Teacher Bailout is Unnecessary

By Stephen Moore

The Obama administration is pressuring Congress to spend $23 billion to rehire the more than 100,000 teachers who have been laid off across the country. Before Congress succumbs, it should know about the unfolding fiasco in Milwaukee. Wisconsin is a microcosm of the union intransigence that's fueling the school funding crisis in so many cities and states and leading to so many pink slips. It also shows why a federal bailout is a mistake.

Because of declining tax collections and falling enrollment, Milwaukee's school board announced in June that 428 teachers were losing their jobs—including Megan Sampson, who was just awarded a teacher-of-the-year prize. Yet the teachers union, the Milwaukee Teachers Education Association, had it within its power to avert almost all of the layoffs.

The average pay for a Milwaukee school teacher is $56,000, which is hardly excessive. Benefits are another matter. According to a new study by the MacIver Institute, a state think tank, the cost of health and pension benefits now exceeds $40,000 a year per teacher—bringing total compensation to $100,500.

The current health plan costs taxpayers $26,844 per family, compared to the typical $14,500 cost for a private employer family plan. The plan does not require teachers to pay any premiums toward the cost of the health plan—a situation that is all but extinct in private employment. In the spring, the school board offered a new health plan that would reduce costs to $17,172 per family. The plan would have saved money by requiring co-pays.

According to a budget analysis the MacIver Institute obtained from the Milwaukee public school system, shifting teachers to the plan offered by the school board could have saved $47.2 million. This would have prevented, according to the report, the lay offs of "approximately 480 teachers"—more than the number that ultimately lost their jobs. But when union officials were presented the option, they chose to allow their members to be dismissed.