Intercepts
A listening post monitoring public education and teachers’ unions.

The Internal Revenue Service published a list of 275,000 nonprofit organizations that have lost their tax-exempt status due to a failure to file the required paperwork for at least three years. Hundreds of these organizations are local affiliates of the National Education Association and the American Federation of Teachers.

The Newark Star-Ledger reports at least 39 local chapters of the New Jersey Education Association are on the list. A union spokesman said they may be defunct, merged or delinquent with paperwork. NJEA “is currently trying to determine the status of each one.”

EIA reported last August that 475 teacher union affiliates were in danger of losing their status, and posted a list of them, culled from the 340,000 nonprofits on the IRS roster. I know for certain at least one state affiliate used the information to clear up the problem.

Remember the Indiana State Teachers Association health care trust meltdown? The $67 million deficit led to the forced retirement of the executive director, an NEA trusteeship, and a slew of lawsuits, both by and against the union.

ISTA sued UBS Financial Services, claiming the firm sold “unsuitable investments” to the trust. We now learn that a settlement was reached three weeks ago, the only public details of which are that “UBS has undertaken to purchase from ISTA a number of the Funds and to otherwise take steps to provide liquidity to ISTA.”

UBS was also sued by the state of Indiana, and as part of a separate settlement will pay a $450,000 fine plus $227,000 in investigative costs to the state securities division.

“We’re glad to see a resolution to this part of an ongoing investigation into other violations related to the troubles surrounding ISTA,” said Indiana Secretary of State Charlie White. “We will continue to peel away each layer of this case until we have done all we can to account for the losses incurred.”

The union and the state have agreed to hold the UBS funds for 60 days while they “work to properly designate the distribution of the relief funds.”

The secretary’s web site has an entire page devoted to the ISTA litigation.

This has happened so often over the past few years that it almost doesn’t qualify as news anymore. Still, probably the most important change in the education policy landscape has been the willingness of high-profile Democratic politicians to buck one of the primary sources of their power – the public employees’ unions. This doesn’t always end happily for the Democrat (see Gray Davis, et al.), but it’s no longer the career-ender it used to be.

In Oregon, the school employees’ unions have had an on-again, off-again relationship with Gov. John Kitzhaber. The Oregon Education Association endorsed his opponent in the Democratic primary, largely because of Kitzhaber’s “performance-based funding” proposal. When Kitzhaber won the nomination, OEA and other public sector unions bet the ranch on him.

Gov. Kitzhaber’s latest proposal is a merger of the state boards dealing with K-12 and higher education, which has caused OEA some heartburn. “I am surprised and disappointed to hear that OEA has changed course and now opposes Senate Bill 909 and a package of modest education reforms that would deliver better results for students, more resources for teachers and more accountability for taxpayer dollars. For them to cling to the status quo is not in the best interest of Oregonians,” said Kitzhaber in a statement.

Meanwhile in California, David Kieffer, the executive director of the state SEIU affiliate announced his opposition to Gov. Jerry Brown’s plan for a special election in September to extend and raise taxes. The state’s public sector unions are interested parties because they would be expected to fund the campaign with dues dollars.

“I think it’s highly likely (the taxes) would lose,” Kieffer said.

Kieffer’s short-term solution? Paper over the deficit. “There’s a bottomless pit of gimmicks,” he said.

Democrats are in a bind. They can’t tell the unions to go to hell, and they can’t follow them off the cliff. But the fence they’re straddling is getting awfully thin.

From yesterday’s In These Times:

The attack on workers’ rights in Wisconsin has proven to be a training ground for activists in a lot of ways that are going to pay long-term benefits for activism in the state. Unions stripped of their ability to automatically deduct dues from workers’ pay checks have started training activists and shop stewards to collect dues individually from workers each month. Collecting dues individually from workers is a process that involves hundreds, thousands of activists. (emphasis added)

Every so often the press prints one of those stories about how x percentage of American students don’t know when the Civil War was fought or how many amendments there are in the Bill of Rights. I’ve often complained of our failure to educate the public about fundamental education facts – not policy positions, but things like per-pupil spending or charter schools.

One might think that most people are practicing selective ignorance – that is, concentrating on things that are important in their everyday lives. Knowing about the Berlin Wall won’t get the bills paid, the argument goes.

Except it turns out there are a lot of folks who don’t know much about their own lives, either. The Wall Street Journal discusses a report by the National Bureau of Economic Research that reveals most Americans haven’t planned for retirement. That’s worth discussing on its own, but other factoids were even more alarming:

* When given a basic list of questions on economics and finance in everyday life, less than 10% of respondents are able to answer all questions correctly.

* When asked how much of their portfolios were invested in stocks or mutual funds that contained stocks, 17% didn’t know the answer to the question. When respondents were asked wither their retirement savings were invested primarily in a target-date fund, 37% said they didn’t know the answer.

* Only 21% to 25% of respondents said they have used information sent to them from Social Security.

* Some 12% of those surveyed didn’t know what their down payment on their home was. Two percent didn’t know what type of mortgage they had. And 10% of mortgage borrowers said they didn’t know the interest rate they were paying on their mortgagee.

* About 20% of consumers surveyed who had auto loans didn’t know the interest rate they pay. Of the 46% of credit-card holders who carry a balance, 12% didn’t know the interest rate on the card in their wallet with the largest balance.

It has been said that you get the government you deserve. Since so many people don’t know where their own money is going, it’s only natural that their government should follow their lead.

Click here to read:

1) Declassified Union Financial Documents from California, Illinois and Oregon

2) Last Week’s Intercepts

3) Quote of the Week

Last Wednesday, the Boston Globe was concerned about the unionization of Cape Cod Lighthouse Charter School. Columnist Scot Lehigh noted this was the second charter organized by AFT Massachusetts, the other being the Conservatory Lab Charter School. He wrote:

There would seem to be, then, a gigantic clash of cultures here. Certainly if the charters’ performance suffers as a result of having unionized, AFT Mass’s organizing victories will prove pyrrhic ones. In fairness, that hasn’t happened at the Conservatory Lab, at least not yet.

It’s true that poor academic performance at a unionized charter would affect organizing, but it’s much more detrimental for the teachers at a unionized charter to boot the union out. This morning’s Globe tells the tale of dissatisfaction with the union at Conservatory Lab, and a likely vote to end the relationship.

I refer you to this post for my outlook on unions organizing charters. Neither side should get too excited until the unionization rate exceeds the rate of establishment of new charters – that is, when the union increases market share. Win a few, lose a few, will probably be the pattern for the foreseeable future.