During recent legislative hearings on a proposed bill that would force public school employees to pay up to 20 percent for their health care premiums, Grand Rapids Public Schools Superintendent Bernard Taylor speculated about non-teaching employees in his district needing to go on food stamps if the proposal passed.
"I have to be mindful of the fact that we do have employees, as this conversation proceeds, who are essentially working (to pay for) their own healthcare," Taylor said to the Gongwer News Service. "The fact we may now have to start providing them with counseling around food stamps, and things like that — I am concerned that if there isn't a level of flexibility, are we creating a class of working poor people?"
The comment raised questions about the core mission of public schools.
Michael Van Beek, education policy director at the Mackinac Center for Public Policy, wondered if a school district’s core mission is to educate students or employ maintenance workers.
Charles Owens, state director of the National Federation of Independent Businesses, said school districts should consider privatizing non-core related jobs so more time and resources could be devoted to education issues. But Owens also points out that what is considered a low-paying position in a school district often isn’t when the total compensation of that employee is factored in.
In the Troy School District, custodians generally made anywhere from $28,000 to $33,000 per year for a 129-day work year. However the district made $4,200-per-year contributions for retirement and about $9,400 per year for health insurance, to push total compensation to between $36,000 and $49,000 per year in 2009 — for a 129-day work year. And according to the last union contract, when those employees worked 30 hours or more per week, their health care premium was 100 percent covered by the district.
By way of contrast, the Kaiser Family Foundation reports that when the average Michigan employer provides a health care plan for employees, the employer pays 79 percent and the employee pays 21 percent.
Troy has since privatized its custodial services.
In the Battle Creek School District, custodians were generally paid $35,000 per year for a 191-day work year. The district paid $6,000 per year for their retirement, and about $10,600 for health insurance, for a total compensation of about $52,000 per year. Custodians at Battle Creek paid $744 per year for their health care premiums.
Owens said that those jobs are not supposed to be so lucrative.
“The labor unions have very cleverly over the years managed to morph minimum wage entry-level starting jobs into career positions with high-paying benefits, which is what they were never intended to be,” Owens said.
Owens points out that a $33,000 per year custodian in the Troy schools is not comparable to a $33,000 private-sector worker who has to pay 20 percent of their health care costs on average and work more than 129 days a year.
“The problem is you can’t relate that to the private sector,” Owens said. “You have to add their pension and they have a very high valued health insurance policy. If you just do the salary alone, it does look like they are under paid. That’s not the whole story, is it?”
And districts are now finding savings by privatizing.
Birmingham reported that it saved $2.8 million by contracting out custodial and transportation services in 2008-09. Howell privatized its custodial, transportation, pool management and business payroll departments in the last four years and reported $2.9 million in savings.
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.