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Fund gives Hub teachers $8m in perks

Union defends trust that dates to 1968

By Andrew Ryan
Globe Staff / December 27, 2010

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Like most city workers, Boston teachers enjoy generous health benefits that would be the envy of many private-sector employees struggling with rising insurance costs.

But teachers can count on even more: A taxpayer-funded trust provides dental and vision coverage better than the plan for most city workers. In recent years, the trust paid some $45,000 annually for funeral expenses, hearing aids, a softball league, and other extras, according to recent tax filings.

As part of the package, taxpayers also contributed almost $1.3 million in the last school year for teachers’ legal services unrelated to the classroom, helping with wills, bankruptcy, real estate, name changes, and defense against some misdemeanor criminal charges.

The perks cost taxpayers $1,423 per teacher and $887 per paraprofessional this year, for a total of almost $8.4 million. That figure is above and beyond the $86.2 million the city will contribute for teachers’ life and health insurance, which includes below-average premiums and copayments as low as $10.

The Boston Teachers Union makes no apology for its trust fund, saying that it agreed to the benefits decades ago instead of a pay hike. Payments to the fund are set at a fixed rate per teacher, union officials said, so the expense to taxpayers is capped and will not rise unexpectedly like other health-care costs.

But with a sputtering economy, the city faces intense financial pressure as it negotiates a new contract with teachers and almost all of its other 43 unions. The School Department alone must close an estimated budget gap of $63 million and plans to shutter 10 schools and consolidate eight others to cut costs. Some observers argue that the time has come for the city to take a hard look at old collective-bargaining deals.

“It’s time to rethink health and welfare and treat teachers exactly as other employees in terms of benefits, and eliminate the expenditures for these other services,’’ said Samuel R. Tyler, president of the Boston Municipal Research Bureau, a fiscal watchdog funded by businesses and nonprofits. “It really ought to be an item on the list in terms of trying to negotiate changes.’’

The fund dates to 1968, when Mayor Kevin H. White sought an alternative way to compensate teachers, said former members of the contact negotiating team for both the union and management. The first year, taxpayers contributed $50 for each of the city’s 4,500 teachers, according to a 1972 decision by the Supreme Judicial Court.

“It came in lieu of salary,’’ said Richard Stutman, president of the union, which has about 6,500 members. “It is no extra than saying to someone, ‘You make 60 grand; two grand of that was extra back when you got it.’ We were offered more salary, but we took it this way. [Other unions] got larger salary increases all those years that we didn’t.’’

The union’s website describes the services as “a generous and valuable package’’ with “unique ‘extras’ to add to your total benefits.’’ School administrators have touted the plan in national recruiting efforts when they try to lure educators to Boston, union officials said.

About 80 percent of benefits paid by the fund are for dental and eye care, according to the trust’s most recent tax filings. The money allows the union to operate a vision center at its headquarters in Dorchester, employing a full-time optometrist and other staff.

But at $1,423 per teacher, the total cost of the perk is more than double what Boston pays for dental and vision for most other employees, who did not gain the coverage until 2001, according to city officials. The most popular health plan — a Harvard Pilgrim HMO — already includes very basic vision coverage, city officials said. The majority of Boston employees are covered by the state’s dental trust fund, which costs the city roughly $700 per employee each year.

If the teachers union “was covered by the same plan as other union members in the city for dental insurance . . . it would save money,’’ said John McDonough, the School Department’s chief financial officer, who has done some “ballpark analysis’’ of the costs. “It is significant.’’

Spending by the trust fund for other perks ranked much lower, with $9,849 one year for recreation, which includes a softball league and a fun run. Another year the fund spent $11,026 on funeral expenses for a benefit that will reimburse up to $1,000 for services when a teacher dies, according to the union’s website.

The almost $1.3 million that taxpayers spent for the teachers’ legal services goes to a separate trust fund. Union members use the money most commonly for real estate transactions, to designate health care proxies, and to draft wills, according to Patrick Connolly, a union trustee. The benefit cannot be used to fight felony charges, Connolly said, or for disputes in the classroom and other school-related issues. Last year the legal fund paid $672,000 in benefits for roughly 1,300 claims, according to the union and tax filings.

“When all of these things were established, it was a totally different fiscal environment in terms of pay scales,’’ said Michael G. Contompasis, a former Boston schools superintendent and chief operating officer who served on the contract bargaining committee for 15 years. “Every time you ask to get something back in lieu of something that’s been given, it always comes with a price.’’

The contract negotiated by the White administration doubled the payment in 1969, giving $100 to the fund per teacher. With each new contract over the past four decades, the taxpayers’ contribution increased, often at the same rate as pay hikes. When the city pays almost $8.4 million this year, the health and welfare fund will cost six times the original deal cut in 1968 after adjusting for inflation.

“We view it as part of the total compensation package,’’ said Connolly, the union trustee, who noted that other unions have their own benefits, such as uniform allowances. “The city has a certain amount of money for wages. If we allocate part of that to an increase in the health and welfare fund, it takes it out of the pot of money that’s there.’’

Andrew Ryan can be reached at acryan@globe.com.