Monday, January 16, 2012

School Districts Have Act 10 Remorse

Imagine that you were leasing a car from Dealership A.  You got into the lease as part of a contract that you signed with the people riding in the car with you and were helping pay for the car.

But suddenly, the government ruled that you no longer had to abide by the contract you signed in good faith and you were free to go wherever you wanted to to lease a car.

You immediately go to Dealership B and lease a car from them, because it looks like a better deal.  However, Dealership A did some hard work, got a federal business grant and now gets a chance to offer their customers a significant discount.

You become outraged and demand that Dealership A give you that money they got and give it to you so you can use it to pay Dealership B.  When Dealership A, somehow managing not to laugh in your face at such a ridiculous demand, says no, you take them to court.

How far do you think you'd get before the case got tossed as being frivolous?

Not very far, most likely.

Yet that is what a number of school districts are doing right now.  They dumped their health insurance provider, WEA Trust as soon as Act 10 allowed them.

But WEA Trust had gotten some federal money to help defer the costs associated with the early retirements that stemmed from Act 10.  In turn, they are offering that discount to their customers.

Now the school districts that kicked WEA Trust to the curb is demanding that they hand over the federal funds to them, even if they are no longer customers of the company.

That is some really skewed thinking on the schools' part.

But what strikes me as really odd is that the right wingers are taking the side of the school districts.  In other words, they are actually OK with a government arbitrarily taking money from a private company.

Too bad they don't feel that way all the time.  Then the Big Businesses could start paying their share and lower the tax burden on the rest of us.  But then again, that would make sense, which is asking too much from the conservatives.


  1. Is this like me paying for home insurance to one company for 10 years, then deciding to switch companies and insisting that the first company pay for hail damage or fire or whatever?

  2. Here's why you're wrong: WEA may be a private company, but it has never competed fairly in a free market. It's customers were forced to be it's customers because of the unions. They didn't have to operate efficiently or offer better pricing than they did because the school districts couldn't go somewhere else anyway. They basically had a monopoly on the market. Conservatives have no problem taking money from them because they never competed on a level playing field anyway. They want the money to go back to the school districts to offset some of the higher-than-market costs that the districts absorbed before they had the flexibility to shop around.

    I'm surprised that liberals are okay with WEA Trust, especially given their opposition to privately-administrated healthcare exchanges. This is basically the same thing, only here the money is being taken out of the schools and transferred to a private company that was able to charge whatever it wanted regardless of what the competition was offering. Strange.

    In any event, don't set up WEA Trust as the victim here. And in response to the first comment, you're misunderstanding the issue. The money was received last year (or rather, received FOR last year) and it should be credited to the districts that were customers last year. In the situation you are describing, yes, I would fully expect my old insurance company to be on the hook for hail damage or fire damage that occurred during the time that I was insured by them. Let's say in March there was a storm that damaged my roof. The insurance company sends out an inspector to assess the damage, but for some reason the report gets delayed for three months. In May, I decide to switch carriers. In June, the inspector finally reports back to the first insurance company that the storm that damaged my house in March - when they were my insurance company - did indeed warrant a payout. In that case, the first insurance company would absolutely be liable.

    This is not a difficult concept to grasp if you simply look at the facts. Your position on this indicates that you are not in fact concerned with the districts being treated fairly and being able to make responsible financial decisions, but rather your interest is in ensuring that the unions and union-funded entities receive all of the money they possibly can regardless of who it is taken from.

  3. The school districts weren't "forced" to do anything. They negotiated these things. If you're not happy with their decisions, don't blame the unions for driving a hard bargain. That is what the free market is supposed to be about.

    As for the claim that the money was meant for last year, only the school districts are saying that, but I haven't seen their evidence to support that position.

    But the kicker or your argument is the complaint that the school districts are being treated unfairly. Where is your concern about fair treatment when the school districts decided to screw over the teachers? The fact is the school districts are scrambling to find every penny they can to help alleviate the problems they are going to face in the 2012-13 budget because Walker's budget will cause these budgets to implode, thanks to the Walker plan.