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Health costs still loom for district

Teachers contract solves this year's crisis, but critics say it evades the biggest issue

Portland school district leaders took the city's money and they Ñ along with city and county leaders Ñ bought labor peace with it.

But critics of the district's tentative contract with its teachers union this week say the deal defers until the next contract any real attempts to manage spiraling employee health insurance costs and teacher assignment and transfer issues.

And critics contend that the failure to more directly deal with the insurance costs, especially, could influence attempts during the next couple of months to increase local business and other taxes to give revenue to schools.

'We got beat,' one district negotiator, who asked to remain anonymous, said of the tentative deal reached at City Hall late Tuesday. 'We lost big-time.'

A major factor in the agreement was the city's promise to provide the district with $14 million or so this year from increased business taxes to help retain a full school year. This came after district leaders had proposed cutting 24 days to deal with a multimillion-dollar budget deficit.

But the city money was contingent on the two sides reaching an agreement. And at least one school district negotiator said that condition put more pressure on the district to settle than on the union.

'Clearly it did,' said Portland school board member and district negotiator Sue Hagmeier. 'Because just look at the results. One side sure got more than the other.'

Teachers union president Ann Nice said that while the tentative agreement could be called 'a minor victory' for teachers, 'I don't think in most places you'd think it was a success by keeping what you had and taking a five percent pay cut.'

Nice was referring to union leaders' unusual offer, which remains in the tentative contract, to have teachers work 10 days for free this year.

But local business leaders had said that district control of its spiraling health care costs was necessary for them to support increased local business taxes for schools.

Many business leaders have been supportive of some increased taxes for schools, said Tony Larson, head of a citizens committee that reviews the district budget and a member of the Portland Business Alliance. 'But I think as more information (about the tentative contract) comes out, I think you'll see that support erode.'

Teachers and union leaders have said capping health care costs would have punished teachers whose total compensation packages aren't anywhere near lavish; the relatively good health care benefits come with teacher salaries that have sunk to among the lowest in the metropolitan area, teachers say.

Still, district leaders had hoped that a $600 monthly cap on what the district pays per teacher for health insurance Ñ it pays almost $800 per month per teacher now Ñ would help the district save more than $10 million next year.

According to a preliminary budget document, the district expects a budget shortfall next year of $68 million.

'That $10 million dollars has to be made up other places in the budget,' Larson said.

Committee gets tall order

The tentative teacher contract, which teachers will vote on today and which would run through June of next year, does not have a health care cap but calls for an advisory committee of two union leaders, two district leaders and a city appointee and county appointee to study and recommend by Oct. 31 ways the district could create a compensation package 'that reduces (the) cost of benefits and increases teacher salaries.' The district and union could then reach an agreement on the provisions that would become part of the contract.

City Commissioner Randy Leonard, who with Portland Mayor Vera Katz and Multnomah County Chairwoman Diane Linn helped broker the deal, said 'neither side's happy' with the health care provision in the tentative contract. 'It forced the union to be on a path of health care reform and cost containment measures that they didn't want to be on, and it doesn't give the district the specific cap they wanted.'

'It's not a matter of a cap or no cap,' said Linn, responding to critics who contend the agreement won't control health insurance costs. 'It's a matter of setting up a collaboration that results in lower costs.'

But Hagmeier questioned whether the provision would put the district on any path toward containment of health care costs. 'Considering the incentives in the current contract not to solve the problem, I think what's facing the committee is pretty daunting. I don't really have much hope that they can' change the health benefits structure in the tentative contract.

Hiring, assignments an issue

Another major issue for district officials were some nonfinancial changes they wanted in the teachers contract Ñ including changes in how teachers are hired and assigned to schools. Teachers said they would strike over the suggested changes; district leaders continued to push for them, saying they were important to keep good teachers Ñ and get experienced teachers Ñ into the city's poorest schools.

In the end, the tentative agreement, which was announced an hour after teachers voted to strike, called only for the city and county to 'facilitate such discussions' if either side wanted to talk about the teacher transfer issue.

'I am disappointed,' Hagmeier said. 'I think we needed that to continue to promote student achievement in an equitable fashion in the district.'

Ron Herndon, a longtime advocate for better education for poor and minority children in the district, said the district could improve education in poorer schools without changes in the teachers' contract and said he always considered the district's proposal to change the transfer language a 'loss leader' that district leaders would negotiate away in the end.

But he also said the teachers union won much more of what it wanted in the tentative settlement.

'I applaud the teachers union, because once again they've shown that with this board, having a genteel discussion doesn't work. You have to threaten chaos to get any movement. Anything other than threatened chaos, this board and this city doesn't move.'

Contact Todd Murphy at This email address is being protected from spambots. You need JavaScript enabled to view it. .