Lawmakers open their first budget hearings of the 2016 session on Tuesday in a good mood, secure in the knowledge that the troubled days of the Great Recession are long past and that Gov. Nathan Deal is recommending a big boost in school funding.
Deal announced 3 percent pay raises last week, the largest state-funded increases teachers have seen since before the Great Recession.
What he didn’t mention is that the bill for health insurance for noncertified employees such as bus drivers and cafeteria workers is going up again, likely costing school districts almost $61 million annually if the increase is approved by lawmakers.
That comes on top of a $100 million increase for districts this year to pay for coverage for more than 20,000 part-time school workers and their dependents. Deal had proposed to cut insurance for those part-time school employees, even though part-time state legislators are covered by the State Health Benefit Plan.
Lawmakers agreed to keep those noncertified employees covered, but only if local school districts picked up the tab.
The new monthly “employer” rate — $846.20 to keep noncertified employees on the State Health Benefit Plan — is close to what some earn for driving school buses.
Teresa MacCartney, the governor’s budget director, said the latest increase is part of a multiyear effort to keep the SHBP solvent.
“The increase in employer premiums for noncertificated school employees is to ensure that the State Health Benefit Plan has sufficient revenue to cover the health care costs incurred by its members and to keep premiums for teachers and state employees affordable,” she said.
But it may also revive last year’s debate over raising rates or eliminating health insurance for employees who, in some cases, are not particularly well paid.
“We cannot continue to put this additional burden on low-wage school bus drivers who can ill afford it and on local school systems who are working to pull themselves up from years of cuts from the state,” said state Senate Minority Leader Steve Henson, D-Tucker.
John Palmer, a Cobb County school band director and spokesman for the teacher and state employee group TRAGIC, said, “If this cost is passed along to the local districts, it will erase the increase in funds for this year, forcing districts to continue to grapple with furloughs and higher class sizes, despite the governor’s proclamation that furloughs should be a ‘thing of the past.’
“The governor can claim he is supporting education, but his budget says differently. Words are empty if you give with one hand and take with the other.”
Health insurance is not an insignificant cost to school districts, or any government or private business that offers it. For instance, Sloan Roach of Gwinnett County Public Schools said that if the governor’s latest proposed increase is passed on to districts, the annual cost to her system would be about $7.2 million.
One local bus driver said her district is hiring “permanent substitutes” to avoid paying health insurance.
Local systems are funded by a combination of state allocations and property taxes.
While costs are rising, state officials say the 200,000 or so state employees and teachers who pay into the State Health Benefit Plan have long subsidized coverage for noncertified employees — such as bookkeepers and janitors.
While the SHBP has been in good financial shape the past few years, the Department of Community Health said in August that it could amass a $42 million shortfall in 2016-2017 and a nearly $301 million deficit the next year.
That could mean higher premiums for some members or changes in the health benefits for all of those on the plan.
Employee health insurance is just one of hundreds of issues lawmakers will face when they start working on Deal’s proposed $23.7 billion budget proposal for fiscal 2017, which begins July 1.
The governor will open the hearings Tuesday with an address to the joint House and Senate budget committees. He is expected to emphasize the changes he has championed in the criminal justice system, most notably his efforts to better educate and prepare inmates to succeed once they get out of prison.
Deal has several initiatives in his budget recommendations aimed at doing just that.
Lawmakers will also get economic projections for the upcoming year from the state’s fiscal economist and hear from the heads of some of the state’s biggest agencies, including the Department of Education, Board of Regents and Department of Community Health.
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