Americans have been watching Washington closely since November’s elections. Both those who celebrated and those who lamented the outcome do so, largely, for the same reason: in anticipation of dramatic change. And when it comes to change, the last few months have certainly presented their share. We recognize that, like the rest of the nation, our members have different feelings about what’s happening. We don’t presume to wade into those waters, or to try and convince you that the issues we’re about to treat in this newsletter need to be your most important issues. But as educators and union members, we believe they should matter to you.

For all the talk about policy and agencies, it’d be fair to say that showing up to school feels similar today to how it did last May. As such, and out of sensitivity to the varied feelings our members hold, I’ll try to avoid the kind of catastrophisizing people use when they talk about ideas they don’t like, and do the best I can to explain what we are watching - the policy changes and economic forces that most directly relate to what we do and how our livelihoods may be affected by them.

I hope that after all we’ve been through together over the last decade plus, and in light of all that we do for our members daily, you’ll give us a little room to discuss these items. I recognize that some members will wonder why certain issues are left off this list, and others will wonder why certain issues are included. Whether we agree or disagree on what’s important what whether the nation is heading in the right or wrong direction on these ideas, our focus as a union will continue to be on meeting the needs of all of our members. Whatever lies ahead - good or bad, big government or small, right or left, red or blue - it’s staying together that will help us come out stronger on the other side.

In unity and solidarity,
Richard

Uncertainty for State, and Therefore, Local Budgets

Most conversations about why the NYS budget was so delayed this year center on disagreements about the recently adopted bell-to-bell cellphone ban in schools. While that was definitely a source of contention among policymakers, they also had to grapple with the challenge of a adopting a $254B budget that makes promises to resident taxpayers and institutions that, once promised funding, will make plans according to what they’re promised.

In the same way that it’s hard to develop a school budget without a sense of what might change at the State level, it’s hard to develop a state budget without a sense of what might change at the federal level.

In the early days of the current administration, institutions like those of education, public health, social services and the arts already experienced cuts or threats of cuts. In addition to the overall trend of cutting funds, much of the federal government is being reshaped weekly. Both of these patterns cast uncertainty on states and agencies trying to plan for their financial futures. At times, we’re assured that federal reorganization does not automatically mean cuts to programs. Cuts to the Department of Education are a great example. It’d be accurate to say that cutting staff there doesn’t automatically mean cutting Title I funds, for example. To some extent, it can be misleading to say one thing automatically means the other. And yet, it remains to be seen if and how shifting work and budget lines from the Department of Education to other federal agencies might impact the states and districts that count on that work and those budget lines. Reductions in Department of Education staff and reductions in Title I funding, again, as an example, are distinct but overlapping concerns. Both matter, but how much they matter is in the details.

The third pattern that makes it hard to plan for the future is that of the federal government increasingly tying conditions to its support. Again, people have different feelings about this method of legislation and leadership. To some, it represents strong advocacy and negotiations on behalf of the American taxpayers. To others, it falls somewhere between quid pro quo and extortion. Regardless of how we feel about it, Washington uses the same general approach for handling foreign and domestic issues. Ukraine, Maine, private research universities, law firms and embattled politicians all run up against the same choice: what can/will you give to stay in the good financial and political graces of the US federal government?

As we’ve seen in recent weeks, that conditional support forces leaders and institutions to closely evaluate their values and their threshold for pain. And it begs the question: If, for example, the US Government were to tie strings to $25B or $35B in funding for New York, do our local leaders have the financial or political capital to refuse it? If we have to say “no” to something on principle, can we find the $30B? If we can’t, then what?

So elected leaders in NY and across the country have to plan their budgets with this looming question in the back of their minds: What if we lose tens of billions of dollars after adopting a budget and making promises? Now that the state budget is complete, and districts and municipalities are adopting their own budgets, which include anticipated revenue, spending plans, projects and, of course, people, losing funds can have both severe and immediate consequences.

Fortunately, our Teachers’ Contract has provisions for protecting jobs. We have language limiting the District’s right to cut program. We have language that anchors excessing to enrollment decline. We have language that protects related services from outsourcing. We have language that requires notice of employment by June 1 of each year. That’s all great.

But there’s still a lot that districts and members like ours can lose in the event of something like a mid-year cut. It’s important to think about that in the context of both where we work, and where we live and send our children to school.

Before I move on to other things we’re watching, please note there is no evidence that the State or local school districts will experience these kinds of cuts. I’m merely translating what “budget cuts” sounds like on the radio to what it can look like in real life. The State is still funded, and so are its schools.

Market Impact of Economy on Retirement Systems

Almost 90% of what it takes to fund our retirement systems comes from returns on their own investments. The remaining 13% or so comes from a combination of employer and employee contributions.

Each year, actuaries carefully examine the system’s expenses and investment returns, then calculate what it needs to collect in order to remain in good health. During their examination, they use a five year average of market performance. Good years for the market bring the average returns for the system’s portfolio up, and bad ones bring it down. When the returns drop significantly, they require increases to the employer contribution rate (ECR).

Because New York’s retirement systems are so well-funded and well-managed, most changes to the ECR are relatively small. But in periods of economic downturn and poor performance, they can be significant. In the years following the 2008 market collapse, the ECR more than doubled. For school districts and other municipalities, that meant paying $20M towards employee retirements, for example, instead of $10M.

It’s during the last post-collapse window that dozens of states in the US - including New York - implemented massive changes, such as new tiers, to their respective retirement systems.

Markets are still trying to figure out how to respond to the various economic initiatives being advanced, and there’s a lot of year left. That said, a year that ends with a $5-10 trillion loss in market value would undoubtedly impact our systems’ five-year averages. How much would depend on a number of other factors.

I should say, here, that our retirement systems are in absolutely no danger whatsoever. They continue to be among the best funded and best managed funds in the country, and they’ll continue to be there for us when we reach retirement.

What we watch in times like these, are the immediate impact to the systems, and how those will affect what employers have to contribute. Since the implementation of the Tax Cap, school districts can no longer ask for more revenue when they need it. Increasing one expense means having to decrease another as they back into their fixed incomes.

In the longer term, we watch the big picture when it comes to things like retirement tiers. Leaders throughout the state are committed to fighting for improvements to tiers 5 and 6. Those are easiest to achieve when the financial capital, and the political capital, support improvements.

Attacks on Unions

You may not think about collective bargaining often, but you should! It gives working people like us a unified voice to negotiate fair wages and working conditions. For many unions like ours, it represents decades of work and advocacy, turning needs and wants into the kind of contracts that empower us to provide for our families and live a good life. In HHH, our Teachers’ Contract, for example, represents 57 years of progress, growing it from the four articles it started with in the late 1960s, to the 48 articles that are in it today! We all count on our contracts to set terms and conditions for our jobs and provide the security and predictability that allow us to plan our lives: buying homes, paying for college, saving for retirement.

At the end of March, Executive Orders were issued to end collective bargaining at many federal agencies throughout the US. Aside from threatening to ban collective bargaining moving forward, the Order would have invalidated previously negotiated contracts.

As other hardworking people wake up to hear that their contracts are being revoked, or that they’re being fired after decades of service, it’s important that we not lose sight of what that means to a family. How would we feel if we woke up tomorrow and found that the benefits we value were all gone? How might your life change if your contract was shredded tomorrow? How confident are you that it won’t ever be the case?

Charters and Vouchers

Many leaders in Washington show consistent support for charter schools, voucher programs, and decreasing the separation of church and state when it comes to K-12 education, and blending these values, using voucher programs to shift public education funding towards religions schools.

Again, putting aside how any one of us may feel about what’s taught in schools or why, it’s worth focusing on the potential impact of the expansion of things like charter schools and voucher programs on public education.

Because of the overall quality of our public schools, most of Long Island hasn’t been as affected as other regions and states. Yet despite the fact that we don’t see charter schools every day when we pick the kids up at soccer practice, this year, $170M was siphoned out of local school district budgets on LI to fund them. That’s up from $121M two years ago - a 40% increase. Some districts lose tens of millions of dollars each year. Imagine if we lost that kind of money from our budget. It would be devastating.

In addition to the cost of expanding charter schools, the current House budget includes $5B for private school vouchers. Vouchers, like charter expansion, come at the financial expense of public schools, which can lead to reductions in staff and program.

Increasing favorability to charters, vouchers and the idea of transforming the bedrock of public schools into a privately run marketplace free from the oversight or standards public schools are held to is a slippery slope. Many aspects of society work well when they’re commoditized and in the hands of free market forces. A sound system of public education is not one of them.

Medicaid Funding

We hear a lot of talk in the media about threats to Medicaid funding. Again, like many of the other items discussed here, most talk is rooted in conjecture about what might happen. Thankfully, leaders on both sides of the aisle express real concern about how cuts to Medicaid would impact people. It’s worth reminding members, here, that Medicaid funding doesn’t only go the healthcare industry. School districts receive Medicaid funding to meet related service needs for our students. At least some portion of what it costs to pay for occupational therapists, physical therapists, speech therapists, psychologists, social workers, guidance counselors and school nurses is funded by Medicaid. Even losing a few hundred thousand dollars, for example, means districts across the state would have to find the money elsewhere in the budget, or figure out how to do without.

Student Loans and Public Service Loan Forgiveness

The government’s role in promoting higher education affordability is another issue we know many of our members disagree about. Putting aside those differences, members carrying student loans should closely follow changes that may impact them.

As a reminder, the federal government is the largest holder of student loan debt in the country. Just under 43 million borrowers owe the US roughly $1.5 trillion. As the increasing cost of college outpaces wage growth, one in four borrowers has fallen behind on their debt. The Administration has recently restarted involuntary collections for defaulted student loans, and has communicated its intent to garnish wages, tax returns and social security benefits in an effort to collect on its debt.

Whether you’re still paying off your education, or paying for your child’s (or both!), it’s worth watching changes to loan repayment structures. While garnishing wages can definitely create an added strain on people already struggling to make payments, there are some repayment plans being discussed in the Administration that potentially help with repayment. Like other items we’ve discussed, it’s important to pay attention to changes.

So many of us celebrated having our loans erased under the Public Service Loan Forgiveness program in recent years. HHHTA members who’ve worked in public service and made loan payments for more than ten years had more than $2M in student loans forgiven!

As we supported our members through their loan forgiveness journeys, we had countless conversations with members who wanted to participate but hadn’t yet reached the 10-year mark. Our hope is that as you do, the PSLF program continues to do what it was designed to do when the Bush administration announced it decades ago: to reward Americans who choose to devote their lives to public service.

While there are no changes to PSLF currently in effect, a recent Executive Order has charged the Secretary of Education with revising the definition of “public service” for PSLF eligibility.