Wednesday, September 30, 2009

Where's the MEA?

As GM, Ford, and Chrysler melted down their unions recognized the crisis and engaged in the unpleasant task of dealing with economic reality. To save their industry, and their own member’s jobs, union leaders renegotiated salaries, benefits, and work rules. Members then voted to approve these changes. None of this was easy or particularly pleasant, but it was necessary. Marking this effort was the realistic engagement by UAW leadership; precisely the type of realistic engagement missing from the MEA.

So where is the MEA? Apparently in denial of the facts driving Michigan’s economic depression. Tax revenues are dramatically and permanently down, unemployment has jumped to over 15%, the highest in the nation. We continue to hemorrhage jobs. Any turn around will be a long time in arriving. Recognizing this, Oakland County has frozen salaries and cut pay to deal with declining revenues. This creates STRUCTURAL CHANGE that will save jobs, preserve services, and balance the budget in the face of long term revenue loss. To quote Deputy County Executive Bob Daddow “the county won't recover to 2009 financial levels until the year 2020 or 2025.” That’s from the most economically affluent county in the State!

Eighty-five to ninety percent (85% -- 90%) of a typical school operating budget is consumed by salaries and benefits; there is NO OTHER line item which exerts a bigger push on budgets. Michigan’s education budget exceeds $13 billion annually, it is the single largest budget item. While not 90%, a majority of that budget is dedicated to salaries and benefits. Very small changes to existing contracts (perhaps as little as 1%), adjustments to steps and lanes, and minor changes to benefit programs could reap hundreds of millions in cost savings. Small structural change would stabilize operating budgets for years.

Is the MEA living in an alternate reality which exempts them from this financial crisis? Unbridled support of the MEA’s money pot, MESSA, seems to support that notion. The advertised claim is that MESSA has saved Michigan money. Here is the inconvenient truth: MESSA is the single most EXPENSIVE health care option forced on Michigan schools, a fact supported by the Hay (see chart from report here). The MEA’s claim is akin to saying Governor Granholm is “saving” taxpayer money by buying a Bentley instead of a Rolls Royce to chauffeur her to and from work. The claim may be “true” but the statement, in context, is absurd.

The MEA needs to take a page from the UAW and support their local units in opening contracts for job saving adjustments. The MEA can accept that revenues are permanently down and will not rebound for years. The MEA can act to save member jobs and preserve programs for school children. Of course, the MEA can opt to demand a larger share of an ever shrinking pie. My hope is that the MEA chooses the path of economic reality as the UAW did; if they do, we will all be better off in the long run.

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