Union Pension Battle Looks a Little Different on the Other Coast

I’ve spent a lot of time on the problems with the NYSUT pension fund. The California Teachers Association is on the opposite end of the spectrum when it comes to overall financial health. CTA is loaded, but it still has some issues with staff retirement costs.

The union’s pension fund is in the “red zone,” meaning it is not funded up to the 80 percent level. CTA management and staff entered into negotiations to fix the problem, and the staff proposed a diversion of some contributions from employee 401k accounts to the defined benefit pension plan for a period of 10 years.

The staff union is now complaining that CTA management wants to make that shift permanent, which it thinks is unnecessary. Additionally, CTA proposed that pensions be based on an employee’s highest annual earnings. The current contract bases it on the highest amount earned in a month. As you can imagine, one particularly busy month late in an employee’s career, say during a political campaign, could lead to a spike in overtime and holiday work, culminating in a pension boon that lasts a lifetime.

This, plus foot-dragging in negotiations, has led to some discord between CTA managers and staff. However, it doesn’t rise to the level of a crisis, because the pie is so large everyone is sure to get his fill in the end. The staff contract does not expire until August 31, so there is still plenty of time to settle.

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NYSUT Can’t Keep Its Stories Straight

Last week’s story on the faulty finances of New York State United Teachers is causing a ruckus, and it nudged me to examine a different aspect of the story: the timeline.

One would expect NYSUT to put the best face possible on its situation, but the jumping from one extreme to the other and the citing of wildly divergent numbers needs to be set in stone.

Let’s begin with NYSUT’s Form 990, which every tax-exempt organization is required to file annually with the IRS. The most recent one available covers the period September 2014-August 2015. It shows NYSUT with an $18.9 million deficit. It was signed on January 13, 2016 by Martin Messner, NYSUT’s secretary-treasurer.

Three months later, Messner addressed the delegates of the NYSUT representative assembly and told them the union had recorded its “second surplus in a row.” (at the 1:55 mark) He also stated that NYSUT pension fund was 86 percent funded. (at the 2:20 mark) Messner did not address the costs of post-retirement health care.

Less than four months later, NYSUT sent a letter to local affiliate presidents with quite a different story. Though the date on the letter is July 26, 2015, it was actually sent on that date in 2016, as the contents of the letter will confirm. The key details are:

In January of 2016, the NYSUT officers were notified of a looming pension spike for the NYSUT pension system that was extremely high. In late April of 2016, we received a second report from our actuary that was even more damaging and the numbers have reached a point that absent action they could jeopardize the entire organization.

Messner did not inform the delegates of the “looming pension spike” NYSUT was warned about in January, and his rosy forecast for the pension system somehow came crashing down only three weeks after his speech.

The local presidents were advised, “This situation is a delicate one and we are asking that you refrain from commenting or having discussion on social media.”

Then the clear warning, “However, this is no short term storm. If we change nothing, our reserves could be depleted in as little as five years.”

Michael Lillis is a candidate for the NYSUT presidency, and he told New York City education blogger Norm Scott that his caucus is “aware of the uncertain economic situation within NYSUT, and we have grave concerns that if not addressed properly, this house of cards could come tumbling down, leaving members vulnerable to the worst of the political winds out there.”

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Syracuse Teachers Association President Impeached

The Syracuse Teachers Association representative assembly impeached president Karen Fruscello on Wednesday. Details of the proceeding were not released.

According to published reports, Fruscello’s main transgression was ordering an audit and investigation without board approval after learning another STA officer was visiting pornographic web sites on the office computer. If that seems a slim reed upon which to base an impeachment, well, that’s all we know.

The STA representative assembly, composed of union officers and building stewards, was provided with information to which we were not, so I am inclined to give them the benefit of the doubt. It does seem, however, that it is getting awfully easy to remove democratically elected presidents of AFT locals.

It happened in Detroit, Palm Beach County (FL), Orange County (FL), Oregon, Dearborn (MI) and now we have the NYSUT president being eased out. None of these ousters, it should be noted, involved mismanagement of funds or other criminal offenses that would normally be the trigger for extreme measures.

It’s good to be emperor, but it’s still wise to keep your eye on the Praetorian Guard.

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NEA “Sequesters” $10 Million For Use in State Battles

Each active member of the National Education Association contributes $20 annually to the union’s special funds. Twelve dollars of this is deposited in the Ballot Measures/Legislative Crises Fund, which is used to support the union agenda at the state level.

Unused money rolls over year after year, and NEA projects it will have about $77 million available for 2017-18. Any large contribution requires the authorization of the union’s board of directors, but the board recently approved a $10 million “sequester” from the fund.

The use of the word isn’t entirely clear, but I believe it allows the nine-member NEA Executive Committee to send up to $10 million from the fund anywhere it chooses without further authorization from the board, which meets only five times a year – and one of those meetings is virtual.

NEA affiliates have already faced legislative crises in the form of right-to-work or collective bargaining legislation in Kentucky, Missouri, New Hampshire and Iowa, and lost three of those battles. I don’t know if other state legislatures are planning similar challenges to the union’s clout, but they can expect an immediate flood of opposition money if they do.

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Mulgrew Denies Everything

Three weeks ago I wrote a detailed column on the finances of New York State United Teachers and its New York City affiliate, the United Federation of Teachers.

Of all the sentences in that column, this one above all others seems to have struck a nerve:

UFT owes NYSUT almost $11 million for back dues, and $4 million of that is 90 to 180 days past due.

Last night the UFT executive board met, and UFT president Michael Mulgrew said this (paraphrased by a board member who attended):

Says there is fake news about UFT being two months behind on dues. Says we are never behind on dues. In January city collects them and we don’t get them until March. We’ve always been on time. We have solidified financial shape of union. People who’d hurt us start investigations that we pay for.

I’ll allow that my use of the present tense in my sentence cannot account for events more recent than the 2016 documents I have. So it is entirely possible that UFT has since paid its dues to NYSUT.

The assertion that UFT is “never behind on dues” and is always on time is simply inaccurate. And Mulgrew’s explanation for the dues transmittal delay doesn’t jibe with NYSUT’s disclosure report, or UFT’s own.

This is NYSUT’s accounts receivable aging schedule as of August 31, 2016. Work your way about two-thirds down and you’ll see UFT owed $10,536,056, of which $4,095,514 was 90-180 days past due. That is, it was due somewhere in between the end of February and the end of May, but had not yet been paid by the end of August.

UFT’s own liabilities schedule, from July 31, shows almost the same amount owed as “per capita dues payable.”

If Mulgrew wants to paint late dues payments as unimportant, that’s his prerogative. But he looks foolish when he calls official information from his own union and his parent union “fake news.”

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New Delaware State Education Association President Was Struggling Blogger

The recent election for president of the Delaware State Education Association was unusual in a couple of ways. First, DSEA is one of the few NEA state affiliates that holds a rank-and-file vote for its executive officers, and second, the election ended in a tie between incumbent vice president Karen Crouse and former president of the Red Clay Education Association Mike Matthews.

In another way, the DSEA election was very much like other union elections in that turnout was less than 20 percent. Crouse and Matthews each received 862 votes in a four-way race.

A runoff was held, turnout increased to just over 20 percent, and Matthews emerged the victor by 119 votes.

Matthews will be an unusual state union president. His politics are predictably liberal, but he leaves a long Internet trail thanks to his prolific blogging in the last decade.

He launched his personal site – Down With Absolutes! – in 2004. “It was my take on how much I hated George W. Bush and how I would do anything to ensure he wasn’t re-elected in November,” he wrote.

Matthews majored in journalism at Temple University, but discovered “though I still loved to write, I didn’t want to have to write at the whim of some editor at a mid-circulation newspaper where I’d make no money. I took a temporary position with a substitute teacher service, where I am presently employed.”

He got his Master’s in Elementary Education from Wilmington College in May 2007, but as of September 2008 “I still don’t have a teaching job!”

Matthews shut down his blog in July 2009 because “I realized I have spent far too much time on this and have reaped far too little financial gain,” he wrote. “I decided DWA would take a backseat to my job hunt.”

He left to the generally good wishes of his readers, with the notable exception of commenter “buddy,” who wrote “You’re an egotistical moron. Here’s to continued failure, a**hole.”

It’s safe to say Matthews has the last laugh on “buddy,” and we look forward to observing whether his blogging experience ends up being a help or a hindrance in the big league of Delaware politics.

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