Congress bails out the unaffordable status quo

by Collin Hitt Congress approved another bailout yesterday. This one for state governments and local school districts.  The feds will print $26 billion, ostensibly to forestall 161,000 teacher layoffs.  Without getting into the details about the nationwide teacher hiring glut of the past ten years, the threat to fiscal federalism from this new ‘stimulus,’ or...

by Collin Hitt

Congress approved another bailout yesterday. This one for state governments and local school districts.  The feds will print $26 billion, ostensibly to forestall 161,000 teacher layoffs.  Without getting into the details about the nationwide teacher hiring glut of the past ten years, the threat to fiscal federalism from this new ‘stimulus,’ or the other actions that could be taken to save teacher jobs AND taxpayer money, let’s do some simple math.

Divide $26 billion by 161,000.  That comes out to $161,490, per job saved.  The average teacher salary in Illinois – which pays its teachers more than almost any other state – is $61,402.

Some will argue that only $10 billion was earmarked for education. The rest goes to states to cover their Medicaid costs, which were already set to rise thanks to Congress.  Money being fungible, the Medicaid provision is clearly intended to free up state cash to spend on education, but never mind that.

$10 billion for 161,000 jobs? Roughly $62,100 per job saved – still more than the national average for teachers, though not when you add in the additional payroll costs of their generous benefits which, if even modestly trimmed, could have permanently prevented the looming layoffs that this bill simply pushes off for another year.

This bill, like almost everything Washington seems to pass, creates a steeper funding cliff while moving us back ever-so-slightly from the edge.  This can’t go on forever.

This bill was not designed to protect teacher jobs. There were obvious measures that could have done that – pay freezes, slightly more modest pension and insurance benefits, etc.  This bill was designed, at the very least, to protect benefits, which is the product that all unions promise to deliver to their teachers.

Union leadership can live with layoffs. Yes, they would lose members, but the teachers they keep still have salaries, tenure and benefits to kill for – meaning that the unions have a thoroughly comfortable membership that, to boot, distrusts the administrations that laid off their younger, energetic, less-well-paid, and less protected colleagues (who, serendipitously for union leadership, were also less interested than their elder brethren in lifetime benefits). Yes, union leaders would most prefer to have cadillac benefits for all and a larger teaching force – which is what they got this time around, but is unaffordable in the long run.  The real disaster for the union leaders will come when teacher benefits are brought into balance and all members are suddenly less happy with elected union officials, or less likely to feel they need union toughs.  Sure, they might have a larger union workforce, but it would be a restless workforce that would need to adjust to real-world benefits, which would not bode well in the short term for union elections.

Of all the jobs that union leaders are looking to protect, the ones most important to them are their own. So, it’s hardly even a choice; union leaders will do their part to drive us to the cliff, with layoffs being the last but only option for administrators who believe in balanced budgets.  Which is to state the obvious: all the newest bailout does is guarantee that we’ll be back in this same position next year.

For now, this bailout is being sold as a jobs bills, which can play well with some during a recession. But what happens when the rest of the economy recovers and school districts find themselves in the same position or worse? What happens if a different Congress or a different president refuses to support any more bailouts? Union leadership would leave us with one choice: layoffs.