Tuesday, 18 November 2014 11:39
The Herpes of Obamacare becomes sore issue for Louisiana schools
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HealthCareDebate Like herpes, the Patient Protection and (Un)Affordable Care Act, known derisively as “Obamacare,” is the gift that keeps on giving, this time threatening to bring additional injury to Louisiana taxpayers over salary payments to teachers.


Because of the law’s provision that any non-small organization offer and subsidize health care insurance to employees of at least 30 hours a week or pay a $2,000 fine for each, either way this would cause a substantial increase in costs. Thus, many school districts across the state are reducing the number of hours a substitute may teach, for generally after three days a week of substitute teaching another day would bump them over the limit. In turn, this is reducing the amount of available hours from the existing pool of substitutes, leading in many places to a shortage of instructors.

In response, one affected superintendent conjectured that an increase in the amount a retired teacher could gain in salary as a substitute from 25 to 50 percent of pension income, set by state law, could alleviate the bottleneck. Except for positions of critical shortage that do not have to follow this standard, the cap prevents teachers from retiring and then double-dipping to any large extent, but by relaxing this requirement, theoretically as substitutes they could double their hours (and for those that would go over 30 hours as a result, insuring them should be moot as they already would have as part of post-employment benefits, largely paid by the state) and take up the slack now thrust upon districts by Obamacare.

But this is a bad idea. Already, teachers get a pretty sweet deal in pension benefits. The average classroom teacher’s salary in Louisiana (as of fiscal year 2012) already is over $48,000 a year, and the typical salary of one with a bachelor’s degree only and 25 years in is more like $50,000. (Keep in mind they also only work typically 182 days a year.) Stay years longer, and the typical salary (that was subject to almost automatic “merit” raises every year until reforms recently were instituted) will have increased tens of thousands of dollars on top of that, creating a lucrative base on which to derive a pension.

Yet many teachers will retire with higher pay than even this, because some will pursue graduate degrees and certification that increase base compensation, and because many strive to stay at least 30 years, given they can retire with a pension at any age with that and that would be 75 percent of the average of their salary typically from their last three years of service (recent reforms have changed this, but those hired under those rules are many years removed from retiring and getting a pension). Retirement at only 20 years also is possible for this cohort, at about 60 percent reduction, or at 25 years being at least age 55. The maximum 100 percent pension occurs after 40 years of service.

In other words, with a bachelor’s degree one could retire at 42 and draw a pension at about 20 percent of the highest salary earned, or at 52 draw 75 percent, or at 62 draw 100 percent. Then one can turn right back around and through substitute teaching get up to 25 percent of that pension income, meaning in essence the 52-year-old could make 100 percent of last salary by working perhaps half-time (as substitute rates, fixed per day but which vary by district, could be less than half of what a regular teacher would get per day, also depending on that salary), and the 62-year-old 125 percent. Few pension arrangements in the private sector are this generous in both terms of age and payment. The recommended change would add yet another 25 percent bonus.

Which is why changing the standard would serve as bad public policy. This not only would encourage earlier retirements, which would thin the pool of full-time teachers, and with this thinning of supply pushing salaries even higher to keep people from retiring earlier who intend to supplement through serving as substitutes, but also would create an incentive for those not intending to substitute teach upon retirement to retire in the others’ places because the higher salary makes for a higher pension, creating a vicious cycle either of tolerating shortages or of ever-increasing wages. It doesn’t solve the problem

Subsidizing a reduced work schedule, which only will increase costs to taxpayers both at the state level and for many at the local level (where many districts add their own funds to their share from the state for salaries), misses the real issue. The problem is with this specific provision of Obamacare, one of many of its odious features, that all together increase health care costs while making for less efficient, if not lower quality, delivery of health care services.

One of the insidious principles behind Obamacare, as exemplified through the employer fee or individual mandate for those without employer-provided insurance, is to make people pay for it to achieve its ideological objectives of greater government control and redistribution of wealth to favored constituencies. Increasing pay to teacher retirees penalizes further the citizenry because of it, when the genuine solution is to get rid of it or at least excise its (which comprise a majority of the program in total) objectionable provisions. Taxpayers should not be asked to let the power elite behind Obamacare get off the hook; continued school administrative difficulties because of this law creates incentives to demand undeniably necessary corrective actions to it. Citizens should not pay for a problem easily eliminated, so legislators should not raise the current 25 percent standard.

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Jeffrey Sadow

Jeffrey Sadow is an associate professor of political science at Louisiana State University in Shreveport.   He writes a daily conservative blog called Between The Lines

Website: jeffsadow.blogspot.com/
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