Georgia school systems are bracing for another multimillion-dollar financial hit July 1, when the cost of insuring bus drivers and other traditionally low-paid school workers jumps for a second straight year by $1,800 per person.
For metro school systems alone, the extra costs will exceed $30 million, although at least one system is hoping to soften the blow to its bottom line.
Henry County Schools on Atlanta’s Southside is eliminating 280 custodians’ jobs effective June 30. The school district, which is the county’s largest employer, will instead hire a private company to clean its 50 schools and, thus, avoid paying at about $340,000 extra in higher insurance costs.
“It [the increase in employer contributions] was one of the main reasons, if not the main reason, we decided to outsource [the custodians’ jobs],” said Jeff Allie, Henry County’s assistant superintendent for financial services.
School systems are seeing their share of employee health insurance costs increase for the fiscal year that starts July 1. But by far the biggest increase — $150 a month, or $1,800 annually, per employee — is for insurance coverage for the thousands of school workers who perform essential but largely unglamorous jobs, such as driving school buses, cleaning the boys’ bathrooms and dishing up meals to hungry students and teachers.
In 2011, the state Department of Community Health announced that local school systems would be required to shoulder a greater share of the health insurance costs for nonteachers to be more in line with the systems' costs for teachers. Otherwise, the state's self-insurance program was said to be at risk of having a deficit of more than $800 million by 2014.
DCH immediately raised the employer costs for school systems by $50 a month per employee and announced three back-to-back annual increases of $1,800, the last of which takes effect July 1, 2014.
With the increase set to take effect next month, some districts are fast approaching the point where they are spending almost as much to insure some of their nonteachers as they are to pay them. For instance, Gwinnett County Public Schools, the state’s largest system, will be paying $10,098 a year as a starting salary for its school nutrition workers and $8,954 a year for their health care.
It’s a tough pill for school systems to swallow after the double whammy of years of budget cuts from the state and declines in local property taxes driven by the collapse of the national and local housing markets.
The increases in employer costs “are a contributing factor to the budget shortfalls that have led the school board to shorten the instructional calendar, increase class sizes and require furlough days of all employees,” Cherokee County School Superintendent Frank R. Petruzielo said.
The Cherokee County School District’s costs for insuring its nonteachers have risen from $2.9 million in 2008-2009 to $7.6 million this year, even though the district has cut 123 employees during that period. The district’s annual costs are forecast to jump to $10.1 million on July 1 and to $12.7 million for the following year, according to district data.
In Cobb County, where there are 3,000 nonteachers on staff, the newest increase will cost the district $5.4 million. The new costs total $11 million in Gwinnett County, $5.6 million in Fulton County, $5.4 million in Clayton County and $2.4 million in Forsyth County.
“That’s a lot of money we could be using to reduce class size, give teachers a raise or enhance learning through more field trips,” said David Waller, a school spokesman for Clayton.
In Atlanta Public Schools, spokesman Stephen Alford said the premium increases are tough on a district that’s facing a $60 million budget gap.
“We have to make some tough decisions,” he said.
In Henry County, even with custodians cut out of the equation, the higher premiums that kick in July 1 for other nonteachers will add $3.5 million to the school district’s costs, Allie said.
“That brings our total costs to $10 million [for insurance for nonteachers],” he said. “That’s very troubling and hard to manage, and there’s no state revenue to help.”
The custodians who are being let go have been interviewed by the private contractor for possible jobs, Allie said.
“I believe our current employees that agree to go to work for the private company will be employed as long as their job performance is satisfactory,” he said.
Allie said he believes officials in other districts may be looking at outsourcing jobs as an alternative. Some also have discussed an alternative to the state health care plan, though nothing comparable has been found, he said.
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