Thursday, January 28, 2010

Budget is Released

Governor Jack Markell presented his budget proposal today. The five furlough days will remain in effect for next year if the budget is adopted as proposed. The moratorium on NBC and professional development clusters will also continue. However, step and lane increases will apply to those eligible. Furthermore, the Governor intends to hold current employees harmless from health care cost increases this year.

The unit count formula will remain unchanged, to keep class sizes from expanding.

Some change in transportation funding for schools will take place although it is not clear if the change will be an actual reduction or in the management of the funds.

The proposed budget includes a two tiered health plan and pension. In other words, current employees' benefits would remain unchanged, but new employees would have reduced benefits. The details have not been developed on this idea. DSEA will be advocating for an alternative or a modification of this proposal.

There is much more budget information to come. We will be sharing with members as we learn more, so that you can be a part of advocating for the best possible outcome.

Tuesday, January 26, 2010

Freeze Will Get Chilly Reception

Government spending freezes, caps on appropriations, and revenue limits, they are all the rage now, and they all come from the same wrong-headed place.

First and foremost government is in the business of delivering public services. Public services tend to be those that are vital to a society, too important to be left to the whims of the private market, and very expensive to provide. Public services such as health care, and corrections usually rise in cost at a rate well above the general inflation rate.

State governments face challenging and changing demographics that are not conducive to spending caps: Populations grow, populations age, recessions increase needs such as Medicaid, the federal government makes demands that are often unfunded mandates.

States that have gone down the route of either spending or revenue raising limits, often called TABOR (Taxpayer Bill of Rights) or Hancock Amendments, have found state services, including education devastated.

The federal government is reportedly about to make the same mistake when President Obama will call for a spending freeze in discretionary spending in his State of the State address. Discretionary spending is that part of the budget proposed by the President and debated by Congress. It is more than one third of the budget. The freeze proposal is most probably a political knee jerk reaction to the Democrats losing the Massachusetts US Senate race last week. A spending freeze will be used to demonstrate that the Administration is fiscally responsible. However, this policy is flawed for a number of reasons.

First, Obama excluded all defense and security spending from his freeze. That excluded portion of discretionary spending represents 58% of the pie. Other causes such as health (5%), unemployment insurance (5%), and education (7%) fight over the remaining crumbs. Natural resources and the environment is also in the mix (3%), as well as veteran affairs (4%). Services and programs that most benefit the middle class and the poor will be frozen as demand rises in the recession. Meanwhile, the defense budget will roll on unquestioned about inefficiency or fraud. For example, during the Iraq War $9 billion dollars has simply disappeared. It can not be accounted for, although presumably it is in the pockets of defense contractors.

Second, Obama is freezing discretionary spending in a deep and jobless recession. Economists such as noble prize winner, Paul Krugman and former US Labor Secretary, Robert Reich are highly critical of this move. Krugman called it, "Appalling on every level". It does seem to be the exact opposite direction from a stimulus package that was designed to spend the economy back to life through worthwhile infrastructure projects and public services.

Finally, the spending freeze which is bad policy will also be bad politics. Republicans such as John McCain are already saying the freeze is not enough. Meanwhile, the Democratic base is wanting more populism from the President. Many of the base see the freeze as another way in which the common people take a hit while corporate interests in defense and banking continue on a free ride.

Sunday, January 24, 2010

Budget On the Way

On Thursday, January 28th the Governor will present his budget, his plan for covering an estimated deficit of $300 million. It is often said that the "devil is in the details". In this case let us hope the angel is in the details. After learning from the State of the State address last week that the Governor wants reduced health benefits for new hires, we await the details. Is it possible that the two tiered plan would be a temporary situation, with benefits equalizing for everyone after the economic crisis? Would there be a possibility for new hires to buy into full benefits after a given time? Will new hires be made whole after they have been employed for a length of time?

We keep our fingers crossed and hope that the collaboration which accompanied Race To The Top will carry over into budget discussions.

Thursday, January 21, 2010

Solidarity Now and (Forever?)

Today Governor Jack Markell gave his State of the State address before the Senate and House and a packed crowd of visitors. There were a number of encouraging and complimentary things said about educators in Delaware, including a special recognition given to DSEA state president, Diane Donohue.

However, the affair was clouded by reference in the speech that the Governor would seek to reduce health benefits for new hires.

Although this would not impact current members, it would impact all future members and generally weaken both the profession and the union in the long run.

Educators should think of two principles that are a part of their work life, solidarity and collaboration. As union members can you truly say you believe in solidarity and yet trade the welfare of all your future brothers and sisters for your own security? As an educator who will be working side by side, collaborating with a young colleague, can you look that person in the eye if you have traded away their benefits?

A two tiered benefit proposal will be a tough issue for DSEA membership and for the coalition of state workers known as State Workers United for a Better Delaware.

The United States Supreme Court dealt a blow to democracy today in a 5 to 4 decision that will allow corporations to spend unlimited amounts of money on campaign adds. This does not mean corporate PACs. It means right out of the ol' corporate checkbook, purchasing millions of dollars in TV and radio.

You may hear a counter spin that says, "unions will be allowed to do the same thing". Don't for a minute believe that this is anything like a level playing field. Unions simply do not have the money to compete with global corporations.

Many years ago when I worked for the AFL-CIO we were out-spent by business at a twelve to one ratio in campaigns; except when the campaign involved a candidate in a leadership position or chairmanship, in which case the gap widened to thirty to one. That was almost twenty years ago when unions had more power and money. The giving gap is probably even larger today.

A few years ago, economist David Korten wrote a book called, "When Corporations Rule the World", how prophetic.

Wednesday, January 20, 2010

Employee Benefits Under Discussion

Today the State Employee Benefits Advisory Committee met (SEBAC). This committee functions only in an advisory capacity. SEBAC usually meets a couple of weeks before the State Employee Benefits Committee (SEBC), the actual decision making body for the employee health plans. The SEBAC is provided some information in advance of the SEBC meeting and allowed to discuss issues. The SEBAC is also given time on each SEBC agenda to give comment on the issues at hand.

At the SEBAC meeting we were given a preview of the SEBC agenda for next Monday.

Medco the prescription drug administrator will give a presentation on generic drugs and speciality drugs.

There will be a discussion on three costly areas and possible savings options. First, the plans expenditures on fertility drugs and fertility procedures such as in vitro fertilization be reviewed. Fertility drugs and procedures cost the plan about $2 million annually. A possibility of a patient cost share of 25% may be considered.

Second, bariatric surgery, procedures to aid weight loss for obese people is on the agenda. The procedures cost the plan $2.5 million annually. Again, a cost share of 25% was suggested.

Third, MedSolutions a company that administers a managed care component for radiology services will be considered again. Last year a presentation was made by MedSolutions claiming cost savings could be had by restricting the approval for tests such as MRI, CT, nuclear imaging, and PET. Last year 23,000 plan members had one of these procedures costing the plan $12.5 million. Managed care might realize a $2 million savings.

DSEA raised questions and concerns over the MedSolutions proposal at SEBAC and may do so at SEBC as well. We will be looking for information such as, is the radiology claim cost out of proportion when compared to utilization under similar health plans? How does our radiology use compare with national averages? How does it compare with the state average? What procedures are the big cost drivers? Are there certain doctors, hospitals, or clinics that are cost drivers? What is the data on usage by populations within the plan? Are there areas of the state where usage is higher? What does the medical community think about the use (overuse?) of these tests in Delaware?

The above questions might be summed up as, radiology is expensive, there is a lot of use, but does that necessarily mean overuse and waste? Managed care saves money by denying access. By putting radiology under managed care will we be eliminating waste or denying needed care?

All of these cost cutting discussions are spurred by a $48.7 million general fund deficit in the health plan. Now you know why DSEA monitors SEBAC and SEBC meetings.

Tuesday, January 19, 2010

Press Conference Marks RTTT

There is a lot of activity at Legislative Hall for so early in the session. This situation is due in part to Delaware's rules regarding legislation. Legislation is considered alive for an entire General Assembly, not just a single session. For example, in most states, if a bill was filed last year and did not make it through the process before the closing day of that session, then the legislation is dead and must be refiled and start the entire process anew in the next session (1st and 2nd readings, assignment to committee, hearing, etc.). In Delaware a bill filed last session is still considered alive within the 145th General Assembly. So, wherever the legislation was in the process last session, it can be picked up from that point for this, the 2nd session of the 145th General Assembly. All of this is a long-winded way of saying that 2nd sessions in Delaware are busy because some legislation moves early having had a head start in the last session.

A press conference was held in Governor Markell's office today to recognize the completion of the Race To The Top grant application. The federal grant guidelines state that Delaware could receive between $20 million and $75 million.

If I were a betting man, I would bet on the higher end for Delaware. We are a Phase I applicant, we are in a competitive grouping advantageous to us, and we have a plan that is ambitious without being offensive to teachers. All 19 Delaware teacher locals in the state signed the Memorandum of Understanding (MOU)that accompanies the RTTT grant application.

This MOU is not a collective bargaining memorandum of agreement. Rather, it is a document that outlines areas of agreement between the Delaware Department of Education and school districts that sign. The teachers' associations sign on to demonstrate that they are willing to work with their districts to develop a plan. Although grants are awarded in April, Delaware will probably know if they have succeeded by sometime in March.

The press conference reaffirmed the good work of DSEA with the Department of Education and Governor Markell's policy people.

Friday, January 15, 2010

First Week Accomplished

The first week of the second session of the 145th General Assembly is finished. The House even worked late on Thursday, wasting no time getting down to business.

The state will continue to have budget problems for FY2011 due to the economic recession. While it should be obvious, that fact needs to be restated. Delaware, along with almost every other state in the nation has seen revenues fall through the basement and needs (unemployment benefits, medicaid, etc) rise due to the recession. It confuses me to hear some policy makers continue to talk about our budget problems in the context of state government being too big. State government may or may not be too big. It may just need to adopt best practices and efficiencies and stop always using "the Delaware way" as an excuse for every parochial, out-dated, stubborn thing we do. However, regardless of all this, our money problems are the same money problems every state, county, city,business, and family in America is having right now. Let us not use the daunting and devastating challenge of the recession to berate government.
DSEA, AFSCME, and the Trooper Association are pushing for legislation to give us representation on the State Employee Benefit Committee. This is the committee that has governance over educator and state employee health plans. Currently, no stakeholders sit on the committee, only cabinet level people: Director of OMB, Controller General, Secretary of Finance, Treasurer, Secretary of Health and Human Services, Insurance Commissioner and Chief Justice of the Supreme Court.
In the early hours of the morning on Thursday, January 15th Labor (including the National Education Association) reached an agreement with the White House over a proposed excise tax on health insurance premiums. The US Senate version of the health care bill seeks to pay for the plan, in part, with a tax on health insurance premiums.

In the compromise, no union or public employees will come under the tax until 2018. The tax will start on family plans valued at $24,000 and single plans valued at $8,900. The tax is collected from the provider of the plans (employers, or health trusts). Presumably, the late enactment for these groups will provide time for the Feds to find a more reasonable funding mechanism, or for unions to adjust their bargaining strategies and place more emphasis on wages than benefits.

If this tax remains with us for the 2018 implementation, it will be problematic for education and other public employees who do not directly negotiate their health benefits. It will effectively result in a cap on the state's premium spending with either a reduction in plan benefits or increase in co-pays to keep up with health care inflation.
Thanks for reading and remember to check in often now that we are back in the legislative season.

Wednesday, January 13, 2010

Session Opens

The 145th Delaware General Assembly is back in session. Yesterday, the first day, was a slow day. First days are usually slow as both chambers prepare for the new legislative year. This year opening day was more subdued than normal because of the funeral of Vice-President Joe Biden's mother. The Senate passed a special proclaimation in honor of Mrs. Biden.

The House Education Committee will meet today at 2:30PM. No bills will be heard. Secretary Lowery will update the legislators on the Race To The Top application process.

Remember to stay tuned and check this blog often. With session being open, the blog will go back to several postings a week.

Wednesday, January 6, 2010

Race To The Top Moving Forward

Delaware's Race To The Top application is moving forward with a foundation of new regulations about to be passed by the State Board of Education and a Department of Education Strategic Plan.

The Markell Administration including the Delaware Department of Education has done their best to make a challenging situation, less daunting. DSEA has been engaged in the process providing a position paper to the Administration and many conversations around elements impacting their membership and the students.

The result is a reform effort that encompasses many positive elements including the following:
*Implementation of the new DCAS growth model student testing, and the use of other measures of student learning.
*Professional development during the transition to new standards and assessments.
*Creation of a coherent professional development that links sills with evaluatory expectations.
*Collaborative planning time during the school day for teachers in DCAS subject areas.
*The training of administrators in evaluations with audits of the evaluators.
*Creation of Teacher Leader positions with additional compensation.
*Development of a plan for Turn Around Schools in the Partnership Zone through the collective bargaining process.
*Development of a teacher residency program.
*Data and development coaches provided to schools.
*Use of school administrative managers to give principals time to be instructional leaders.

DSEA continues to brief teacher leaders across the state about RTTT.