The Ohio Education Association and Its Goose
The executives of the Ohio Education Association sent a memo informing local presidents that if the union gave in to striking staffers’ demands, it would require an $80 to $90 dues increase per member. Such an increase would raise roughly $10 million. That sounded familiar to me, so I checked the archives and found this, in the May 8, 2000 EIA Communiqué:
Ohio Education Association in Severe Financial Straits. The last time the Ohio Education Association negotiated a staff contract, in September 1997, it resulted in a two-week strike, restraining orders against picketers, and a lot of bad publicity. That contract expires this year and it’s bad financial news all around for OEA, its members, and the staff. OEA recently informed its local presidents that the union is facing a projected deficit of $6.3 million for next year. The union is asking staff to accept benefit cuts totaling $4 million. The rest of the deficit would be eliminated through a dues increase of up to $25 per member.
“Specifically, and regrettably, we can no longer afford to sustain the current number of OEA employees at their current level of compensation and benefits and continue to provide the expected level of services and programs without significantly raising OEA dues for you and every other member,” reads a memo from OEA President Mike Billirakis and Executive Director Robert Barkley.
Some observers have noticed that OEA professional employees make a pretty good wage – more than $111,000 annually. So we’ve officially reached the rhetorical equilibrium these teacher union staff labor disputes historically attain: Union management using regressive, union-busting tactics against greedy and coddled union employees. You could make a good argument for each side’s spin, but ultimately the only losers are the members.
Staff compensation is the major cause of budget problems for all NEA state affiliates, and the OEA employees have a hard time justifying their demands in a bad economy and what could be declining union membership in the state. But the idea of OEA management as the bastion of fiscal prudence on behalf of members is simply laughable.
Here’s a little more history, from August 29, 2005:
OEA has largely weathered the budget deficit storm of 2000, but it still hasn’t crafted a long-term solution to the increasing costs of staff retirement and health benefits. The union has had labor problems in the recent past, and who knows what will come of its decision to sue its own staff unions? In the meantime, OEA is expecting some small membership growth, but in retirees and fee-payers, somewhat offsetting a slight loss in full-time teachers. Since teachers pay the highest dues, the trend could compel further budget cuts.
And ahead to April 20 of this year:
Ohio Education Association to Pay $3.75 Million in Damages to Retired Staffers. The Ohio Education Association (OEA) settled a class action lawsuit filed in 2004 by retired employees who charged the union with cutting off promised health benefits (for background, see EIA’s story, item #3 here).
Under the terms of the settlement, OEA will pay $3.75 million in compensatory damages to the retired staffers, plus pay into a Voluntary Employee Benefit Association (VEBA) that will fund healthcare benefits to retired staffers beyond the age of 65. The proposal is for the VEBA to purchase “a Medicare Supplement Plan along with additional prescription drug coverage. In order to receive the benefits provided by the VEBA, class members may be required to pay an amount expected to be not greater than ten percent of the premium costs for the supplemental insurance coverage.”
OEA’s annual contribution is set at $375 per retiree (aged 65 and older) per month plus a pro-rated portion of any future increase in premium. The benefit will continue for as long as they live.
There are approximately 118 retired OEA employees in the class, which means the initial annual payment could exceed $500,000 – fluctuating in subsequent years based on how many current retirees reach 65 and how many pass away.
The U.S. District Court for the Southern District of Ohio will hold a hearing on April 29 to decide whether to give final approval to the settlement.
Regardless of the rhetoric, the balance of power between staff and management has remained constant, and the members have continued to dole out increasing amounts to fund the same system for more than a decade. Whether the current dispute results in a $90 dues increase or a $5 dues increase is largely academic, since it is virtually impossible for the members to take their business elsewhere. They can complain all they want, as loudly as they want, but if OEA quadruples the dues, they have to pay or they lose their jobs.
Jean-Baptiste Colbert, Louis XIV’s finance minister, famously said, “The art of taxation consists in so plucking the goose as to obtain the largest amount of feathers with the least possible amount of hissing.” The secret, it appears, is to ensure the goose is unaware it is being plucked.
