Benefits a big bump in the road
Coeur d'Alene Press | UPDATED 12 years, 1 month AGO
Coeur d'Alene School District's journey into possibly privatizing its transportation department is more about benefits than buses.
In fact, don't be surprised if employee benefits become an increasingly attractive target for a host of public entities that, like Coeur d'Alene schools, must figure out how to deal with big budget challenges.
About those buses. The district's initial analysis suggests that $1.1 million a year might be saved by handing the transportation keys to a private company. Roughly $500,000 of the savings would come from the district eliminating the need to purchase a half dozen buses every year to replace those that must be retired from the fleet. But bigger savings would come from employee benefits.
The district's transportation department employs 71 people. This year, benefits for those 71 cost $646,000, district financial records show, with $446,000 going to health insurance alone. What's rubbing some taxpayers the wrong way isn't just the sticker price on those benefits: It's the fact that district employees need work only 20 hours a week to qualify for the full benefits package.
Formal proposals from transportation companies eager to bid on Coeur d'Alene's services are needed before all the pros and cons of privatization can be weighed. But if you're wondering why the teachers' union is eager to have a dog chasing these buses - and it is, as witnessed by union officials' comments during a recent public meeting on the matter - "benefits" is likely the magic word.
Union leaders see what's ahead. Needing to pare somewhere between $2.5 million and $3 million from the budget, let alone construct a desperately needed supplemental levy of millions more just to make the most basic ends meet, Coeur d'Alene's school board and administration must scour every expense and weigh its importance in delivering quality education. The district's investment in benefits will be impossible to ignore.
Coeur d'Alene Schools' budget is $57.2 million. Of that, more than $12 million goes to employee benefits - health insurance ($6 million) and retirement ($4 million) comprising the lion's share. All told, 22.6 percent of Coeur d'Alene School District's general fund is devoted to employee benefits.
Last year, The Press published a comprehensive study including a full-page chart comparing pay and benefits between the public and private sectors locally. There was no clear-cut favorite on pay, but the public sector's benefits dwarfed the private sector's. Just this month, The Press published stories outlining the extremely generous benefits packages being extended to city of Coeur d'Alene managers who will be retiring. Keep in mind that one of the biggest public sector benefits - large accruals of vacation and sick time - isn't usually counted in the benefits category; it's counted as pay. Add that to the benefits discussion and the scales tip even more in favor of the public sector.
Something is going to have to give. Massive layoffs would seriously damage the school district or most other public entities because of their widespread impact on the local economy, so that's not an easy option. Because most public entities' heaviest investment is in personnel, that doesn't leave much else to cut.
And that's why benefits are about to be scrutinized like never before.