A Lose-Lose for Teachers: NJEA Wastes $45 Million of Their Dues and Diminishes the NJEA’s Political Clout When It’s Really Needed

Not only did NJEA leadership waste $45 million of teachers’ dues on NJEA President Sean Spiller’s vanity run for governor, they also have hurt their ability to influence policy decisions that really matter to teachers. Both teacher health benefits and pension plans require political solutions just when the NJEA has lost political clout due to the excessive spending behind Spiller’s failed run. That’s a lose-lose for teachers.

HEALTH BENEFITS: In an issue of major importance to teachers, the state’s pension plan actuaries are recommending large premium increases to keep the plans solvent through 2026.  All levels of state government, public employees, and taxpayers would all be negatively impacted. The School Employees Health Benefits Plan (SEHBP) for school employees (and retirees) would see premiums rise by a massive 29.7% overall. Elected officials at all levels, including the governor and the legislature, are now trying to cope with this unsustainable reality.

Surely, the NJEA knew this was coming, as it holds three of nine seats on the SEHB Commission. SEHBP and other public plans’ costs have been rising for years due to higher utilization and higher costs for treatments.  All the major public plans lost money this year, including SEHBP, which lost $254 million.  Yet, here we are again. Did the NJEA takes its eye off the ball as it focused on Spiller’s failed run?

PENSIONS: Teachers who started after 2011 — approximately half of all teachers — have been stuck in inadequate Tier 5 pensions. Tier 5 employees pay more, have 10-year vesting period, and must have very long careers just to qualify for meager pensions when they retire. The NJEA is pushing legislation to change that, with bills introduced in the legislature.  Again, this is an issue of major importance for a large number of teachers.

But enhancing state pensions when New Jersey’s budget is already under strain is a very heavy political lift. The NJEA claims that this would add $436 million in pension costs to the state per year, but the state is already contributing $7 billion a year, which is 12% of the budget.  And then there’s the health benefit problem, which adds additional pressure on the budget.  This is a time when the NJEA’s political clout is needed.

SPILLER’S RUN DIMINISHED NJEA CLOUT:  So just when the NJEA needs maximum clout to deal with difficult issues of great importance to teachers, the NJEA has diminished that clout by spending $45 million on Spiller’s vanity run.  NJ Spotlight News quotes Micah Rasmussen, director of the Rebovich Institute for New Jersey politics:

It’s hard to find value for teachers in this $40 million-plus investment. I don’t think there is any evidence I can find that it led to a bigger discussion on the plight of teachers. It didn’t lead to, I think, an improved climate for teachers … The high spending may have created more backlash than benefits. [Emphasis added.]