GILROY
– After making $6 million in budget cuts over the past three
years, giving teachers a 3 percent salary increase last year and
covering some increasing benefits costs, the Gilroy Unified School
District says the well has all but dried up.
GILROY – After making $6 million in budget cuts over the past three years, giving teachers a 3 percent salary increase last year and covering some increasing benefits costs, the Gilroy Unified School District says the well has all but dried up.
Faced with skyrocketing expenses, Gilroy Unified School District is working with its employees to figure out how to shoulder the costs. Teacher contract negotiations for the 2004-05 school year are set to begin next month.
Superintendent Edwin Diaz, in a board budget discussion Thursday, repeated statements he’s made over the past 18 months that the district cannot afford to continue to pick up the health and benefit increases.
“If we continue to have these increases, we’re going to have a situation that is out of control,” he told trustees.
At issue is an expected 18 percent price increase in the medical insurance plan used by more than half of the district’s certificated employees, a 580-member group that includes teachers and administrators. According to estimates from GUSD’s health and welfare benefits committee, another insurance plan’s premium costs will increase by 33 percent next year, and a third plan by 16 percent.
“This is our third year in double-digit health and welfare increases, and from the indications we have, there will be at least another three years of double-digit increases,” said Linda Piceno, assistant superintendent of human resources.
The district has not budgeted for higher insurance costs over the next two years or any pay raises over the yearly teacher pay increases for years of experience and education.
The Kaiser Permanente rate for a family of four, for example, will go from $763 to $903 per month, said Michelle Nelson, president of the Gilroy Teachers Association.
The committee is looking at an option that would decrease the cost to the district by between 2 and 5 percent.
“Really what we’re looking at is an increased co-pay for office visits, and/or increased co-pay for prescriptions,” Piceno said.
For example, the district could shave about 2 percent off the $1,809 monthly premium for a different family plan if employees pay an extra $5 for office visits and prescriptions, on top of the $5 they currently pay.
“Why would the employees agree to pay more out of pocket? It’s a lot more reasonable to expect someone to pay more for an office visit than to pay a couple hundred more a month for medical insurance, which is what it would cost,” Nelson said. “We’re trying not to cut the level of service, most people don’t want to cut that, so they’re willing to pay extra.”
The health and welfare benefits committee meets again Monday to discuss the higher co-pay option.
“We’re still exploring other options, but for right now it looks as if we’re almost there,” Nelson said. “The difficult part would be the negotiations: Who pays (the premium increase) – the district or the employees?”
Teacher contract negotiations will begin next month, earlier than usual. They normally start with the beginning of the school year.
“I believe both sides know the status of the budget and know the challenges that both the district and employees are facing related to compensation and increased health and welfare benefits, and at this time in the year, people are generally optimistic that we can come to a solution,” Diaz said. “But these are very, very difficult situations, and I hope that sense of goodwill stays as we continue to deal with the issues.”
“If we could do this all over vacation, that would be a good thing because nobody wants to go through what we went through at the beginning of last year,” Nelson said. “The employees picked up the increase, and that’s one of the reasons we went to impasse in negotiations.”
Meanwhile, Diaz said, other employees, from secretaries to management, already are covering the increased costs for this year’s benefits while teachers have theirs covered by the district. Diaz said picking up those employees’ insurance increases is a remote possibility.
“That would be my primary interest, but actually identifying funds to make that happen is a huge challenge,” he said.
The issue has arisen during several board meetings over the past few months, most recently Thursday night.
Board President Jaime Rosso likened the looming insurance increases to a train barreling down the tracks.
“We all know it’s coming, we’re just not projecting it out,” Rosso said. “I think we need to be more proactive with our public and make our case with our elected officials.”
“It’s amazing to me that (insurance companies) can keep doing this,” Trustee John Gurich said.
Another money-saving option that will probably be on the bargaining table is capping each insurance plan – single, couple, family – rather than covering the family rate for everyone.
“It may not totally solve the problem, but it would help contain costs in the future and would generate enough savings where we would help the district pick up the additional costs for health benefits,” Diaz said. “So in my mind, it’s taking some existing funds and re-allocating those funds.”
Let’s make a deal
Contract negotiations:
The Gilroy Unified School District begins contract negotiations with teachers next month. Last year, teachers received a 3 percent pay raise. Topping the list this year is assistance with increasing health
insurance costs.
Sticking points:
GUSD says there’s virtually nothing left in its budget, and little has been done to prepare for rising
premiums, which could see double-digit increases for the next three years.
Possible solutions:
GUSD’s health and welfare benefits committee is exploring a plan that would increase the co-pay for employees while keeping premiums down.
