Wisconsin Teachers Mafia - Follow the Money

When you want to know what a fight is all about - it is often helpful to follow the money. So where is the money in Wisconsin's fight with the Teachers Union?

We recently issued a report titled, ” A Crucial Challenge for Wisconsin Schools: Escaping the Shackles of WEA Trust Insurance.” After hours of investigation and research, we were able to demonstrate that WEA Trust is the most expensive form of school employee insurance in the state, and schools could save hundreds of thousands, and sometimes millions of dollars, by switching to different insurance carriers.

We also pointed out that WEA Trust has a grossly unfair advantage in the Wisconsin school insurance market, allowing the company to charge inflated prices without losing a great deal of business. The problem is that state law makes the identify of the school insurance carrier a topic of collective bargaining. That allows local teachers unions to come to the table demanding WEA Trust coverage, because their state union, the Wisconsin Education Association Council (WEAC), created and is closely associated with WEA Trust.

We polled administrators from 20 school districts that managed to break away from WEA Trust coverage in recent years. All of them saved, or expected to save, at least $100,000 per year while still offering quality health coverage to employees. McIlheran wrote about one of those districts, Milton, which expects to save $1 million per year.

Well what do you know? It is not about teachers pay at all. It is about union profits.

The Chicago Boyz have more details.

Would someone please note that Unions make the great lion’s share of their $ from negotiating “benefits”, not salaries… or collection of dues.

This is why the decoupling of the Salaries and Benefits is so important to Unions in Wisconsin. And why the Union’s have countered the way they have. They’ll give up Salary and Jobs for Teachers in a second, but they will fight to death for the Benefit negotiation position. In another life as an executive in CA, I used to do administration for two Teamster’s “Health and Welfare” benefit packages. Do your research, but you’ll find I’m correct about motivation of Unions. I also believe that the amount of money kept by Unions will be very interesting to both your viewers, and the tax payers of the US of A. The way it works is that the Unions negotiate with the “Employer” regarding how much money per member/per month they will need to support the benefit options required in Union contract. In the case of WI, they negotiate with each of the 77 counties. Then the Unions negotiate the terms of benefits with “providers”/Ins Co’s, etc. They make the lion’s share of their money off of what is called the “breakage” created by Employees choosing between plan options, and the administration of the programs.

A commenter at the Boyz puts it in clear dollars and cents terms.

Mike Says:

February 20th, 2011 at 9:50 pm

Average annual cost of family coverage for the teachers in the school district our business is located in $22,000 with no employee contribution required. Average annual cost of family coverage in our business $12,000 with employee contribution of 12%. We just received our May 1st renewal up 16%.

My advise to WI teachers. With all due respect, go back to work, carefully consider the “value” of your union and consider firing them. And lastly, stop whining and make the best of a not so good situation like the rest of us are. Maybe its just me.

So in this one case each union member is worth $10,000 a year to the union. Over and above union dues and any other money the union gets from the teachers. Talk about your sweetheart deals.

Here is some more information on what honest deals might do to the union.

[Waukesha, Wisc…] Wisconsin school districts are saving millions of dollars by switching health insurance providers away from WEA Trust, but the teachers union is not making it easy.

WEA Trust is affiliated with the Wisconsin Education Association Council (WEAC) [the State affiliate of the NEA - ed.], the union representing some 98,000 employees within Wisconsin schools. The MacIver News Service has learned some districts across the state have discovered they can provide equal coverage at a lower cost through soliciting bids from other companies in the health insurance marketplace.

For example, this year Campbellsport School District switched to the Wisconsin Counties Association’s plan and will save $100,000. The Slinger School District switched to United Healthcare and saved $200,000. Waukesha switched from WEA Trust as well and indicates it will save $2 million.

“United has a larger pool and can provide the same coverage at a much lower price,” said Todd Gray, Waukesha Superintendent.

This trend has caught the attention of the WEAC, and their locals are fighting to stop it. In Campbellsport, the Master Agreement between the union and the district allows the school board to switch insurance providers as long as the coverage is identical. The union there claims the district violated that agreement and filed a grievance and a prohibited practice complaint against the district.

“Since becoming effective July 1, 2010, the change in health insurance carriers has been almost seamless, without any loss in the level of benefits,” Dan Olson, Campbellsport Superintendent, said.

The school board decided to take up the grievance at an August meeting, and publicly posted the item on August 3 to comply with open meetings law. At that meeting, the board decided to take up the grievance in open session.

“In these tough economic times the residents of the Campbellsport School District deserve to know how their tax dollars are being spent, including the efforts the District is taking to save approximately $100,000.00 in costs,” said Jay Miller, Board of Education President.

There are more details on how the union fought a change in insurance plans at the link. Hmmmmmm. I think I smell MONEY.

Ed Morrissey at Hot Air goes even deeper into the money. Good material. But I think you get the general idea. The Union is skimming from the members Health Care Plan. They seem to do that sort of thing on pension plans when they control them. This is starting to look like a pattern of practices and behavior.

This book might be a good guide to those patterns and practices:

Mobsters, Unions, and Feds: The Mafia and the American Labor Movement

Charles Krauthammer says Wisconsin represents the shot heard 'round the world in America's efforts to right the ship.

Wisconsin is the epicenter. It began with economic issues. When Gov. Scott Walker proposed that state workers contribute more to their pension and health-care benefits, he started a revolution. Teachers called in sick. Schools closed. Demonstrators massed at the capitol. Democratic senators fled the state to paralyze the Legislature.

Unfortunately for them, that telegenic faux-Cairo scene drew national attention to the dispute - and to the sweetheart deals the public-sector unions had negotiated for themselves for years. They were contributing a fifth of a penny on a dollar of wages to their pensions and one-fourth what private-sector workers pay for health insurance.

The unions quickly understood that the more than 85 percent of Wisconsin not part of this privileged special-interest group would not take kindly to "public servants" resisting adjustments that still leave them paying less for benefits than private-sector workers. They immediately capitulated and claimed they were only protesting the other part of the bill, the part about collective-bargaining rights.

Indeed. Walker understands that a one-time giveback means little. The state's financial straits - a $3.6 billion budget shortfall over the next two years - did not come out of nowhere. They came largely from a half-century-long power imbalance between the unions and the politicians with whom they collectively bargain.

Wretchard at the Belmont Club (who quotes an article I recently wrote) thinks if America can right the ship it will be an example for the rest of the world.

...what’s important to remember is that the United States is the fulcrum of fate. Unlike other world crises, in which there were rival centers of hard power, the suddenness of this storm happens while the US remains, and will remain for the short run, the center of hard power.

Not that it will be used, and therein lies the key redeeming feature of the struggle. The world does not have the capacity to break out into global war because, with the exception of Russia, their nuclear arsenals are “too small” and they cannot cross the seas to attack each other because they have no power projection capacities and cannot challenge the USN.

That means that if America regains rationality, it can hold the ring and the world crisis will not spill over into international chaos. This can be a global velvet revolution instead of a bloody one. If America regains rationality

And that is the key. Rationality. Which is why I'm a TEA Partier.

1. Fiscal Responsibility
2. Constitutional Government
3. Free Markets


Click on the above image and learn how to spread it around.

H/T Linearthinker for the Wretchard link.

Cross Posted at Classical Values