I will protect your pensions. Nothing about your pension is going to change when I am governor. - Chris Christie, "An Open Letter to the Teachers of NJ" October, 2009

Thursday, April 1, 2010

Did I just crack the code on the 1.5% deal?

So I've made a big mistake over the last several days: relying on reports from the Star-Ledger to try to understand legislation - specifically, S3, the bill that gets school employees to pay 1.5% of their salaries to their health care. I should have gone right to the source:
...Commencing on the effective date of P.L. ,
2 c. (pending before the Legislature as this bill) and upon the
3 expiration of any applicable binding collective negotiations
4 agreement in force on that effective date, the amount of the
5 contribution required pursuant to paragraph (1) of this subsection
6 by State employees and employees of an independent State
7 authority, board, commission, corporation, agency, or organization
8 for whom there is a majority representative for collective
9 negotiations purposes shall be 1.5% of base salary...
Uh, wha, huh? You mean this doesn't go into effect until a local teachers union contract expires? 

Well, that puts this into a different light, doesn't it?
Teachers who have new contracts by May 22 will not have to contribute 1.5 percent of their pay toward their health benefits, at least for the 2010-11 school year, a memo the state Department of Education sent to school district administrators last week states.
This isn't about "revised" contracts, as the Star-Ledger reported; this is about contracts that are being negotiated right now. The 1.5% contribution to health benefits won't be enforced until a new contract is agreed to AFTER the day the bill goes into effect (May 22, but I read that in the paper, so it's probably wrong as well...).

Three takeaways:

1) When Bret Schundler gave did his little "back of the envelope" presentation for the APP, he said if everyone working in the schools kicked in 1.5% for health care, it would generate about $200 million. FAIL! Only the folks working under contracts executed after 5/22/10 would kick in 1.5%! He's counting on savings that will not materialize this year! Most teacher's contracts are for 3 years; at best, he could count on maybe 1/3 of that money this year. Except...

2) This memo the Press of AC reports on gives a HUGE incentive to the local unions to get contracts signed by 5/22/10 - if they don't, they get hit with the 1.5%. But it's also a HUGE incentive to get the school boards to hold off if they can, because when that 1.5% kicks in, the teachers will have little choice but to pay.

I'd be prepared to say that this was a Machiavellian ploy by Christie, but I don't think so - I think he is just throwing stuff out there and hoping for the best.

3) If a union opens up their contract and gives wage concessions, just like Christie wants, do they open themselves up to having to pay the 1.5% before their current contract expires? Will they be hit twice?

This is why you actually take some time and work out details and bring parties together to negotiate in good faith. This is why Christie, if he continues down this path, is going to go down as a worse governor than even McGreevey.

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