- Associated Press - Sunday, January 31, 2016

PLEASANTVILLE, N.J. (AP) - A state law requiring public employees to pay a percentage of their health benefit premiums expired last year, setting the stage for a battle over benefits between school boards and teachers unions.

At issue is whether school boards will be able to maintain those payments during contract negotiations or whether the unions will have the clout to roll them back, The Press of Atlantic City reported (http://bit.ly/1VzcpFT).

At stake are millions of dollars that ultimately would be passed on to local taxpayers. Statewide, school districts budgeted almost $4 billion for all employee benefits for the 2015-16 school year.

That represents almost 18 percent of all state aid and local taxes spent on education.

Steve Baker, director of communications for the New Jersey Education Association, wrote in an email that they expect many local unions will make the payment an important part of their negotiations.

“Different locals will pursue different strategies, but I think you should expect to see that issue raised in nearly all negotiations once the sunset is reached,” Baker said.

The New Jersey School Boards Association is advising members to expect that request. In a November memo, NJSBA manager of labor relations Patrick Duncan noted that in the last year prior to the law, only 13 percent of contracts analyzed by the NJSBA required any employee contribution.

In October, school board members attending a legislative panel at the NJSBA convention in Atlantic City asked legislators to consider extending the law and making the payments permanent.

But Senate President Steve Sweeney, D-Salem, Gloucester, Cumberland, made it clear the Legislature had taken the first steps to requiring employee contributions, but now it was up to local school boards to hold the line.

“We did it for four years,” he told board members, citing the phase-in period of the payments under the law. “But (unions) have a right to collective bargaining. They are entitled to negotiate benefits again.”

Sen. Jim Whelan, D-Atlantic, a retired Atlantic City teacher who was on the panel, said considering the state had not kept its promise to make pension payments, the Legislature is not going to renege on the rest of the deal. But, he said, he does not see a return to employees making no payment.

“It is not going back to zero,” he said. “(School boards) are still in a better negotiating position.”

The 2010 pension and benefits reform law, known as Chapter 78, requires employees to pay a percentage of their premium cost, ranging from 3 percent to 35 percent based on their salary. The phased-in payments started in 2011-12, and depending on when individual contracts expire, some districts could begin renegotiating the payment starting with contracts that ended June 30, 2015.

School employees have argued that with negotiated raises averaging about 2.5 percent over the past few years, the addition of the benefits payment has resulted in an overall reduction in pay.

Lynn Strickland, executive director of the Garden State Coalition of Schools, said school board members are very concerned about maintaining the payments at their current level.

“There is a concern about a domino theory, that if a few school boards roll back the payments, they will all start to fall,” she said.

While each district negotiates separately, most look to patterns from neighboring districts. State mediators will also compare offers with neighboring districts.

Meanwhile, the overall cost of benefits continues to rise. School district budget data show that even with the employees paying a share of premiums, benefits costs have risen annually in almost every district in the state.

The recommended 2016 premium cost increase for districts in the state School Employees Health Benefits Program, used by half of all districts, was an average 7.5 percent, but some plans rose as much as almost 12 percent. Egg Harbor Township officials said recently they are anticipating a 12 percent increase in benefits costs in the next budget.

The 2015 state Taxpayer Guide to Education Spending shows that total benefits, which also include any employer-paid pension and perks such as tuition reimbursements, make up almost a third of the total cost of salaries and benefits, though the percentage varies by district.

Health benefit costs are exempt from the 2 percent cap on increases to the local property-tax levy. But the impact on the tax levy is still a concern.

“Districts have so little control over the benefits costs,” Strickland said. “But if money is going to benefits, then it is not getting to the kids in the classroom.”

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