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Your editor will spend some time this weekend offering his thoughts on today’s move by U.S. Secretary of Education Arne Duncan to depart from the Obama Administration at the end of the year. Certainly Duncan deserves plenty of criticism over the administration’s No Child Left Behind waiver gambit and the shoddy policymaking that came with it. The consequences it will have on systemic reform efforts on the ground, both now and down the road, is staggering and unfortunate. At the same time, the onetime Chicago Public Schools Chief Executive Officer deserves plenty of praise for his efforts to advance systemic reform, especially in expanding public charter schools, pushing for the use of student test score growth data in teacher evaluations, and addressing the overuse of harsh school discipline.

wpid-threethoughslogoBut right now, let’s get back to digging into the American Federation of Teachers’ latest financial disclosures to the U.S. Department of Labor. As Dropout Nation has detailed over the past few days the nation’s second-largest teachers’ union spends heavily — to the tune of $42 million — to preserve its declining influence over education policymaking. But there are plenty of other reasons the union spends so heavily to oppose systemic reform. One of the biggest: To help it offset declines in membership.

Thanks to the abolishing of collective bargaining and forced dues collections in Wisconsin, Tennessee, and Michigan, AFT (along with the National Education Association) have lost plenty of teachers, reform-minded and otherwise, who realize that they don’t have to pay into unions that don’t represent their interests. The AFT’s counts 699,739 full-time members in 2014-2015, a 1.9 percent decline over the 713,320 full-timers in the rank-and-file during the previous year. This marks the second straight year of full-paying membership decline — and the fourth year of declines since 2009-2010.

Even worse for AFT is the fact that it will likely lose even more full-paying dues members within the next few years. One reason lies with the likelihood that the U.S Supreme Court, through its consideration of Friedrichs vs. California Teachers Association this year, will strike down Abood v. Detroit Board of Education, the five-decade-old ruling that gave AFT and other public-sector unions the ability to compel teachers and other civil servants to pay dues into their coffers even if they aren’t members. As your editor noted last year, the end of compulsory dues laws could cost AFT 25 percent of its membership and $36 million in revenue (based on 2012-2013 numbers), a hit for which the union isn’t likely ready to address.

The other reason: Mergers between AFT’s state affiliates and that of the NEA, which essentially lead to the splitting of revenues between the frenemies. The latest one that is coming is in Wisconsin, where the union’s affiliate there will merge with NEA’s Wisconsin Education Association Council. AFT counts 166,934 merged local and state affiliate members among its ranks, a 5.9 percent increase over the previous year. Such deals not only split cash, it also forces AFT to eventually consider a merger with NEA, a deal that has been pursued unsuccessfully two decades ago.

To compensate for these losses, AFT has done all it can to expand its ranks to professions beyond teaching. This hasn’t always been successful. The union’s effort to increase the number of so-called associate members who pay directly into national’s coffers, has fallen apart. Just 58,482 such members were on AFT’s rolls in 2014-2015, a 17.2 percent decline over the previous year. Given that AFT itself can’t provide those members any real assistance in terms of negotiating teachers’ contracts or addressing work rules — after all, the national office is primarily concerned with the politics of education — and can’t vote anyway, those associate members still paying into the union aren’t getting a good deal.

More-successful has been AFT’s moves to expand beyond the education sector into healthcare and other areas of the public-sector. This includes last year’s affiliation deal with the National Federation of Nurses, which makes it the second-largest nursing union (after the 150,000-member National Nurses United) as well as a competitor with the much-larger Service Employees International Union. Thanks to these deals, AFT now has 99,973 one-quarter members, a 1.6 percent increase over levels in 2013-2014; it also has 35,067 one-eighth members, 3.8 percent more than a year ago.

As a result of this growth, along with an eight percent increase in the number of one-half members (or school employees who make less than $18,000 a year), and a four percent increase in retirees paying into its coffers (to 344,381 in 2014-2015), AFT is staying afloat. Whether this does any good for teachers in the rank-and-file, whose voice is weakened by an increasing minority status within the union, or even for those rank-and-filers in other fields (who aren’t represented by a union fully-devoted to its interests) is a different discussion entirely.

The retired members are a particular boon politically to AFT’s local bosses, especially in suppressing the voice of teachers still working in classrooms. In New York City, for example, the union’s United Federation of Teachers gives retirees 25,000 votes in its elections even though they are no longer on the job. Thanks to this and other moves, retirees accounted for 52 percent of all votes cast in the local’s last election two years ago, creating apathy among classroom teachers of all stripes.

Yet the membership growth isn’t doing much for AFT’s revenue line. The $159 million in forced dues collections (in the form of a per-capita tax on members at the local level) generated by the union in 2014-2015 was 6.3 percent lower than in the previous year. AFT’s overall revenue of $328 million (including loan proceeds) this past fiscal year was five percent lower than in 2013-2014. To keep operations afloat, AFT borrows heavily. The union borrowed $106 million in 2014-2015, slightly less than during the previous year; the union has borrowed $422 million over the past four years in order to run its operations. Without the loans, AFT generated revenue of $222 million in 2014-2015, a 4.7 percent decline over the previous year.

The good news? AFT spent less overall even as it generated lower revenue and poured more into political activities. The union’s expenses of $329 million last fiscal year is 1.4 percent less than in 2013-2014. But that’s not because AFT cut the fat. Credit the decline to an 18 percent decrease in loans the union had to repay to its lenders. Like so many traditional districts, AFT must also address healthcare and other liabilities to retired staffers. The union’s $35 million in accrued post-retirement benefit liabilities on the books in 2014-2015 is 14 percent higher than a year ago. AFT also owes $12.6 million in loans, a 13-fold increase over levels in 2013-2014. The union must also tend to a $1.4 million loan it guaranteed on behalf of its Beltway affiliate, the Washington Teachers Union.

None of these issues keep AFT from spending big. Especially on staff. As your editor noted on Tuesday, AFT has added 10 more staffers earning six-figure sums within the last year. Those highly-paid mandarins on staff also did well. The notorious Leo Casey, who runs the union’s Albert Shanker Institute, earned $214,911 in 2014-2015, 7.9 percent more than in the previous year. David Strom, the union’s general counsel, pulled down $208,356, slightly more than the $205,762 earned in 2013-2014. The times are good for the staff, at least for now.

Dropout Nation will provide further analysis of the AFT’s financial filing over the coming weeks. You can check out the data yourself by checking out the HTML and PDF versions of the AFT’s latest financial report, or by visiting the Department of Labor’s Web site. Also check out Dropout Nation‘s new collection, Teachers Union Money Report, for this and previous reports on AFT and NEA spending.

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