The Public Policy

Bailing Out Teachers

That's what today's Bill with No Name intends to do, in a big political payback to the teachers unions.

By 8.10.10

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Democrats on Capitol Hill are literally taking food out of the mouths of the most needy to pay back their political cronies. Today, the House will vote on the infamous Bill with No Name, H.R. 1586 (originally the FAA Air Transportation Modernization and Safety Improvement Act), which contains a $26.1 billion bailout for financially strapped state governments. Much of the money will go to public employee unions, in the form of a $10 billion "Education Jobs Fund" to supplement state education costs. This comes on top of a $53.5 billion bailout of unionized teachers in the State Fiscal Stabilization Fund -- some of which is still unspent. Worse, the new legislation would impose $9.7 billion in permanent tax increases.

The failing economy is not the only reason school districts are seeing shortfalls. The Wall Street Journal reports that school district spending has been out of control for at least a decade and is far out of sync with enrollment growth. As the Journal notes, "total education spending grew by 32% percent between 1999 and 2009, while K-12 enrollment has grown by less that 1% each year over the same time period."

In some cases, unions have prevented state and local governments from making needed cuts in their budgets. For example, earlier this year the Milwaukee School Board announced that it was laying off 428 teachers due to budget shortfalls. The average Milwaukee teacher receives only $56,000 per year in salary, but also gets a generous $40,000 in benefits, including a health care plan that costs $26,000 per family, compared to $14,500 for private employees. The school board sought to cut costs and to keep the teachers by implementing cuts in benefits. A proposed health care plan would have instituted co-pays expected to yield $47.2 million in savings, more than enough to save every teacher's job. The union refused to bargain, instead opting for layoffs.

Milwaukee school system superintendent William Andrekopoulos said he was "surprised" at the union's reluctance to negotiate to prevent the layoffs, but H.R. 1586 provides a possible explanation for the union's behavior. The Milwaukee Teachers Education Association (MTEA) may have been gambling on the prospect that congressional Democrats would bail them out. The union's executive director, Pat Omar, said, "The problem must be addressed with a national solution, a federal stimulus package that will restore educator positions."

And what kind of benefits is the union seeking to protect? Coverage for Viagra, for starters. The MTEA has asked a judge to order the school board to reinstate erectile dysfunction drug, which was removed in 2005 to save money in its health insurance plan. Adding the drug would cost taxpayers an additional $786,000 per year, or the cost of 12 first year teachers.

"You've got to be kidding me," said State Rep. Jason Fields, a Milwaukee Democrat. "The fact that is the point of contention is kind of frightening. What are our priorities? I'm all for love and peace. But almost 1 million dollars? And you go to court over this issue?"

For public employee unions, this is payback for their extensive support of Democratic politicians. The Center for Responsive Politics lists the American Federation of State, County & Municipal Employees as second on its Top All-Time Donors list. The National Education Association (NEA) is eighth and the American Federation of Teachers (AFT) comes in at 13th.

Combined the NEA and AFT have spent over $58 million on politics since 1989, with over 90 percent of that money going to Democrats. No wonder an August 6 Washington Post editorial stated flatly, "The crusade for an education jobs bill, led by the Obama administration and Democratic leaders in Congress, has always struck us as more of an election-year favor for teachers unions than an optimal use of public resources."

Worse, the Bill is more than just blatant payback; it is also punishment. Every state will be eligible for a bailout except one, Texas, the only state deemed ineligible to receive funds under H.R. 1586's population-based formula.

The carve-out, which could cost Texas $800 million, is part of a spending tug of war between Washington and Austin. Texas can still receive funds but must capitulate to higher education spending levels though 2013 -- which Governor Rick Perry opposes as unconstitutional.

Texas used $3.2 billion of last year's federal stimulus to shore up the state's rainy day fund, angering many who wanted to increase state spending. The push by congressional Democrats -- including some from Texas -- can be seen as a larger effort by the federal government to mandate and increase state spending.

If the Bill with No Name teaches us anything, it's that in today's political climate being fiscally responsible will only bring punishment. So, if states want Washington to play nice with them, they need to follow its example and spend, spend, spend!

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About the Author
F. Vincent Vernuccio is Labor Policy Counsel at the Competitive Enterprise Institute and Director of Labor Policy for the Mackinac Center.