Surprises and Dodges from NEA’s Budget Hearing

The last official action taken by every National Education Association Representative Assembly is a voice vote on the national union’s budget. This year, of course, they won’t have that opportunity, so delegates will have to vote up or down using a mail-in ballot.

In preparation for that decision, NEA held a virtual hearing on its budget and took questions from delegates for more than an hour. Though many questions concerned the impact of COVID-19 on membership and finances, others were more wide-ranging.

Here are a few things we learned:

* Although the NEA Executive Committee feared the union would “incur millions in cancellation costs” because it wasn’t holding an in-person convention in Atlanta with thousands of delegates staying in a dozen local hotels, NEA lost only $3,000.

* In fact, canceling the convention led to a windfall of $5.3 million that would have been spent on the four-day event. Additionally, since no new business items will be submitted this year, NEA stands to save upwards of $1 million it would have spent carrying out those actions in 2020-21. The union plans to use the savings on COVID-19 mitigation efforts for affiliates.

* Other than increases in UniServ grants to state affiliates (driven by a formula), no other budget line-items were touched, not even employee compensation. Though the overall spending on salaries and benefits did not increase, the union’s three executive officers were all granted a 3.1 percent raise.

* One delegate asked if the money from “community allies” had helped to “compensate for dues dollars lost from fair share and lost members.”

NEA replied: “Clearly we have not signed up enough members to make for the Fair Share loss.”

That is an understatement. NEA signed up only 260 community allies, yielding $6,500. That’s slightly more than 0.1 percent of what the union lost in agency fees.

* NEA expects membership losses due to COVID-19 layoffs, but had good (?) news for members — if you’re laid off NEA will cut your dues in half. I’m not sure what benefit you get by paying NEA $100 if you’re not working in public education, especially since you can become a “community ally” for $25.

* One delegate asked: “Do we invest our money in the stock market and if so, how are those investments doing at this time?”

NEA responded: “We invest very conservatively in the stock market with very moderate returns.”

We should all wish for portfolios so conservative and with such moderate returns.

Naturally I don’t have NEA investment returns for 2020, but let’s compare 2018 and 2019.

In 2018, NEA held marketable securities with a value of $38.6 million. A year later, its marketable securities were worth $80.5 million.

They are conservative in the sense that there do not seem to be any high-risk investments of the kind that send you into a financial chasm that takes decades to climb out of. The largest chunks of NEA’s money are invested in a handful of exchange-traded funds and market index funds.

* The final question was an obvious one: “What happens if the budget does not pass?” But the answer was a surprise to myself and several delegates.

“If the mail ballot on the budget fails, it would fall to the NEA (board of directors) to adopt the budget,” NEA replied.

Now let me say there isn’t a chance in hell the delegates are going to reject the budget. They never have in the past, and hardly make a peep about it when it comes time to vote in a normal year. Still, it was a bit of a shock to discover that it really wouldn’t matter much if they did reject it. So there was a follow-up question.

“If it goes to the board of directors what happens? Does the board just veto it or will they be able to make changes and send it back?”

Not really. “The (board) would need to modify the budget to address concerns and put a balanced budget in place for NEA,” the union replied.

Um, but there is no mandate for the board to “address concerns.” They could just as well adopt the budget as presented, overriding the will of the Representative Assembly. So there was another follow-up question.

“If the budget does not pass and the executive board approves it, can the general membership or delegates challenge that decision?”

Too bad, so sad. “The delegates to the 2021 (Representative Assembly) could review and modify the (board’s) decision for the second year of the budget (2021-22),” said NEA.

But wouldn’t that budget be subject to the same process? Oh well, at least we know who really has the keys to the safe.