Express-Times Editor on the "Public Trough"

Joseph P. Owens, Editor, the Express-Times wrote an opinion article on Sunday titled, "Public Trough Cannot Be a Bottomless Pitt (read it here)."

In the article he cites the Phillipsburg Municipal Workers and Nazareth Area Teachers' Association in regard to pensions and healthcare. The point is simply:

"Public employees need to confront the reality of no free lunch when it comes to the rising cost of health care and fixed pensions."

This point was repeatedly attempted to be made by individuals commenting on this site last week in regard to the teachers' dismissal of the fact finders' report.

Owens points to the fact that the NAEA would have moved from $25 per pay to 1.5% for family and 0.5% for an individual under the fact-finders' proposed contract, but rejected it.

What was the NAEA's position on this? The NAEA wanted no change (according to the Parties' Positions section of the report). Each member would pay $15.00 per pay for individual and $25 per pay for family (26 paychecks = $650 annual contribution or roughly 1.75% for $40,000 per year).

What arguments were there against this? The biggest one was that the coverage was the "worst in the Lehigh Valley." This isn't an argument for the amount being contributed. The other was that it was unfair to attribute a percent of salary for a fixed cost item, because the higher up the payscale the more you pay for the same benefit.

One point on that argument is that as a collective, everyone pays the same for the same plan. The fact is that increased age of members results in increased costs to everyone. In effect the younger members are paying more to cover the costs of the older ones who use the coverage more often. So the percent of salary option balances the amount contributed and the amount being charged for the coverage.

Outside of a percent is the option of a flat fee. Determining the flat fee can be arbitrary - a fixed amount like the $15 or $25 contribution (totaling $390 or $650 per year) that must be negotiated each contract and is fixed each year of the contract, or a fee based on paying a percent of the cost of the plan, which will fluctuate each year based on the new costs of the plan.

Depending on options, right now a family plan will run in the neighborhood of $1200 per month (referring to only medical, so if the district includes optical, dental, etc, it would probably be higher) or $14,400 for the year. The $650 contribution comes out to 0.45% (again estimates not knowing the district's cost per family package).

Options seem to be:

• No change - arbitrary flat fee $390 or $650 contribution per year for everyone.
• Percent of Salary (fact finder) - 0.5% or 1.5% (at $40,000 = $200 or $600)
• Percent of Salary (NASD) - 1.5% rated up to 2% over five years (at $40,000 = $600 to $800) per year for everyone.

Additional option could be:

• Percent of Plan Cost - where each employee pays a percent of the cost of the plan they chose. The question is what percent (each will assume $500 per month or $6,000 individual and $1200 per month or $14,400 year family).
  
• 20% contribution - annual cost: $ 1200 individual ($46.15) and $2880 family($110.77)
  
• 10% contribution - annual cost: $ 600 individual ($23.08) and $1440 family ($55.39)
  
• 5% contribution - annual cost: $300 individual ($11.53 per pay) and $720 family ($27.69)
  

Of course under this last option the plan cost can change in each year (just as a salary would if using a % of salary option).

Clearly no one wants to pay more, teacher or otherwise, but if a payment is to be made and the contract is to be approved this issue will need to be resolved. The NASD and fact finder want a greater contribution. As someone commented on this site, negotiation is about give and take, the NAEA will need to give on this one and their best option is to pick the option that works best for them before a 3rd party binds both to something neither may want.