Teachers union regaining momentum [The Indianapolis Star]

Jan. 28--No doubt about it, the Indiana State Teachers Association came out of the statewide November elections with a big winner.

One of its own, teacher and union activist Glenda Ritz, won election as superintendent of public instruction, upsetting Republican incumbent Tony Bennett to grab control of the state's top education post.

It's a rare bright spot for ISTA.

Since the 2009 collapse of its insurance trust, the influential teachers union has been financially and operationally hobbled, a condition the recent electoral bragging rights aren't expected to reverse anytime soon.

"The victory of Glenda Ritz . . . certainly will go a long ways to rebuilding a belief that ISTA can have significant clout," said Andy Downs, director of the <org>Mike Downs Center for Indiana Politics.

But Downs notes that ISTA still has to prove that it can overcome its own financial challenges.

Among them:

After its insurance trust collapsed, ISTA found itself saddled by debt, which helped put it $4.2 million into the red in its latest reported fiscal year of 2010-11.

Over the past three years, its lifeblood -- dues-paying membership -- has fallen by about 10 percent, to 45,000. Widespread layoffs of teachers by many schools played a role in that drop.

ISTA has given up its independence, including the deed to its longtime Downtown office tower, to its parent, the National Education Association, which bailed out ISTA and has run it under a trusteeship since 2009, with no end in sight.

Although ISTA settled a hard-fought lawsuit against its former executive director, it still faces a high-stakes legal battle with the state securities commissioner. The state seeks damages of more than $24 million from ISTA over the mishandling of the insurance fund, an amount equal to ISTA's annual revenues.

Brenda Pike, ISTA's executive director, sits in her office in the 10-story ISTA Center at 150 W. Market St., where ISTA is now a rent payer, and attempts to sum up her trying three years on the job.

"We are not prone to having our dirty laundry shown in public," said Pike, a onetime English teacher who was the No. 2 at the Texas State Teachers Association before being hired in Indiana. "For our members, it's certainly an open wound that this would happen to their union."

ISTA has been stanching the damage. It has settled some of the lawsuits against it and is negotiating givebacks in benefits with two unions that represent its unionized employees.

ISTA quietly settled the lawsuit involving its former executive director, Warren Williams, last year. Terms were confidential, but Williams said he got ISTA to pay his substantial legal fees, and then some.

Still, Williams is upset the settlement didn't cover the value of retirement benefits that he says ISTA stripped from him when he left in 2009. He was one of the longest-serving state NEA executives in the country at the time.

"I am extremely angry, extremely bitter," said Williams, now retired at age 70 on Hilton Head Island, S.C. "The biggest hurt probably is the 45 years I gave to NEA and the way they treated me. We would never allow a member to be treated (like that) -- no hearings, no due process, nothing."

Williams contends ISTA shelled out far more in legal fees pursuing him and others in court over the insurance fund collapse than it recovered in settlement money.

"A lot of members should be really upset and should be asking for a total accounting," he said. "It's just an absolute total waste of money."

Pike wouldn't discuss details of the settlements with Williams or others, other than to say Williams' account is "incomplete and inaccurate."

"It needed to be done," she said of the lawsuit against Williams, who had been ISTA's executive director since 1984. "Everyone I know hoped there would be some penalty to bear. There was a need for litigation, regardless of the cost. What was done was done in the interest of our members, our organization."

ISTA was left responsible for a reported $57 million in liabilities when the trust went under from bad investments. Most of the losses stemmed from its underfunded long-term disability plan that was sold to educators statewide. (Pitching insurance was one way ISTA incentivized its members to stay in the fold.)

ISTA doesn't expect to pay off the plan's liability until 2027, using member dues and loans. "It could be less, probably won't be longer," Pike said.

One wild card that could add considerably to ISTA's financial woes is the pending lawsuit against it by the state.

The state seeks damages of $24 million, plus legal fees and other costs, to recoup losses tied to 26 school districts and their teachers that participated in ISTA's ill-fated insurance plan.

"Our securities division has taken our responsibility seriously," said Indiana Secretary of State Connie Lawson. "We hope to protect the school districts and teachers that invested in this health plan."

The state has alleged fraud, breach of contract and other charges against ISTA in the case, filed in federal court in Indianapolis.

ISTA and the state tried to mediate their way out of the dispute but couldn't agree. The judge put off an October trial date in order to rule on pending motions, including one by ISTA to dismiss the charges.

Pike called the state's lawsuit "a significant concern," but she added, "We don't believe there will be any possible way the state can prove their case."

ISTA today is a smaller version of the organization it used to be.

Since 2009, its staff has shrunk from 180 to 59 people. Much of that was from casting off the insurance business, but deep cuts also occurred in professional staff, which has been reduced from 35 to 24 people.

To cut costs, the state's largest teachers union wrested contract givebacks from its own unionized staff. Two staff unions that represent 46 ISTA employees agreed last summer to benefit givebacks for the sake of "ISTA's financial well- being," said David L. Smith, president of ISTA's professional staff union.

"We are all disappointed, obviously, that we are even in this situation," he said.

"We are working with management the best we can to survive," said Beth Breisch, president of the other staff union. She said the givebacks by unionized staff are "a realization you can't get blood from a turnip; ISTA has fallen on some hard times."

Neither side would discuss what benefits the unions gave up.

The man who oversees ISTA, NEA-appointed trustee Bill Thompson, wasn't made available by the Washington, D.C.-based NEA for comment.

Pike said she works hand-in-hand with Thompson and he gave his blessings to the union givebacks as well as the lawsuit settlements.

An Indianapolis Public Schools teacher who is an organizer for ISTA said the financial troubles haven't seemed to hurt member recruitment in IPS. "I've never had anybody ask me about that. That's not a big issue," said Ann M. Wilkins. "As long as we provide quality service, those (financial issues) aren't in the forefront of our members' minds."

Wilkins said she is satisfied with ISTA's efforts to deal with its financial troubles. "We're still standing," she said. "They're trying to keep their head above water."

Some outsiders see ISTA as a less potent force in politics and education because of its troubles.

"They're a mess financially. ISTA doesn't expect to be solvent until 2027. They're basically subsidized by the NEA," said Mike Antonnuci, who runs Education Intelligence Agency, a teachers union watchdog group based in Sacramento, Calif.

Indianapolis Republican fundraiser and strategist Mike Murphy said ISTA's financial woes "caused a weakening of both moral support and financial support."

"They've lost their moral ground," he said.

One indication that ISTA remains a force in public policy: Its main political action committee, Indiana Political Action Committee for Education, spent $1.56 million on statewide elections last year, according to state campaign finance records. That was the highest expenditure for I-PACE in any election since 2005.

Ritz, though, won election as the new state superintendent largely through a word-of-mouth and social media campaign and was heavily outspent by the Republican incumbent.

Over the years, ISTA's political donations have gone heavily to Democrats.

State Rep. B. Patrick Bauer, D-South Bend, the former House Democratic leader, said he believes ISTA's influence in the legislature has waned in the past two years, mostly as a result of Republican majorities in both houses and not because of ISTA's financial woes.

"They've definitely been diminished just by that (the Republican dominance)," Bauer said.

Bauer said the election of Ritz was "a moral victory" for ISTA but said that for it to gain strength, "There's no question they have to go out and recoup new membership."

Pike said ISTA can retain its influential public voice even as it puts its own house in order.

"We're not focusing on all that horrible mess," she said of the financial troubles. "ISTA's going to continue to pursue its reason for existence: enhancing public education and the rights of our students to a quality public education.

"It is no secret that the prior administration left ISTA with tremendous financial challenges," Pike said. "We have been working hard to overcome those challenges, and I believe that thanks to the hard work and sacrifices of ISTA's members, we are now on a path that will allow us to do so in the future."

___

(c)2013 The Indianapolis Star

Visit The Indianapolis Star at www.IndyStar.com

Distributed by MCT Information Services