Here & Now

Howard On Potential Move To Act 10 Related Insurance Change

Zac Schultz:

On paper some of the big winners in the governor’s budget are public schools. The governor wants to invest an additional $650 million over the biennium. But for some schools there’s a catch. Joining us now to talk about that is James Howard, President of Madison Metropolitan School District. Thanks for your time today.

James Howard:

Thanks for having me.

Zac Schultz:

Governor Walker is calling for an increase in funding of $200 per student in the first year and $204 in the second year. After six years of proposed cuts from the governor, that’s got to be good news, right?

James Howard:

Well, it’s good news, but you have to really think about the fact that we have been working really with quite a bit of a deficit. I just want to make sure everyone understands that although it’s good news that it’s really hard to make up for the deficit we’ve been under the last six years.

Zac Schultz:

And of course there’s a catch with that as we mentioned because the governor’s budget says school districts must be in compliance with Act 10 before receiving that aid and Madison School District is not.

James Howard:

Well it depends on how you define it. Under the original definition of compliance, we have been compliant. And under the new definition which we’re just studying, seems as though, yes, there is a little bit of a catch. But we feel that we will be able to come into compliance with the new definition. It’s something we have not studied and talked about yet with administration and board. This is all new. But we feel that, yes, we should be able to come in compliance with the new definition. But we need to study it a little more.

Zac Schultz:

And that word “compliance” is interesting because ever since Act 10 came onboard the governor and his allies have talked about it as the “tools” of Act 10, to allow school districts to handle the cuts in state funding that were coming their way and allowing each district to make their own choices in how they use that. You felt you’ve been in compliance with what the law required.

James Howard:

We've been in compliance. What we really want to acknowledge and really make a point of is that we have over the last six years worked with our staff and we’ve had this collaborative process in place and we feel that through that process that we’ve really come into agreement and come to a point where we’re getting the best agreement between staff, administration that’s possible. And we have to understand that if you were to place an entire say 12%, which is called upon in the request in terms of Act 10 compliance, that’s a big hit for our staff. And we have worked hard to work with our carriers, our insurance carriers, keep costs down and we think that we’re in a good place. The only thing we’re asking is allow us to continue to be able to manage it on the local level and not really mandate how we should take care of our staff.

Zac Schultz:

And just to clarify for our audience that may not be familiar with the deal, the area that’s in concern here with Madison is the amount that teachers and staff pay towards their health insurance premiums. Act 10 required it to be around 88% and Madison staff does not pay that much. The school district pays more, but obviously making them pay more would mean a pay cut for them.

James Howard:

Well, let’s understand that the requirement was really on municipalities, on city government. It really was not on school districts from the beginning. And so this is what’s new. That he’s now–the governor is now placing the requirement on school districts. Six years ago when Act 10 came into existence, it was for city government. It was not for schools. We had the option of requiring up to 12%. For a few years we didn’t require anything. But as of today we do require between 1.5 and 10% from our staff.

Zac Schultz:

It seems like Act 10 had been in the past. Most municipalities and school districts had moved on with whatever agreement they had. Does it feel like the governor is ripping open old wounds here?

James Howard:

We like to refer to it as the re-election budget. And we think that some of this is political. Let’s face it. School districts, if you look at, for example, referendum as an indicator, many districts across the state have been going to referendums. And the reason that is is that districts, especially rural districts, have not had the funding that’s needed to provide for programming. We’re wondering if this is not a little bit of politics and this is a pretty much a re-election budget. Yes, we’re more than happy to receive funding, but we’ve been really on a tight purse over the last six years.

Zac Schultz:

And obviously there’s a long way to go in this budget before it becomes law, but if it does as written, if the Madison School District didn’t come into this new definition of compliance, they wouldn’t receive some of this per pupil increase which affects students and local taxpayers. That would be pitting a lot of groups against each other at the local level if you didn’t ask teachers to pay up to the full 12%.

James Howard:

I think the way we’re going to proceed is to come to the table with staff, come to the table with our teachers and really talk about — and this is the process we’ve had in place, really talk about — use a collaborative process and say how do we move forward. How do we move forward with the requirement now that we require you all to pay up to 12%? How do we really do that? We do know there are also some legislators that are saying that they’re not really pleased with these numbers. And so it may not really come to pass. So we’ll sit down with staff, and we’ll talk about this and see through our collaborative process where is the best — where should we end up? What’s the best path forward?

Zac Schultz:

And less than a minute left, but is it a possibility that you ask the staff and teachers to take the cut and pay more for their insurance but then make it up in a pay raise somewhere else so they are made whole in the end of the process?

James Howard:

Well, we do believe in making the entire situation, making our staff whole. That’s a possibility. Again, it’s something we’ll have to talk about. This has only been on the table for a day or two and we haven’t had a chance to vet it properly. Again though, you’re right. It could come to that. We could figure out a way to make it up in some kind of a pay increase. That’s correct.

Zac Schultz:

Have you heard a lot from your staff?

James Howard:

Not as of yet. We haven’t gotten any feedback from staff at this point. Maybe a few emails. But we know from the past that we already have staff that’s hurting. Our lower-paid staff are only making the 20s, 20 some thousand a year. As you know, that’s barely subsistence. When you talk about increasing the amount they pay in to any fund, that’s going to be a big hit for them.

Zac Schultz:

James Howard, thanks for your time today.

James Howard:

Thanks for having me.