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CONTACT:        Frank Belluscio (fbelluscio@njsba.org)                                                     FOR IMMEDIATE RELEASE
                        Mike Yaple (myaple@njsba.org)
                        (609) 278-5202

Health Benefits Remain Dominant Issue in Teacher Contracts
Negotiations Continue in More than 100 School Districts

TRENTON, August 24, 2005—Health benefit cost-controls remain a major factor in teacher contract negotiations as the new school year approaches, the New Jersey School Boards Association reported today.  The Association estimates that more than 100 school districts are still in negotiations for 2005-06—a situation, it says, is not unusual.

A total of 199 school districts returned to the bargaining table this year.  Among those that have settled, health insurance remains a dominant issue.

“So far, 52% of this year’s new contracts contain clauses aimed at controlling the cost of health benefits,” said Edwina M. Lee, NJSBA executive director.  “It’s an important consideration in collective bargaining; health benefit costs have been the fastest rising area of employee compensation in New Jersey school districts.”

The trend corresponds to the increases in health insurance premium costs that have outstripped inflation.  For example, from 2002 to 2005, traditional major-medical premiums for the New Jersey State Health Benefits Program—the largest health care insurer in New Jersey's school districts—increased by approximately 40%.

According to NJSBA data, a frequent cost-containment provision involves changing a school district’s basic coverage from a traditional major-medical plan to a managed-care program.  In some of these instances, employees may still receive traditional coverage by paying a differential.  Other cost controls include increased deductibles and tiered benefits (such as placing new employees in managed-care programs).  Many contracts also reflect increased co-payments for prescription plans—particularly when the prescription involves medications not on the insurer’s approved list.

Still in Negotiations  This year, 199 of the state’s 593 operating school districts have been negotiating new teacher contracts. Of those, NJSBA estimates that more than 100 are still at the bargaining table.  Last year, the Association reported that 105 of the 196 districts negotiating new agreements were still negotiating as of September 1.

“Each year, school reopens with 100 to 150 school districts still at the bargaining table,” Lee explained. “So, the large number of school boards that remain in negotiations should not signal alarm to parents and students; the status of contract negotiations should not affect school openings.

“Teachers in New Jersey never work ‘without a contract,’” Lee continued.  “Until a new agreement is reached, the previous contract remains in effect with its guarantees of salaries and benefits, as well as all of its protections.

"We expect a large number of these districts to reach settlement over the next three to four months."

The average salary increase for all settled contracts covering the 2005-06 school year is 4.7%, the same as last year.

Trends in bargaining   In addition to controlling the escalating cost of fringe benefits, issues at the bargaining table revolve around increased instructional time and projected staffing needs.

·         More class time:  Twenty-eight percent (28%) of the 2005-06 contracts settled to date contain provisions for longer school days or longer school years.  Efforts to increase work time reflect a trend that began in the late 1990s in response to new state academic standards and requirements for teacher professional development.  Annually, about 30% of new teacher contracts reflect increased work time.

"The additional time could go toward classroom instruction or professional development for teachers," said Lee. "Both efforts are designed to benefit our students."

·         Attracting and retaining teachers: After agreeing to an overall salary increase, school boards are actively negotiating the distribution of the raises on the salary guide.  Salary guide development is crucial to a board’s ability to attract and retain the staff needed to meet its educational goals, according to NJSBA.

“The goal of the local board of education in negotiations is to advance quality education, while not overburdening local property taxpayers," explained Lee.   “That’s a tall order, considering that school districts are facing a fourth consecutive year with little or no increase in state aid.  At the same time, they must pay rising costs for health benefits, insurance, utilities and fuel—while trying to address education staffing needs.

“The New Jersey School Boards Association is committed to providing training and guidance to local school boards to enable them to be more effective at the bargaining table,” Lee continued.  “At the state level, the Association is advocating changes that would give local school boards more flexibility in negotiating cost-containment of fringe benefits and is urging the state Legislature to address the critical issue of school property tax reform by meeting in special session.”

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The New Jersey School Boards Association, a federation of district boards of education, advocates the interests of school districts, trains local school board members, and provides resources for the advancement of public education.

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