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February 6, 2012

1) Fifteen NEA State Affiliates Are "Financially Distressed." It might be hard to understand how the National Education Association and its state affiliates - a $1.5 billion annual enterprise - can be experiencing serious money troubles, but there is no longer any question about it. The revelation comes from the people most familiar with the situation - the union's own employees.

The National Staff Organization (NSO) is the umbrella group for the staff unions that represent employees who work for NEA's state affiliates. Each year, NSO holds its Winter Advocacy Retreat - also known as W.A.R. College - where NEA employees learn and strategize about current labor issues, both internal and external. This year's conference wrapped up last Saturday at the Hyatt Regency Miami.

In a report to members, NSO divulged just how bad things have gotten:

Fifteen states are considered to be financially distressed because of membership loss and their very survival is in jeopardy. And because of financial hardship, 41 state executives are on NEA's payroll instead of being paid by their state. Two states - Indiana and South Carolina - remain under an NEA trusteeship.


...Membership losses and the precarious financial position of some states mean an estimated $12 million shortfall this year for NEA and a projected $27 million shortfall next year. As a result, NEA is looking to reduce 88 staff positions. Currently, 124 NEA staff are eligible to retire and have until March 15 to take a proposed retirement incentive.

Even allowing for overstatement, these figures put NEA in a financial bind unprecedented in its recent history. It's important in this context to view NEA and its affiliates as private employers who can afford large and well-compensated staffs when the teacher force is growing and enjoying substantial pay raises, upon which union dues are based. However, NEA is not well-adapted to budget cuts, since its own staff unions are certain to use their considerable skills to prevent mass layoffs or salary/benefit reductions.

It is likely that the union will utilize internal budget-cutting measures to carry itself through the short-term, while banking on external efforts to reverse its fortunes in the long-term. These efforts make take the form of organizing non-union teachers, or increased lobbying and politicking for public policies that will tend to positively affect the union's bottom line.

Unlike the American Federation of Teachers, NEA has always had an affiliate in every state, even though some of them have always been dependent on NEA subsidies for survival. Even if financially desirable, NEA could not withstand the blow to its prestige to start shutting down affiliates. At the same time, propping up weak affiliates is draining strong ones. Who will bail out whom is the difficult choice NEA now faces.

2) Last Week's Intercepts. EIA's blog, Intercepts, covered these topics from January 31-February 6:

Other Than That, It's a Great Idea! No doubt about it. We've got to get another hat.

NEA's 403(b) Redemption. The union wisely works to inform members about who stands to benefit from their investment choices.

*  State Capitol Becomes Teachers' Lounge. The one market where Wal-Mart can't compete.

"We're Not in a Position to Get More Money." The California Teachers Association won't ask members for more money. That's the taxpayers' obligation.

Balanced Budget: California Style. Earn less. Spend more.

New York Higher Ed Disaffiliation. Too many national affiliates for SUNY faculty.

3) Quote of the Week. "We have a potential crime that has gone unreported, at least to law enforcement. There's going to be a complete and thorough investigation." - Beau Oglesby, state's attorney for Worcester County, Maryland, commenting on news that the Worcester County Teachers Association reported an embezzlement of over $100,000 (almost half its annual income) to the IRS, but not to law enforcement authorities. Local and state union officers refused to comment. (February 2 Worcester County Times)


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