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School Board’s contract offer appears fair to everyone

The American Federation of State, County and Municipal Employees (AFSCME) union representing school district bus drivers, nutrition employees and paraprofessionals have been complaining that the school board refuses to bargain with them concerning primarily health insurance and wages.

The school board declared an impasse on January 11, after nine months of negotiations and the union refuses to accept the district’s final offer. AFSCME members believe the district’s contract is unfair and demands continuing negotiations.

The district’s current premiums have increased by 19% or $6.8M over the last three years and the trend is expected to continue.

Yet the district’s final offer ensures that employees’ new premiums on 4 of the 6 plan options will remain constant for the duration of the contracts. The remaining two plans are based on percentage of premium and could go up if future premiums increase for the district.

Since percentages can be intentionally misleading during interviews and in news articles, actual premium values will be used wherever possible.

First, AFSCME employees work and pay their premiums for only nine months but they are covered for the entire year by the school district – that’s more than fair.

Employees may choose to take advantage of the wellness option to substantially reduce their premiums. The school district pays the full premium for their employees regardless whether the employees choose to take the wellness option or not.

Over 350 AFSCME employees currently insured by the district in the PPO1000 health plan, with an annual deductible of $1000, could reduce their Family Plan premiums by 22% to $163.65 per month from $209.11 per month by choosing the wellness option.

The remaining 260 employees under the current PPO500 health plan, with an annual deduction of $500, could also cut their higher premiums by substantially more to pay the same $163.65 per month under the PPO1000 plan.

All employees on a Family Plan can pay a zero premium and receive $1500 incentive from the district if they choose an HSA high deductible plan.

The district obviously needs AFSCME employees to fairly share some of the costs of their health insurance because the district pays about $50M of their $400M annual budget on health insurance. One dollar in eight goes to health insurance costs!

Choosing a PPO1000 plan, with the wellness option, will reduce many employees’ premiums by more than enough to offset the increased $500 annual deductible and keep their wage increases.

This year, the full cost to the district for family coverage is approximately $26,300 for the PPO500 plan, while the PPO1000 cost is $24,800 with the district and the taxpayers paying 90 to 95% of the full premium – another more than fair deal for AFSCME employees.

RPS205 also offers much better benefits than surrounding school districts. Most districts outsource nutritional workers, Belvidere, Freeport and others only pay the employee premium while the employee pays 100% of dependent coverage. Rockford is also more generous than Harlem.

To compare AFSCME premiums to a retired couple (employee plus spouse) on Medicare, begin with $218 taken from their Social Security checks for Part A. Add the Medicare supplement, for which Blue Cross, Blue Shield (Plan F) costs $448 and Part D for prescriptions another $131 per month, for a total cost of $800 per month.

Costs for AFSCME (employee plus spouse) for PPO1000 without wellness is about $132 per month for 12 months and with wellness monthly premiums are $100.56. Those prices seem pretty fair to me, when a Medicare couple is paying 6 to 8 times that amount!

The AFSCME wage proposals increase salary 30% for nutrition workers, 26.2% for bus drivers and 35% for Paraprofessionals over a three year period = $10.6M compared to $3.6M offered by the district, which would result in $7M more for district taxpayers.

AFSCME employees want to use the school district balance of $100M to supplement their current premiums. This balance is equivalent to only 3 months of the district’s annual expenditures. Policy requires the board to maintain this level of reserves to prevent deficit spending for daily operations while waiting for payments from the state and federal governments.

Illinois median property taxes are now the highest in the nation at 2.62% of Fair Market Value or $2620 in property taxes for a $100,000 home. Rockford property taxes are currently between 4% and 5.2% of FMV; nearly double that of the highest state median in the country.

That’s why AFSCME’s contract negotiations must also be fair to the taxpayers.

For further info – Go to rps205.com and click on “Negotiations Update.”

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