Union deficit, spending issues hit as Michigan becomes right-to-work state
The state's largest teachers' union is spending more on employee salaries and benefits than on "representational activities."
And, the money the Michigan Education Association spends representing its members is down as well. That could come into play as MEA members soon will have the choice as to whether they want to pay dues to belong to the union.
The reports the MEA filed with the IRS show that it spent $16.6 million on representational activities in 2011, and $15.2 million in 2012, an 8.4 percent decline. The MEA's costs for its own employees' benefits increased from $21.6 million in 2011 to $24.1 million in 2012, an 11.5 percent increase.
Representational activities (money spent on bargaining for contracts for members) made up 11 percent of total spending, while spending on "general overhead" (union administration and union employee benefits) comprised 61 percent of total spending
Although overall spending was down by about $6 million from 2011, direct spending on political activities and union employee benefits increased.
Michigan's new right-to-work law, which goes into effect in late March, will allow public school employees to decide whether they want to pay dues or fees to the union without the threat of being fired for not paying. Teachers and other unionized school employees will get that choice after the law goes into effect and once their current contract expires.
"Dues-paying members have to ask themselves, 'What are we getting?'," said Michael Van Beek, director of education policy at the Mackinac Center for Public Policy. "It gets to the question, 'Does the MEA exist to benefit its members or does the MEA exist to enrich itself?' It looks like they are prioritizing enriching themselves."
MEA Spokesman Doug Pratt didn't respond to a request for comment.
The MEA has net negative assets of $159.3 million as of Aug. 31. The union lost $48 million in assets in the past year.
Total liabilities are $222 million, up from $178 million in 2011. According to the union's financial documents, the majority of these liabilities are for MEA retirees. Pension liabilities are at $129 million and retiree health care is at $79 million. These have increased since 2011 by about 64 percent and 43 percent, respectively.
The MEA collected $62.7 million in dues in 2011, but saw that drop to $61.8 million in 2012.
In the past, the National Education Association has stepped in and helped its state affiliates that were in financial stress, said Mike Antonucci, who runs the Education Intelligence Agency, a private firm that researches the inner workings of teachers’ unions across the country.
Fifteen of the NEA’s 53 local affiliates had a budget deficit in 2010-11, according to Education Intelligence Agency research.
"They can't bail everyone out," Antonucci said. "If Michigan was the only place that was having problem, I think the NEA could take care of it. The problem is the number of affiliates that are having problems is piling up and the NEA is having financial problems on its own."