Benefits inflate teacher costs in District 158

When the teachers union and Huntley Unit District 158 unveiled their contract proposals in April, the gap between the plans seemed large, but not insurmountable.

The district proposal offered salary increases of 4.25 percent for the district's 580 teachers.

The Huntley Education Association proposed salary increases averaging 10.6 percent.

More Coverage Links Union contract may raise other costs

Salaries, however, don't tell the full story - not by half.

A Daily Herald analysis of the two proposals shows differing pension and health care plans combine with salary differences to drive the district and the union dramatically apart.

When salary and benefits are all added, the district's proposal totals at least $31.48 million, a 4-percent increase over the $30.23 million cost of the current contract.

The union's proposed contract totals at least $37.25 million, a 23-percent increase.

The union's plan calls for the district to pay all pension contributions - an increase of nearly 1,000 percent over this year. This increase alone accounts for about half the $5.77 million difference between the two proposals.

Under the union's plan, the district would spend at least $7 million more next year on teacher costs than it did this year.

The district says its expected increase in operating revenues next year will be only $4.3 million, prompting the district's claim in a recent news release that the union's plan would "bankrupt the district within two years."

The union has not responded to that claim.

Retirement

Differing retirement benefits account for most of the large disparity between the two proposals.

In Illinois, the Teachers' Retirement System requires school districts to contribute an amount equal to 1.21 percent of teachers' salaries toward teachers' retirement funds. Teachers have to contribute 10.24 percent of their salaries.

The district has been paying the 1.21 percent to the pension system, and under its proposal would continue to do so.

The union now wants the district to pay both the required employer contribution and the amount teachers have had to pay, which amounts to a total of 11.45 percent of teachers' salaries annually.

That would be a cost in addition to salaries.

The district's proposal forecasts a pension contribution cost of $341,000 in the first year of the contract, an increase of $14,000, or 4 percent, over this year.

The union's plan would cost about $3.45 million in pension contributions, an increase of $3.12 million - or 954 percent over this year.

Health care

Health insurance is the other major nonsalary item creating the gulf between the two proposals.

The district now pays $2.85 million toward teachers' health insurance.

Under the district's plan, health insurance for teachers would cost at least an additional $85,000, or 3 percent more, next year.

Under the union's proposal, teachers' health insurance would cost at least an extra $852,000, or 30 percent more.

The bulk of the increase would come from increases in the district's monthly contributions toward teachers' health insurance.

While the district would increase contributions by 3 percent next year, the union wants the district to pay 100 percent of employee-only coverage, 90 percent of family insurance and 90 percent of coverage for an employee and one dependent.

The district already pays 100 percent of employee-only coverage but only about 53 percent of family coverage and 62 to 83 percent of coverage for an employee and one dependent, according to the district.

The higher contribution rates account for $500,000 of the union's proposed increase.

A $3,600 stipend in the union's proposal for teachers who opt out of district insurance accounts for the rest of the increase.

The stipend would add at least $374,000 to the contract cost.

And that's assuming that the same number of employees would opt out of the district's health insurance.

There's more ...

Several factors in the union's proposal, including smaller class sizes and strong incentives for teachers to choose more costly health plans, could further inflate by millions of dollars the cost of the union's plan.

For example, the mandatory class size limits in the union's proposal would force the district to incur penalties or hire more than 30 new teachers.

Under the union's proposal, the district would pay a cash penalty to teachers for each additional student in their class beyond required class sizes

This provision would cost the district anywhere from $296,000 to $1.75 million - depending on whether the district takes the penalty or hires more teachers at roughly $50,000 per teacher.

With the cost of reduced class sizes included, total teacher compensation costs would be between $37.54 million and $39 million, an increase of 24 percent to 29 percent over current compensation.

The district and the teachers union have made little progress so far in closing the gap between the two proposals, according to district news releases.

Though the teachers union and the district agreed to issue joint updates on negotiations, the union did not contribute to the bimonthly releases for more than two months.

The district now is waiting for the union to submit a "reasonable proposal," according to the district's June 20 news release.

The sides have been meeting with a federal mediator for a month and will continue to meet with the mediator "to discuss major economic issues, working conditions and the length of the contract," according to the latest update, jointly issued Thursday by the district and the union.