recognizing that this new financial paradigm is genuine.

The Bridgewater-Raritan School District is in the middle of that struggle. It was only after overwhelming pressure at one public meeting after another that the superintendent and non-bargaining personnel concurred to a wage freeze, and that the Bridgewater-Raritan Education Association agreed to $1.4 million in concessions in return for a like amount of reduced budget cuts.

For what may be the first time, voices of Bridgewater/Raritan parents and others at open public meetings were the prime causal factor in forcing 11th hour negotiations between the BREA and the B-R BOE which ultimately brought about that $1.4M exchange.

Despite everything you may have read and heard there is still a significant amount of money left on the table. The district’s three major bargaining units rejected an earlier call by the Bridgewater-Raritan Board of Education for a wage freeze in the coming year.

That means the 4.35% wage hike for the BREA (and similar increases for principals and supervisors) is still in the school budget.

There remains plenty of work left to do.

B-R BOE Accepts BREA Offer

In a sparsely attended meeting that lasted only about ten minutes this afternoon, a five-person quorum of the Bridgewater-Raritan Board of Education voted unanimously on proposals to accept the offer of the Bridgewater-Raritan Employee Association (BREA).

The Board also voted to approve the budget for the 2010/2011 fiscal school year beginning July 1st. It now will be submitted to Trudy Doyle, the Somerset County Executive Superintendent for her sign-off and inclusion on the April 20th ballot where voters will have the final say.

In its revised contract agreement, the union membership, according to a statement released by Superintendent Michael Schilder, “agreed to contribute 1.5% of their salaries towards the cost of health care.” BREA members also gave up $403,000 of tuition reimbursements.

Union membership voted by an overwhelming margin of 2 to 1 in favor of these concessions.

The total cost of these give-backs is $1.4 million, but the amount is a wash in the expense budget and on the school tax rate because, in return, the Board agreed to restore teaching positions, as well as other programs slated for elimination in prior budget drafts.

The tax levy for the Bridgewater-Raritan School district will rise by 4.95% from last year. However, the Bridgewater Township school tax levy will go up by 5.42%, while the Raritan Borough school tax levy will go up by 3.90%.

This anomaly in school tax levies between the two municipalities is, according to Peter Starrs, School Business Administrator/Board Secretary, caused by three factors: One of them is a New Jersey proration formula, and the other two are the valuations and ratables for each municipality.

Sounds complicated and it is, but the percentages can swing from year to year with Raritan, in some years, getting a higher percent share.

Bonjour, Bridgewater & Raritan

This is the day that we will find out how the teachers, secretaries and custodians voted on the proposal that the leadership of the Bridgewater-Raritan Education Association placed before them on Monday.

The count is over: All the ballots are in, and the membership will get the results late this morning. Once the Bridgewater-Raritan Board of Education gets notified, the rest of us will find out how it turned out.

Don’t expect any huge surprise. The membership of the BREA is not totally insensitive to the mood of Bridgewater and Raritan these days. Nonetheless, people can only vote for what’s on the ballot in front of them, so don’t expect a wage freeze or partial salary give-back.

Should the membership have voted affirmatively, and I believe it has, what you will see is a $1.4 million give-back of fringe benefits including tuition reimbursements and contributions to health care costs. If the vote has been in the negative – unlikely – then may God help us all.

The Bridgewater-Raritan Board of Education will meet today at 2:00 PM in the Wade Administration Building in Martinsville to reflect the BREA’s offer and to pass the final budget for the 2010/2011 school year.

Voilà!