Health care negotiations in poor health County executive wants school unions to take on costs before funding deficit

For the second year in a row, Anne Arundel County Public Schools is short about $20 million on its health care bill. But this year, County Executive Steve Schuh said he doesn't want to contribute money to close the gap until the school system and its unions agree to renegotiate its health care plan.

"It would be irresponsible for county government to continue to write never-ending multimillion dollar checks for a system that's being managed irresponsibly," Schuh said.

Schuh said the health care deal for school employees is "extraordinary generous and is outside of normal bounds of what is appropriate for employees."

The school unions are negotiating with the county Board of Education. It's unclear if they will reach an agreement before Schuh unveils his budget in May.

Superintendent George Arlotto said if the school system does not curb its costs and get the money to close the gap, then school officials may have to resort to furloughs and layoffs.

School spokesman Bob Mosier said the costs are rising as the school system expands staff to teach and support the growing student population. From 2015 to 2016, the school system spent $170.6 million on health care, pulling $18.2 million from its reserve fund.

In the fiscal year beginning July 2016, Chief Operating Officer Alex Szachnowicz said he's anticipating the school system will use its reserve fund and still be short millions of dollars.

Arlotto asked the county executive for an additional $20.5 million for the next fiscal year.

Last year, state officials allowed Schuh to put $10 million as a one-time fund into the school systems' health care program. Typically, money used for operating expenses, such as benefits, must be recurring.

The state and local officials agreed on the exception under the condition that school officials come up with a long-term plan to curb costs.

School employees pay between 7 to 10 percent of the premium, the monthly cost of health insurance. An office visits costs about $5 to $10, and employee can opt for a plan with no deductible.

About 4,200 employee are paying 7 percent of the premium, according to Szachnowicz. Another 4,000 employees are on another plan that require them to pay 10 percent of the premium. The schools system is phasing out a third option, which is used by about 600 employees, that require employees to pay 30 percent of the premium.

Schuh says county schools' health care plan is not the standard in Maryland.

Baltimore County's teacher contract includes one option with premiums rising from 10 percent to 20 percent from 2012 to 2017. Another option similarly rose from 10 percent to 15 percent in those years.

In Montgomery County, the employee portion for an insurance plan rose from 5 percent in 2014, to 12 percent in 2016. For another option, it rose from 10 percent to 17 percent in those years.

In Howard County, employees who started before June 30, 2011 pay 13 percent of the costs. Employees who started after July 1, 2011 pay 15 percent.

Schuh wants school employees to share about the same percentage of premium costs as county employees, which ranges from 15 percent to 25 percent. He also wants to see copay go up, arguing that low costs incentive people to overuse medical care.

School board president Stacy Korbelak said people who regularly visit their doctors catch illnesses before they become serious and costly.

She said the board is working to reduce cost by both negotiating with the unions and with the insurance company.

Her goal is to reduce the overall cost of health care so that if school employees end up paying a bigger portion of the bill, they won't be paying a bigger dollar amount.

Bill Jones, the director of the teachers union, said the negotiations have been one-sided.

"There's nothing else on the table to justify to our members we're making concessions," he said.

"If Schuh wants us to pay more in health care, he's got to pay us like he pays them," he said, referring to county employees.

Schuh, who began his term about two years ago, said he supports pay increases but disagrees he's treated the teachers union differently than those in the county.

The budget office and former County Auditor Teresa Sutherland compiled data showing the teachers union received fewer raises since fiscal 2009 than any county unions. From Fiscal 2009 to Fiscal 2016, police and deputy sheriffs got about a 29-percent raise while teachers got a 19-percent raise.

The teachers union negotiates with the school board while county employee unions negotiate with county officials. But the county executive and county council allocate money for salaries for school and county employees.

Korbelak said the discrepancy likely is a result of the higher costs of funding raises to a union with thousands of employees.

The fire department union represents about 800 employees, while the teachers union represents about 6,000 members.

Jones said he believes the state law the requires local officials to fund schools at a minimum per student rate every year disincentives local officials to give generous raises. If local leaders give teachers a big raise during economically prosperous times, they must meet that new standard next year. This makes local leaders reticent to raise salaries in good years, he said.

Credit: By Cindy Huang - [email protected]