The 2009-10 state budget will be horrible. Can the move into CalPERS health plans really be linked with compensation enhancements such as new salary steps and HRA’s?

It can – unless the budget-slashing is so severe that fulltime jobs are on the chopping table and the opening of existing contracts is under discussion. And under circumstances this dire, the move to CalPERS, even without accompanying compensation improvements, will save the district from fiscal calamity and employees from the unemployment lines.

We don’t expect and can’t plan for financial catastophe, but we are sober enough to understand that in 2009-10 the district cannot spend more on employee compensation (salary and benefits combined) than it spent on employee compensation in 2008-09. Our CalPERS/compensation enhancement proposal is built on an assumption of flat revenue for 2009-10.

If we reject the CalPERS move and maintain district-sponsored health plans, we will have to modify the plans significantly to offset a $5.5 million premium increase just to achieve the goal of maintaining the 2008-09 expenditure level. There will be no other revenue available for compensation enhancements.

Under the CalPERS plan proposed by the Guild Executive Board, the LACCD can maintain the 2008-09 expenditure level in 2009-10 and provide improvements to salary schedules, initiate employer-funded HRA’s, and increase district contributions to adjunct health insurance premiums.

That’s all possible because the CalPERS plans cost $12 million less than equivalent district-sponsored plans would cost. In addition to the premium savings, the district also saves on consultant costs and on the administration of the health benefits program. That kicks the total savings up into the $14 million range. These savings would cover any increase in the 2010 CalPERS plan rates, generate dollar savings for the district and still fund all of the following:

• a new step on Columns A-D on the prep schedule (each new step is an additional 3.6%)
• an increase in each of the five career increments on Column E (from 2.387% to 3%)
• a new Step 10 on Column K of the adjunct credit teaching schedule (new step is 3.2% additional)
• an HRA of $1500 a year for every benefited employee
• an increase from $180 to $230 in the district’s monthly contribution to adjunct health plans

Other bargaining units would be able to negotiate similar salary enhancements, in addition to the HRA for all their unit members.

Stable benefits, improved salary, a higher pension, and an HRA. Or steadily deteriorating benefits, flat salary and pension, and no HRA. That’s the choice you will soon be making.