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Slammed with year after year of budget cuts, the San Diego Unified school board recently asked to reopen talks with its labor unions. New school board member Scott Barnett hinted that there was one place where the school district could squeeze more savings: Health and welfare benefits.
Barnett noted that the school district completely covers health care for him and his kids. “As a parent and someone who has to pay bills, I’m thrilled,” Barnett said at a recent meeting. But he added that those great benefits cost the school district $165 million this school year.
His remarks hit a chord that has been played over and over as San Diego Unified faces massive shortfalls that are jeopardizing nurses, gutting the arts and bloating class sizes. One camp of parents has repeatedly questioned whether school employees could give more to lessen those cuts.
It isn’t surprising that they would look to benefits. San Diego Unified is generous with health care compared to school districts across the county, chipping in more than $11,000 in benefits for each employee. Workers pay no premiums. Several administrators dubbed them “Cadillac benefits.”
But if San Diego teachers and principals have enjoyed Cadillac benefits, their salaries look more like a Honda compared to nearby school districts. San Diego Unified has historically offered its workers a tradeoff: Put up with lower paychecks and we’ll put up the costs to keep you and your family healthy.
The result is that San Diego Unified actually falls somewhere in the middle, with great benefits and not-so-great salaries. That tradeoff is one big reason that talk of trimming back health benefits is unlikely to fly with school employees, even as the school district faces an estimated $120 million deficit. Slashing benefits or making employees pay more would upset the balance it has set with its workers.
“People have given up so much for so long for those benefits,” said Craig Leedham, executive director of the teachers union. “That’s how people would look at it.”
San Diego Unified workers pay no premiums on healthcare for themselves or their families, a much better deal than the average California worker, who pays more than $3,600 for a family. The district’s benefits costs are projected to grow nearly 10 percent year by year.
But labor unions who have historically foregone better salaries for better benefits are loath to trade out those benefits without something in return — something that strapped San Diego Unified probably can’t offer right now. School employees have already agreed to furloughs that reduce their pay by 2.7 percent for this and next school year and upped co-pays — what employees pay when they visit the doctor — from $5 to $10 on one health plan.
“I know other people look at the benefits and say, ‘Hey, that’s a good deal,’” said Mary Laiuppa, who has two master’s degrees and teaches music at Cherokee Point Elementary. “But look at what I’d earn in the private sector. My salary sucks. So I should have nice benefits.”
Beginning teachers in San Diego have similar salaries compared to the average new teacher in the county. But the longer they spend in San Diego Unified, the more money they could be making somewhere else. Most other local school systems pay their experienced teachers more than San Diego Unified, according to an analysis by School Services of California, a company that advises school districts.
Retired school administrator Robert Raines, who sits on a school district benefits committee, said one reason the San Diego Unified tradeoff evolved was that boosting benefits was easier to sell politically than increasing salaries. The costs are less obvious to the public.
Giving better benefits is also more equitable for all employees, other labor leaders said. San Diego Unified offers the same benefits to all of its workers, something it started doing decades ago.
That evenhandedness has also made it trickier to reduce benefits. Last year, school board member Shelia Jackson said she didn’t want to increase co-pays much because all employees would have to pay the same hike — $10 means more to a cafeteria worker than an area superintendent.
“One way or another it’s money out of the pockets of people who are just being able to make ends meet,” said school board President Richard Barrera.
San Diego Unified also lets employees choose any plan and not pay anything in premiums, even if the plan costs the school district more. That is a big perk over many other school districts in the county, which tend to offer some plans for free and others at a price.
While it is unlikely that unions will agree to put health benefits back on the bargaining table, San Diego Unified has already sought to save money on benefits in different, less painful ways.
Last year, labor unions agreed to seek savings by auditing who was eligible, stopping dual coverage to spouses who both work in the school district and charging a fee to people who could be covered by another company but choose not to be. Those changes were originally projected to save $6.1 million. Benefits manager Ronnie Adair said it is now unclear whether they’ll end up saving that much.
More recently, a committee of San Diego Unified staff, parents and others that is trying to find savings in the school district recommended reexamining how it buys benefits. San Diego Unified is now part of a nonprofit health trust, run jointly by labor and management from dozens of school districts that take part. It pools their resources to get savings.
Last month, the committee recommended that San Diego Unified see whether the health trust could renegotiate its administrative fees or change administrators to help it save money. It also questioned whether San Diego Unified would save money by buying its benefits elsewhere, something that would need to be negotiated with the labor unions.
That is bound to be deeply controversial with employees. “I don’t fault them for looking. You look where the money is,” said Bruce McGirr, director of the union that represents principals and other administrators. “But it would be naïve to assume you can just go in and renegotiate.”