menu search recent posts
December 9, 2016 standard

One of the bigger stories with the National Education Association is the loss of rank-and-file. Thanks to efforts by governors and state legislatures in Wisconsin, Tennessee, Michigan, Indiana, and Alabama to end collective bargaining and compulsory dues payments, the nation’s largest teachers’ union and its affiliates has seen declines in rank-and-file, putting strain on its finances in the process. As a result, NEA’s rank-and-file declined by 6.3 percent between 2010-2011 and 2014-2015 (from 3.3 million to three million), resulting in a 2.2 percent decline in dues collection within that same period.

But as the union reported in its 2015-2016 financial disclosure to the U.S. Department of Labor, the declines have stopped, at least for the time-being. The bad news? The finances of its affiliates, along with the long-term loss of rank-and-filers to come, continue to weigh heavily on the union’s future prospects.

NEA sustained no declines in rank-and-file this past fiscal year. That’s the good news. But it didn’t significantly increase them, either. NEA added just 8,804 rank-and-filers and agency fee-payers to the rolls in 2015-2016, which led to a mere two-tenths of a one percent increase over the past year.

As a result of stemming those losses, as well as a $1 average increase in annual dues (from an average of $119.05 per member in 2014-2015 to $120.05 in 2015-2016), NEA collected $367 million in dues last fiscal year, a 1.1 percent increase over the previous period.

NEA’s overall revenue of $388 million was a slight decline from levels in 2014-2015. This included $8.4 million in revenue from NEA Member Benefits Corp. the financial scheme the union runs to peddle annuities to its rank-and-file (which also gets kickbacks from the Wall Street firms that sell through it); that is 13.6 percent more than revenues generated from the outfit last year.

Meanwhile the union generated a surplus of $1.4 million for 2015-2016. That’s a 95 percent decline from the $27 million in surplus generated in the previous period. Why? A 30 percent increase in general overhead costs (from $51 million to $66 million), and a 65 percent increase in asset and investment purchases (from $8.3 million to $13.7 million) offset declines in benefit expenditures. A five percent increase in payments to its pension (from $19.7 million to $20.7 million) also led to the lower surplus. At least none of the lowered surplus can be blamed on poor internal controls or embezzlement.

But the good news on rank-and-file numbers, such as it is, doesn’t hide the reality that NEA’s future, financial as well as political, is quite bleak.

The union’s affiliates affected the most by the abolition of compulsory dues are still taking hits. The union’s virtually-insolvent Michigan Education Association, for example, had just 127,785 rank-and-file in 2015-2016, according to its filing with the Department of Labor, a 2.5 percent decrease over the previous fiscal year; its rank-and-file declined by 16 percent over the past five years. Meanwhile a 59 percent decline in rank-and-file has forced the Wisconsin Education Association Council into a merger with the American Federation of Teachers’ hard-hit affiliate as well as pushed it to sell its sweet headquarters in Madison.

But the problems lie not only with NEA’s state affiliates in right-to-work states. The end of class size reduction regimes in many states, the lingering effects of the last decade’s economic meltdown, the virtual  insolvencies of defined-benefit teachers’ pensions, and the retiring of Baby Boomers from classrooms, has resulted in growth being slim to none for many affiliates.

Rank-and-file numbers for NEA’s still-influential units in Illinois, and Ohio barely budged between 2014-2015 and 2015-2016 — and almost no growth at all for either within the past five years. Rank-and-file numbers for union’s Florida affiliate (which is also affiliated with AFT) barely budged; in fact, membership declined by 5.6 percent between 2011-2012 and 2015-2016.

One of the few bright spots for NEA is its Education Minnesota unit, whose rank-and-file numbers increased by 2.7 percent between 2011-2012 and 2015-2016. But it barely added members during this past fiscal year. If Republicans who just took control of the Land of Nice’s legislature have their way, the union’s ability to forcibly collect dues will eventually go into history’s ashbin. But thanks to the presence of Democrat Mark Dayton in the governor’s office, that’s not likely for now.

The lack of rank-and-file growth is troubling for NEA because the long-term financial woes of many of its affiliates are worsening.

Unfunded defined-benefit pensions and retiree health liabilities have long-damaged the balance sheets of some key affiliates. The union’s Michigan affiliate, for example, reported $296 million in unfunded pension and retiree healthcare liabilities in 2015-2016, a 3.1 percent increase over the previous year. If the affiliate was forced into bankruptcy, its $67 million in assets (a 9.8 percent decline over 2014-2015) couldn’t cover these and other liabilities.

The NEA’s Illinois unit reported $46 million in unfunded pension and other retiree liabilities in 2015-2016, a whopping 44 percent increase over levels in the previous fiscal year. [Its $63 million in overall liabilities is a 25 percent increase over 2014-2015.] If it ever landed in bankruptcy court, the Illinois unit’s $53 million in assets couldn’t cover any of what it owes to retired employees and other creditors. The union’s Pennsylvania State Education Association reported $75 million in pension and retiree health liabilities in 2015-2016, a staggering 37 percent increase over the previous year; the only good news is that the unit’s $102 million in assets can cover those and other liabilities.

Even NEA’s most-influential and wealthiest affiliate, the California Teachers Association, is struggling with pension and healthcare liabilities. In a memo to its staff union CTA revealed that its Retirement Trust has unfunded liabilities to the tune of $105 million. While CTA can cover those shortfalls with $183 million in assets (as of 2013-2014, according to its filing with the Internal Revenue Service), the growth in those liabilities (along with reasonable long-term fears that it will no longer be able to forcibly collect dues from classroom teachers) has forced the affiliate to play hardball with its staff union during its most-recent contract negotiations.

[As Dropout Nation reported last month, the virtually-busted New York State United Teachers (which is an NEA affiliate despite being controlled by AFT) has $503 million in unfunded pension and other retiree healthcare liabilities, a 31 percent increase over 2014-2015.]

For these affiliates, along with three under NEA receivership — Indiana State Teachers Association, Alabama Education, and South Carolina Education Association — the subsidies from NEA are more-welcome than ever.

NEA subsidized WEAC to the tune of $2.1 million in 2015-2016, an 11 percent increase over the previous year; based on the affiliate’s reported revenue of $13.2 million in 2013-2014 (the latest year available), NEA subsidies likely account for 16 percent of its money stream, and given the unit’s flailing finances, likely more than that. NEA also poured $5.5 million in subsidies into its Michigan affiliate, a 15 percent decline over 2014-2015; even with those declines, NEA dollars accounted for 4.9 percent of the unit’s revenue of $111.8 million.

The union subsidized its Illinois affiliate to the tune of $4.5 million in 2015-2016, an 8.2 percent drop from the previous year; the subsidies accounted for six percent of the unit’s revenue of $75.5 million. As for Pennsylvania? NEA provided $5.3 million in subsidies to the unit, barely budging from levels in 2014-2015; those dollars account for 5.2 percent of PSEA’s revenue stream.

What about ISTA? NEA provided $1.3 million in subsidies to the busted Indiana affiliate in 2015-2016, a 24 percent decline from the previous year. ISTA also managed to whittle down its debt to national by another $1 million in the last year, leaving it with $11.5 million in arrears. The national union has subsidized ISTA to the tune of $6.9 million in the last five years alone, not including the millions it has had to pour into the Hoosier State unit since 2009, when its VEBA went insolvent amid a $67 million deficit and spectacular financial mismanagement.

As for NEA national? The union’s defined-benefit pension plan reduced its insolvency by 18 percent to $91 million (as of 2014, the most-recent year reported), according to its annual notice to retirees. The good news is that NEA could liquidate some of its $377 million in assets to address that insolvency if needed. On the other hand, the union’s retiree healthcare trust remains well-funded, with just $55,480 in liabilities compared to $117.6 million in assets (as of 2015, the latest year available, according to its filing with the IRS).

Meanwhile the long-term threats to NEA’s clout and finances loom larger and more-immediate than ever. The union’s big bet on Hillary Clinton to win the presidency blew up badly, while its support for Senate and Congressional Democratic candidates also went pear-shaped. With the incoming administration of Donald Trump being hostile to public-sector unions and an even less-sympathetic Republican-controlled Congress, NEA has even less influence on Capitol Hill than it did two years ago. The institutional Blanche DuBois will have to depend on the kindness of outfits such as National School Boards Association (whose ties to Republicans are cozier thanks to suburban districts in its membership) and that’s not a great place to be.

Trump still has to fill the Supreme Court spot vacated earlier this year through the death of the legendary Antonin Scalia. This likely means that the next justice will finally overturn Abood v. Detroit Board of Education, the five decade-old ruling that allows NEA and AFT affiliates to force teachers to pay into its coffers regardless of their desire for membership. The union likely already expects a version of Friedrichs v. California Teachers Association (which the court shot down in a 4-4 ruling after Scalia’s demise) to work its way through the courts.

Based on the struggles of NEA’s state affiliates in Wisconsin and Michigan, it is clear that neither national nor its other affiliates are ready to adapt to the end of compulsory dues laws and workplace monopolies. The union hasn’t even followed AFT’s steps and hired staffers from the Service Employees International Union, which has long been the nation’s most-successful labor organizer, in order to prepare for the future.

In short, long days ahead for NEA’s guitar-slinging president, Lily Eskelsen Garcia, and the rest of the union’s leadership.

Dropout Nation will provide additional analysis of the NEA’s finances down the road. You can check out the data yourself by checking out the HTML and PDF versions of the NEA’s latest financial report, or by visiting the Department of Labor’s Web site. Also check out Dropout Nation‘s Teachers Union Money Report, for previous reports on NEA and AFT finances.

December 5, 2016 standard

Last week, Dropout Nation detailed how National Education Association spent big to score a major victory over reformers in the battle over the charter school expansion plan contained in Massachusetts’ Question 2. But further analysis of the Big Two teachers’ union’s 2015-2016 disclosure to the U.S. Department of Labor shows, the Bay State wasn’t the only place where NEA spent big — and scored success.

In Maine, for example, NEA poured $1 million into Citizens Who Support Maine’s Public Schools, a coalition including the union’s state affiliate. The group would go on to successfully push for the passage of Question 2, a ballot measure to levy a three percent tax on incomes of greater than $200,000 ostensibly to finance the state’s traditional public schools. [Opponents of the measure are pushing for a recount.] Thanks to NEA, Citizens and its allies outspent opponents of the measure (including Gov. Paul LePage) by $3.6 million ($3.9 million to 286,717.95, according to Ballotpedia), effectively winning the spending — and ultimately, the electoral — battle.

Another big score was in Georgia, where NEA’s state affiliate and traditional districts successfully beat back Amendment 1, Gov. Nathan Deal’s plan have allowed the Peach State to take over 127 failure mills and put them into a statewide district similar to Louisiana’s now-defunct Recovery School District. To help beat back that effort, NEA reported at the end of its fiscal year that it poured $500,000 into Committee to Keep Georgia Schools Local, a coalition featuring NEA’s Georgia Association of Educators and the state branch of AFL-CIO. [NEA also gave $100,000 to GAE in support of opposing the ballot measure.] These dollars, along with another $3.4 million NEA tossed into Keep Georgia’s coffers during the first months of its current fiscal year, and another $200,000 from American Federation of Teachers, helped opponents of Amendment 1 outspend supporters by a 2-to-1 margin ($5.1 million versus $2.6 million).

But not every measure NEA backed was passed at the ballot box. In Oregon, the union poured $350,000 into Yes on 97, which fought to pass a measure levying a 2.5 percent gross receipts tax on businesses generating more than $25 million in annual revenue; NEA gave another $2 million in cash and in-kind donations between September and November, months after the end of its 2015-2016 fiscal year, according to Oregon’s Secretary of State. [AFT, whose nursing and teaching affiliates are big political players in the state, gave $1 million to Yes on 97.] The union also gave $150,000 to one of its longtime vassals in the state, Defend Oregon, which worked with Yes on 97 to push the measure. But on Election Day, voters rejected the proposed tax by 59 percent to 41 percent.

But NEA ballot battles weren’t just about opposing school choice and raising tax revenues that would ultimately contribute to its bottom line. It also worked to support its allies, especially progressive groups and labor unions, in their efforts to increase minimum wages and defend gay rights. Certainly, neither NEA nor its rank-and-file directly benefit one bit from minimum wage increases and the union’s affiliates have proven willing to back anti-gay rights candidates when it suited their purposes. But by supporting those efforts, NEA bolsters its image as a champion for progressives, gay households, and low-income households, even as it fights for policies and practices that ultimately harm the latter two groups by denying their children high-quality education.

While reformers have been successful in building similar alliances with businesses, the movement has recently struggled to extend beyond those relationships to social justice activists and even organizations in rural communities such as Future Farmers of America. In fact, reformers remain split over the simple matter of working with Black Lives Matter and criminal justice reform advocates, whose work on issues affecting the families of poor and minority children should be a natural fit. This struggle is essentially helping NEA and AFT gain allies who should be supporting systemic reform.

Back in Maine, NEA  gave $231,000 to Mainers for Fair Wages, a group that successfully fought to pass a minimum wage increase contained in Question 4. Thanks to NEA’s help, minimum wage advocates can now take credit for increasing hourly wages for low-skilled workers from $7.50 to $12 by 2020.

Another successful effort came in Colorado, where NEA gave $430,000 to Colorado Families for a Fair Wage, a group that successfully pushed for the minimum wage hike contained in Amendment 70. Thanks to the union’s backing, that group successfully convinced voters to support an increase from $8.31 an hour to $12 an hour within the next four years.

Meanwhile in Houston, NEA gave $50,000 to Houston United, which unsuccessfully fought last year for passage of the Texas metropolis’ anti-gay discrimination ordinance. The measure, which was voted down by 61 percent to 39 percent, according to Ballotpedia, generated national controversy after city officials filed subpoenas demanding copies of five sermons given against the ordinance by local clergy, raising fears of religious discrimination that ultimately led to the measure’s defeat.

None of NEA’s big ballot spends are surprising. As Dropout Nation has reported in the past, the union is a big player in supporting state and local ballot initiatives it favors. This includes donations to the progressive Ballot Initiative Strategy Center, to which NEA gave $380,000 in 2015-2016, and has financed to the tune of $1.1 million between 2010-2011 and 2015-2016. NEA also got help from consultancy TrueBallot, to which it paid $21,887 last fiscal year.

NEA took an even bolder step earlier this year when it voted to devote even more money from its Ballot Measure/Emergency Crisis Fund to fight off reform measures on the ballot in Massachusetts and Georgia, as well as support more-favorable initiatives elsewhere. This meant even more spending on political consultants at the state level. This included dropping $254,663 with Blue State Digital, $356,000 with AL Media (the former Adelstein Liston) on various media messaging, and $58,000 on Big Bowl of Ideas (which is known for its work with minimum wage advocates).

As for NEA’s other political spending? The union spent $60,122 with Mack Sumner Communications for political messaging services, $48,750 with Revolution Messaging for digital ads, $502,503 with Angle Mastagni Matthews for a variety of robocalls, $477,088 with Mission Control Inc., on direct mail, and $70,915 with political consultancy 50+1.

NEA’s biggest single spend was on public relations, dropping $6.8 million with ad giant Interpublic Group’s Weber Shandwick. On public relations, the union spent $585,887 with broadcast publicity outfit Lyons Public Relations, bought $245,450 in services from Dewey Square Group, spent $104,994 with Acadia Consulting, and handed over $24,163 to Camino Public Relations for its services. It also spent $11,351 with Agile Education Marketing, spent $127,013 with Elope on promotional gear, and bought $28,500 worth of media training services from Oratorio. For advertising, it spent $407,602 with Hedrush Agency, a firm ran by “cultural curator” Munch Joseph.

As part of its public relations costs, NEA also spent $25,000 with the National Education Writers Association, the group providing training and other services to journalists covering districts and education agencies. A very helpful way to get before reporters and pundits without having to craft a pitch — and another example of how NEA is truly a corporate entity.

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

December 1, 2016 standard

When it comes to influence-buying, the National Education Association has rarely been especially thoughtful or strategic. The nation’s largest teachers’ union assiduously allies itself with progressive groups, cajoles social justice groups into helping it dress up its agenda, and teams up the notoriously-secretive Democracy Alliance. But it has never been strategic in its spending, especially in focusing on specific cities or states in which locals and affiliates are at risk of losing influence. Nor has it recruited staffers from even-savvier outfits such as the Service Employees International Union. As a result, it has often been less-savvy and less-successful in its gamesmanship than the rival American Federation of Teachers.

But as NEA’s 2015-2016 disclosure to the U.S. Department of Labor, along with campaign finance documents, reveals, the union has stepped up its sophistication in its successful spend against a ballot measure in Massachusetts to expand charter schools.

As you know by now, one of the most-prominent efforts to advance systemic reform fell apart last month when 62 percent of Bay State voters voted down Question 2. Thanks to the defeat, children stuck in failure mills and schools that don’t fit their academic and social needs won’t be able to attend any of the 12 charters that state officials would have been allowed authorize every year.

None of this sat well with reformers who long took for granted that the role of the state’s capital, Boston, as an epicenter and example of successful systemic reform. Given the ideological divide within the movement that has emerged in the past five years, internal finger-pointing, especially from reformers outside the state, is bubbling up. Even before Election Day, Robert Pondiscio, the E.D. Hirsch acolyte who now serves as Thomas B. Fordham Institute President Michael Petrilli’s attack man, complained that centrist Democrat and civil rights-oriented reformers failed to speak the language or address the desires) of suburban voters who saw no point in expanding choice.

Yet no one within the movement paid attention to one of the key reasons behind Question 2’s defeat: The spending, co-opting, and politicking NEA and its Bay State affiliate (along with that of AFT and its locals) did to rally much-needed opposition.

NEA was in a bit of a disadvantage to start. It didn’t have much support for its effort to quash Question 2 from other players among Massachusetts’ labor unions. One possible reason: The expectation that Marty Walsh, the former union leader, charter school founder, and choice advocate who is now Boston’s mayor, would back it. That the measure had strong support from the Bay State’s Republican governor, Charlie Baker, also gave reformers much hope.

But NEA and its Massachusetts Teachers Association had some key advantages going into the political battle — and it started with cold, hard cash. In 2014 and 2015, the NEA affiliate itself spent poured $3 million into its Super-PAC, giving it plenty of money to mount a political onslaught against the measure. More importantly, the union’s strong ties to traditionalist activists on the ground, along with its role as a leading player in Bay State politics, all but ensured that it could rally support against the measure.

Even as the allies such as Hillary Clinton went down to defeat, NEA President Lily Eskelsen Garcia gained one major state-level defensive victory with the defeat of Massachusetts Question 2.

One of the groups: Citizens for Public Schools, a coalition of faith-based groups, old-school education associations, and unions that includes AFT Massachusetts and Boston Teachers Union, as well as longtime vassals of the national NEA’s largesse such as FairTest, the state branch of the NAACP, and the Bay State branch of People for the American Way. Together with Citizens for Public Schools and AFT’s units, MTA formed Save Our Public Schools, which would spearhead opposition from traditionalists and districts (known as school committees in Massachusetts) Question 2.

This is where NEA and its vast coffers came into play. By the end of its 2015-2016 fiscal year, the union plunked down $500,000 into Save Our Public Schools, according to its filing with the Department of Labor. This allowed Save Our Public Schools to put on a scare campaign that featured declarations that Question 2 would cause districts to lose their funding. [Of course, no one opposed to Question 2 considered the ridiculous thinking that districts, along with NEA and AFT affiliates, think they deserve to receive money for children they are no longer serving.]

Over the following months, NEA would leverage its coffers and its Ballot Measure/Emergency Crisis Fun to provide Save Our Public Schools with even more mother’s milk. This included a cash infusion of $3.5 million in October, a month before Election Day, according to the Bay State’s Office of Campaign and Political Finance. Altogether, NEA dumped $5.4 million into Save Our Public Schools, likely its biggest spend on a ballot measure this year. Along with MTA’s $8.4 million in donations, the union accounted for 80 percent of the $17.2 million (including in-kind donations) spent to defeat the measure.

NEA also made sure to provide additional subsidies to MTA. It gave $3.7 million to the Bay State affiliate in 2015-2016, a six percent increase over the previous year. Those dollars were well-deserved. Without MTA and its president, Barbara Madeloni, putting muscle into opposing Question 2, NEA wouldn’t have gained any victory.

As you would expect, AFT and its units also did its part, though it was NEA that did the heavy lifting. The union’s Bay State affiliate dropped $617,949.69 into Save Our Public Schools, while the Boston Teachers Union gave $349,550 to defeat the measure. AFT national dropped $1.7 million into the opposition, as well as contributed $36,115 to the Boston local’s political action committee and $196,506 to that of the state affiliate. More importantly, the union gave financial support to like-minded groups. This included $31,500 to the Boston Youth Organizing Project, $31,250 to Center for Labor Education and Research’s Boston Education Justice Alliance, and $31,250 to Massachusetts Jobs with Justice. All three groups, naturally, endorsed Save Our Public Schools’ fight against Question 2; Jobs with Justice took a step further by contributing $8,000 to Save Our Public Schools.

To tie the effort to expand charters with Wall Street — and win support from progressives who irrationally hate anything tied to capitalism — MTA and AFT Massachusetts filed a complaint with the U.S. Securities & Exchange Commission accusing Baker of backing Question 2 in order to win support from private-equity players who have long been key philanthropists in the school reform movement. The complaint is the epitome of frivolity — the only evidence provided was a commercial the governor did on the referendum — but it was more than enough to give reasons to progressives in the state to turn their backs on children.

All the spending, co-opting and politicking done by NEA and AFT achieved results. By Election Day, reformers lost a potential supporter in Walsh, who took to the pages of the Boston Globe to oppose Question 2. Besides remembering that he runs the traditional district, Walsh also wants to keep his job and doesn’t want to get on the wrong side of the Boston AFT.

Baker’s presence in backing the measure backfired with Bay State Democrats, whose state committee voted to oppose the measure. In the process, the state party, along with U.S. Sen. Elizabeth Warren and the state’s congressional delegation, effectively went to war against centrist Democrat reformers including the state’s powerful house speaker, Robert DeLeo, as well as former U.S. Secretary of Education Arne Duncan and his successor, John King (who founded a charter school in Boston’s Roxbury section).

With all but a few key players within the Democratic machinery opposing Question 2, the measure all but doomed.

The defeat won’t likely stop reformers from working to expand charters. After all, they came close to doing so earlier this year when state senators approved a bill that would have allowed more of them to open in exchange for increased funding for districts. But the defeat at the ballot box, despite outspending NEA and its allies by $9.6 million ($26.8 million versus $17.2 million) hurts reformers to no end. They are now forced to think through how they can build stronger support for school choice, both on the ground and among policymakers who must remember that they depend on NEA and AFT money to keep their phony baloney offices.

As for NEA? The Big Two union’s success in Massachusetts gives it a possible blueprint for beating back reform efforts at the state level, which is especially important in the age of the Every Student Succeeds Act and an incoming Trump Administration and Republican-controlled Congress that will give it less consideration than ever. Whether or not NEA will embrace those lessons — or if they can even be applied in the Republican-dominated states in which most of its affiliates and locals are located — are different questions altogether.

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

November 30, 2016 standard

Yesterday, National Education Association filed its 2015-2016 financial disclosure with the U.S. Department of Labor — and once again, the nation’s largest teachers’ union spent big to preserve its influence over American public education.

NEA spent $138 million on lobbying and contributions to supposedly likeminded organizations during its last fiscal year. That’s a 5.3 percent increase over influence-buying levels in 2014-2015. This, by the way, doesn’t include another $46.5 million in spending on so-called representational activities, which almost always tend to be political in nature; that’s a 16 percent increase over levels in the previous year.

One of union’s key spends was on its own Super-PAC, NEA Advocacy, which was a key player in the Democratic National Committee’s effort to retain the White House and regain control of the U.S. Senate. It poured $12.2 million into NEA Advocacy in 2015-2016, a 40 percent increase over the $8.7 million given to it during the previous fiscal year. As OpenSecrets notes in its most-recent analysis of the Super-PAC’s finances, NEA funneled most of that money in it to other Super-PACs and 527 committees. This included $300,000 to American Bridge 21st Century (another recipient of NEA funding), and $774,670 to Kentucky Family Values, which unsuccessfully fought to stop Republicans from winning control of the Bluegrass State’s legislature.

As you would also expect, NEA also poured money into Democracy Alliance, the ever-the secretive progressive outfit which has become a major player in national and Democratic Party politics. NEA Executive Director John Stocks chairs the organization’s board of directors. The union gave $1.6 million to the outfit, its Committee on States, and its State Engagement Fund in 2015-2016, a seven-fold increase over the previous fiscal year. Given how poorly Democrats performed this election cycle, you can conclude this was money not well spent.

Meanwhile NEA spent plenty on other outfits within the wider Democracy Alliance network. It poured $200,000 into David Brock’s Media Matters for America, ladled out $225,000 to Progress Now, put $187,654 into the Advancement Project (which has been a partner with NEA and AFT in opposing systemic reform), and handed out $25,000 to longtime beneficiary Netroots Nation. NEA also spent $627,543 with Catalist, LLC, the data-mining outfit for the Democratic National Committee that is a lynchpin in Democracy Alliance’s campaign efforts. Again, in light of Democratic Presidential Nominee Hillary Clinton’s defeat at the hands of Donald Trump this month, NEA may need to reconsider where it spends its cash.

The biggest recipient within the Democracy Alliance network is Center for Popular Democracy, whose board includes American Federation of Teachers President Rhonda (Randi) Weingarten. NEA gave the outfit and its political action fund $591,350 in 2015-2016, a 3.7 percent increase over the previous fiscal year. [AFT itself gave the outfit $373,000 during its last fiscal year.] That’s more money to help NEA and AFT in their effort to oppose the expansion of public charter schools and other forms of choice.

Meanwhile NEA continued to co-opt progressive and social justice groups in its effort to defend the policies and practices that finance its operations. For NEA, the dollar amounts to each group can often be small compared to its annual revenue. But for the recipient groups, many of which are always cash-strapped and dependent on the kindness of bigger players, the dollars often influence the direction of their advocacy. Why? Because philanthropic groups and unions such as NEA prefer to finance programmatic activities such as advocacy rather than subsidize the organization’s administrative and other back-office operations; often, programmatic staff will keep their jobs even as nonprofits lay off other staff. As a result, NEA can ensure that its vassals do its bidding.

The union doled out $140,000 to Center for Media and Democracy, the outfit behind PR Watch and ALEC Watch, the latter of which is likely favored by the union since it focuses on the conservative state policymaking outfit. It also gave $100,000 to the Progressive Inc, the parent of the news outlet that counts Jeff Bryant of Campaign for America’s Future (a longtime NEA dependent) and Julian Vasquez-Heilig among its contributors. That’s plenty enough for freelance fees to put into the pockets of Bryant, Vasquez-Heilig and their fellow-travelers. The union also handed another $50,000 to Independent Media Institute, the parent of progressive media outlet Alternet.

The union gave $148,800 to Change Corps, which provides training to progressive activists, provided $65,000 to the Tides Foundation’s Advocacy Fund, and handed off $35,000 to the Opportunity Institute. NEA also gave $75,000 to Convergence Center for Policy Resolution, and $25,000 to Center on Budget and Policy Priorities.

NEA put $550,000 into Sixteen Thirty Fund, a endowment developed by former Clinton Administration mandarin Eric Kessler’s Arabella Advisors. NEA also gave $62,657 to New Venture Fund, another outfit with ties to Kessler. Working to stop efforts by reformers and pension reform advocates to address virtually-insolvent retirement plans, NEA also gave $160,000 to National Public Pension Coalition. The union put $397,500 into America Votes, the progressive group whose “partners” include AFT and Center for Popular Democracy’s action fund; handed $135,000 to Campaign for America’s Future; ladled $100,000 to Corporate Action Network; and gave $50,000 to New York Communities for Change, a longtime beneficiary of rival union AFT’s largesse.

NEA even gave $125,000 to Center for American Progress — even though it is one of the foremost players in the school reform movement. It helps that the latter is key to the Democracy Alliance network of nonprofits and political action outfits.

For the first time in two years, NEA didn’t give any money to Schott Foundation for Public Education and its political action fund. Given how little mileage the union got from working with the once-respectable advocate for transforming education for young black men, it’s probably for the best. Rev. Al Sharpton’s National Action Network, Jesse Jackson’s Rainbow/PUSH Coalition, and old-school civil rights group NAACP (which managed to garner publicity favorable to union with its resolution calling for a moratorium on the expansion of charters) also didn’t collect a check from NEA for the first time in quite a while.

Meanwhile NEA worked on co-opting other minority advocacy groups. It gave $65,000 to the Congressional Black Caucus Foundation, the philanthropic arm of the coalition of African-American members of Congress; put $94,000 into the Congressional Hispanic Caucus Institute, which serves the same role for Latino members; and gave $15,000 to MALDEF. The union also gave $20,000 to Institute for Asian Pacific American Leadership and Advancement, and put $5,000 into National Council on Educating Black Children. Building ties with gay, lesbian and transgender activist groups, NEA gave $50,000 to Human Rights Campaign, and $50,000 to Gay Lesbian and Straight Education Network.

It even managed to give $50,000 to Smithsonian Institution for the newly-opened National Museum of African-American History and Culture. That was a very smart thing to do, one that some reformers should have also done.

Meanwhile NEA is looking to build support among teachers and families for its agenda. It gave$12,460 to the National Network of State Teachers of the Year, allowing the union to take advantage of the popularity of teachers (and avoid the general disdain toward it and AFT). Another $36,700 was given to the National Teacher Hall of Fame, while $86,242 went to Institute for Education Leadership. Meanwhile NEA gave $150,000 to Parents Together Action, an outfit that is attempting to co-opt the Parent Power movement; while it put down $61,031 to Parent Teacher Home Visit Project.

As for the usual suspects: NEA gave $50,000 to FairTest (also known as National Center for Fair and Open Testing), the leading outfit in opposing the use of standardized tests, the data from which can be used in evaluating the teachers in NEA’s rank-and-file. It also gave $250,000 to the National Education Policy Center through the University of Colorado-Boulder’s foundation. It provided $398,000 to National Board for Professional Teaching Standards; poured $397,036 into Council for Accreditation of Educator Preparation, the group that represents the nation’s woeful university schools of education; put $395,120 into Barnett Berry’s Center for Teaching Quality; and handed off $275,000 to the Republican Main Street Partnership and its Main Street Advocacy Fund.

NEA gave $250,000 to Economic Policy Institute, while handing $100,000 to its other go-to research ally, Great Lakes Center for Education Research and Practice. The union also gave $114,000 to Learning First Alliance, and put $150,227 into Education Law Center.

What about NEA’s top brass? The union’s president, Lily Eskelsen Garcia, collected $512,504 in 2015-2016, a 23 percent increase over the previous year; she can get herself some new Gretsch Chet Atkins. Her number two, Becky Pringle, was paid $434,738, a 17 percent increase; while Secretary-Treasurer Princess Moss pulled in $436,423, a 1.5 percent gain. Altogether, NEA’s top three leaders collected $1.4 million in 2015-2016, a 17 percent increase over the previous fiscal year.

As we say at Dropout Nation, there is nothing wrong with NEA leaders drawing six-figure sums. But the high salaries (and the corporate ways the NEA and the AFT engage in their defense of traditionalist policies and thinking) should be kept in mind any time Eskelsen Garcia and AFT counterpart Weingarten use class warfare rhetoric to oppose systemic reform of American public education.

As for the union’s staff? Some 403 staffers (out of 556 on the payroll) were paid six-figure sums in 2015-2016; that’s eight more than in the previous fiscal year. One person collecting big checks is Stocks, whose being an NEA staffer is lucrative work. Whether the teachers who are often forced by compulsory dues laws to pay those salaries are benefiting is a different story. $469,501 in compensation is 15.3 percent higher than in 2014-2015. The union’s general counsel, Alice O’Brien, picked up $255,603, a 5.3 percent increase over the previous year; while top lobbyist Marcus Egan collected $193,407, a 6.3 percent increase. As always, being an NEA staffer is lucrative. Whether the teachers, often forced by compulsory dues laws to pay those salaries, are benefiting is an open question.

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

November 29, 2016 standard

There is little good news these days for the New York State United Teachers, the financially-strapped state affiliate of the American Federation of Teachers and National Education Association.

Last week, the Empire State’s education department announced that it wouldn’t bow to the union’s demands to reduce time for the battery of reading and math exams from three to two days, defeating its long-term goal of getting rid of the objective data that can be used to measure school (and eventually, teacher) performance. Earlier this month, a judge in Erie County ordered NYSUT to explain why it was violating state campaign finance laws when it gave $700,000 to New Yorkers for a Brighter Future, a political action committee whose treasurer is longtime union top executive Andrew Pallotta, to help Democrats in their unsuccessful effort to capture a state senate seat — and end Republican control of the legislative body.

Meanwhile the union’s effort to bolster its influence over education policy in the Empire State — one that has succeeded in the past couple of years — was blunted as other candidates it backed for the state senate such as Adam Haber, a school board member running for an open seat, lost big time. With Republicans retaining control of the upper house, NYSUT will have to hope that Gov. Andrew Cuomo — whose desire and willingness to advance systemic reform has waned significantly since embarking on his second term — can continue to do its bidding.

But NYSUT has bigger problems on its balance sheet — and, as it reported yesterday in its annual filing with the U.S. Department of Labor, it starts with its ever-growing pension and retirement liabilities.

The union reported that it accrued $503 million in retirement liabilities in 2015-2016, a 31 percent increase from the $383 million it reported in the previous fiscal year. This includes $288 million in pension liabilities (a 23.6 percent increase over 2014-2015), and $215 million in retiree health obligations (an increase of 43 percent over the previous fiscal year).

If NYSUT were to land in bankruptcy, the union would have just $125 million in assets to cover $415 million in liabilities. Essentially, it would owe $290 million more to its retirees and other creditors than it could ever pay back. Put bluntly, the union is virtually insolvent.

Certainly NYSUT’s retiree obligations are covered by some $24.5 million in investments and U.S. Treasury securities. But that doesn’t even cover a tenth of its insolvency. More importantly, like state and district-run defined-benefit pensions that NYSUT, along with other AFT and NEA affiliates, defend, the capital markets have been in the doldrums; the value of the investments barely budged from levels in 2014-2015. So there’s no way that NYSUT can grow its way out of bust.

The good news for NYSUT is that it added 11,176 rank-in-file in 2015-2016 (to 651,594), a 1.7 percent increase over the previous year. But as with last year, the good news comes with some dark clouds. Most of the growth came in the form of retirees who no longer work in classrooms; the number of retirees paying into the union increased by 2.9 percent in 2015-2016 versus a two percent increase in so-called in-service (or working) rank-in-file. Since retirees pay less into NYSUT coffers than classroom teachers, this means the union is garnering less money. Meanwhile the growth in those categories was offset by a 15 percent decline in rank-in-file from “special constituency groups” and an 8.2 percent decline in agency fee payers, whose dollars are used by the AFT affiliate for its political activities even though they are technically not supposed to be.

Partly as a result of the growth, stilted as is was, NYSUT’s dues collections increased by 5.6 percent over 2014-2015 to $133 million. Overall revenue for 2015-2016 was $258 million, a 4.9 percent increase. The national AFT provided $11.8 million in subsidies to the affiliate, a 15 percent increase over 2014-2015, while NEA subsidized the union to the tune of $2.2 million, a 10 percent increase over the previous year. NYSUT also generated $1.7 million from its Teaching & Learning Trust, a 19 percent decline over 2014-2015; while its Member Benefits affiliate, which like the one operated by AFT, peddles annuities and insurance plans to its members, generated $7 million in revenue, a nine percent decline over the previous fiscal year.

As for the bottom line? NYSUT generated $14.2 million in surplus in 2015-2016, a nearly four-fold increase over the $3.8 million in surplus generated in the previous year. This is the fourth straight year NYSUT has been in the black despite spending slightly more in 2015-2016 than it did last year. Those subsidies from AFT and NEA, along with a 2.8 percent increase in dues paid by classroom teachers to the state affiliate, definitely helped the bottom line.

Since NYSUT isn’t putting much of its money toward paying down its pension liabilities, it is spending it on influence-buying. The union spent $99.6 million in 2015-2016 on lobbying, contributions to like-minded groups and spending on almost-always political “representational activities”. This is a 1.8 percent decrease over the previous fiscal year.

Among the beneficiaries of NYSUT’s largesse: Alliance for Quality Education, which has long been a reliable vassal of the affiliate and the parent national union. It collected $67,500 from the union last fiscal year, little more than half of what it received in 2014-2015. Citizen Action of New York, another key vassal, received even less from NYSUT; the $60,720 it received in 2015-2016 is 78 percent less than what it received in the previous year. Strong Economy for All Coalition, which counts Citizen Action and AQE as key players, garnered $250,000 from the union (or half of the money it got in 2014-2015), while Education Law Center picked up $50,000 (or 50 percent less than its subsidy from the union in the previous fiscal year).

As for the Working Families Party, the progressive political outfit whose standardbearer, Zephyr Teachout, strongly challenged Cuomo during his re-election bid two years ago? It collected $50,000 from the union, a 20 percent increase over the previous year. The Fiscal Policy Institute, another NYSUT vassal, collected $146,000 from the union in 2015-2016, a 14-fold increase over the previous year.

As in 2014-2015, most of NYSUT’s political spending went to advertising and messaging. It spent $232,500 with Visuality on ads and social media activity, spent another $1.5 million with Shorr Johnson Magnus, and dropped $124,733 with Lamar Companies on billboards. Working the national AFT’s ties with both the Democratic Party and the ever-secretive Democracy Alliance, the union also spent $33,150 with the coalition’s data outfit, Catalist LLC.

On the public relations front, NYSUT spent $16,350 with flack outfit City& State, and $14,000 with Campbell & Associates. Both spends are considerably less than in 2014-2015. NYSUT’s biggest public relations spend was on the United Federation of Teachers’ Teacher Union Day reputation-repair effort; the union gave $1.4 million to the campaign.

The Teacher Union Day effort was part of NYSUT’s $15.5 million in subsidies to the Big Apple local; this is a 13 percent increase over 2014-2015. The increase proves that UFT’s effective takeover of the affiliate last year, in which it ousted longtime president Richard Iannuzzi and replacing him with the more-agreeable Karen Magee, is working well for the nation’s largest local and its ambitious president, Michael Mulgrew. NYSUT also helped AFT national meet its goals by pouring $436,429 into its Northeast Region Organizing Project.

Oddly enough, as part of its political activities, NYSUT also spent $137,543 with temporary staffing outfit TrueCorps, which works with progressive outfits to provide campaign workers without putting those people onto payroll (and thus, avoiding full-time hires and their healthcare costs). This should go down really well with other unions and activists who have pushed against the use of temp staffing by private-sector firms looking to avoid full labor costs.

As for the honchos: NYSUT President Karen Magee collected $294,729 in 2015-2016, a 2.4 percent increase over the previous year, while Pallotta, who essentially controls the union on behalf of UFT, collected $259,351, a 1.4 percent increase. Executive Director Thomas Anapolis was paid $245,548, a 3.6 percent increase over his compensation in 2014-2015.

NYSUT’s political fortunes are okay for now even as it remains virtually insolvent. But that may not last for long. Donald Trump’s successful campaign for the American Presidency portends the likelihood of a U.S. Supreme Court appointee who will likely rule in favor of ending the ability of the affiliate and its parent unions to forcibly collect dues from teachers regardless of their desire for membership. There is already talk of a revival of a tort similar to the Friedrichs vs. California Teachers Association, which became moribund earlier this year after the death of Supreme Court Associate Justice Antonin Scalia led to a split-decision by the panel. If this happens, NYSUT will have to actually convince teachers to finance its operations. And that will bring its pension woes even more to the forefront.

You can check out the data yourself by perusing the HTML version of the New York State AFT’s latest financial report, or by visiting the Department of Labor’s Web site.

Featured photo: NYSUT President Karen Magee (at July’s Democratic National Convention) presides over an AFT and NEA affiliate facing financial and political uncertainty.

September 29, 2016 standard

Earlier today, Dropout Nation reported on the American Federation of Teachers’ 2015-2016 financial disclosure to the U.S. Department of Labor. As you would expect, the nation’s second-largest teachers’ union spent big on influencing Democratic presidential nominee Hillary Clinton and her apparatchiks, as well as pouring heavily into what should be like-minded advocacy and nonprofit groups.

But AFT’s big spending doesn’t just end with political campaigns and co-opting minority as well as hardcore progressive groups. The union even spends big on its own staff and operations.

Start with AFT President Rhonda (Randi) Weingarten, whose paychecks put her in the top five percent of the nation’s income earners even as she engages in class warfare rhetoric. The union paid Weingarten $497,311 in 2015-2016, just a couple hundred dollars more than she pulled down in the previous year.

Also well-paid by the union is Loretta Johnson, who serves as its secretary-treasurer; her $358,225 in 2015-2016 was a grand or so higher than in the previous year. Meanwhile Mary Catherine Ricker, the former Saint Paul Federation of Teachers boss who now serves as the union’s number two (and in the process, serving as an obstacle to United Federation of Teachers boss Michael Mulgrew’s ambitions to succeed Weingarten as head of the national union), was paid $311,311, a 5.4 percent increase over her pay in 2014-2015.

Altogether, the AFT’s top three leaders collected $1.2 million last fiscal year, a slight increase over the $1.1 million paid to them by the union in 2014-2015.

Also making bank are AFT’s staffers, though there are slightly fewer of them this time around. Two hundred twenty-two staffers earned more than $100,000 in 2015-2016, seven fewer than the 229 in the previous year. Three out of every five staffers at AFT national headquarters earn six-figure sums. Among the union’s high-paid mandarins: Michelle Ringuette, the former Service Employees International Union staffer who is now Weingarten’s top assistant, made $230,736, while Michael Powell, who serves as Weingarten’s mouthpiece, earned $240,647. Kristor Cowan, the AFT’s chief lobbyist, earned $186,293, while Kombiz Lavasany, another operative who oversees Weingarten’s money manager enemies’ list, earned $184,158.

Supporting these high salaries is an ever-declining rank-and-file base. AFT counts 675,902 full-time rank-and-filers on its roster in 2015-2016, a 3.4 percent decline over the 699,739 members on the roster in the previous fiscal year. [Dropout Nation does not call them members because in  nearly every case, AFT and its affiliates use state laws to force teachers to join.] This marks the third straight year of declines and the fifth year of decline within the past six.

The union also experienced a 1.5 percent decrease in the number of half-time rank-and-filers (or school employees making less than $18,000 a year); a seven percent decline in one-quarter rank-and-filers (nurses and state government employees whose unions are affiliated with AFT); and a 2.7 percent decline in the number of one-eighth rank-and-filers. Seems like the union’s once-successful effort to strike affiliation deals with nursing and other government employee unions, an effort that put it in competition with the much-larger Service Employees International Union, has fallen to seed.

Even worse for AFT: Its effort to increase the number of so-called associate members who pay directly into national’s coffers, continues to be in free-fall. AFT counts just 49,984 such members on its rolls in 2015-2016, a 14.5 percent decline over the previous year. This shouldn’t be shocking. After all, AFT cannot provide associate members any real assistance in terms of negotiating teachers’ contracts or addressing work rules. Besides, the associate members can’t even vote in union elections.

As a result of these declines, AFT’s counts just 1.5 million rank-and-filers and voluntary members, a 4.3 percent decrease over the previous year.

The good news for AFT is that the death of U.S. Supreme Court Associate Justice Antonin Scalia earlier this year assured that there was a tie vote on Friedrichs vs. California Teachers Association; his vote would have likely led to the overturn of Abood v. Detroit Board of Education, the five-decade-old ruling that gives AFT the ability to compel teachers pay dues regardless of their desire for membership. As your editor noted two years ago, 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 good news for AFT is that it hasn’t affected revenue. The $192 million in dues and other agency fees (in the form of a so-called per-capita tax collected from locals and affiliates) generated by the union in 2015-2016 is 21 percent higher than in the previous fiscal year. AFT’s overall revenue of $328 million (including loan proceeds) is unchanged from 2014-2015.

This time around, the union didn’t have to borrow as heavily as it has in previous years to keep operations afloat; it borrowed just $55 million in 2015-2016, half the level of borrowing in the previous year. Overall, the union has borrowed $477 million over the past five years. The union did sell more of its investments in order to make due; the union sold $29 million of its portfolio in 2015-2016, more than double the investment sales in the previous year. Without the loans and investment sales, AFT’s revenues were just $244 million, a 15 percent increase over levels in 2014-2015.

But the bad news is that AFT may still lose revenue. One reason: The abolishing of collective bargaining and forced dues collections in Wisconsin, Tennessee, and Michigan. This has resulted in AFT losing teachers who realize that they don’t have to pay into unions that don’t represent their interests.

Another problem for the union: More of its affiliates and locals are either merging with those of the National Education Association or striking affiliation agreements with it. Membership declines forcing such mergers is one reason. But as seen in California, where the AFT’s United Teachers Los Angeles has struck a joint affiliation deal with NEA, the AFT’s larger locals are realizing that such triangulation gives them stronger influence over education policy at state and local levels.

But the gains for the big locals (who honestly don’t need AFT affiliation anyway) means both lost revenue for AFT as well as the ability to keep locals from straying away from the party line. [There’s also that pesky matter of being forced into a merger with NEA, a matter long-discussed among hard-core traditionalists.] Given the rancor from AFT rank-and-filers over strong-arm moves by national to remove wayward leaders in locals such as Detroit, expect more large locals to strike joint affiliation agreements or even break away from the national union in the near-future.

The consequences of efforts to abolish collective bargaining and joint affiliations by locals don’t just hurt AFT’s ability to use money to preserve influence. It also harms its ability to pay for the high costs of employing so many six-figure staffers.

While benefit costs have barely budged (remaining at $17 million), AFT’s general overhead costs increased by 4.8 percent within the past year. The good news for AFT is that it was able to offset some of those expenses with a 10.8 percent decrease in so-called union administration expenses. Meanwhile AFT’s post-retirement obligations increased by six percent (to $38 million) in the past year.

Luckily for the AFT, its staffers and leaders pay into definedcontribution retirement plans used by the rest of the private and nonprofit sectors. A funny thing given its opposition to efforts by school reformers and others to move away from the virtually-insolvent defined-benefit pensions championed by Weingarten and the union. Hypocrisy is like that sometimes.

Dropout Nation will provide additional analysis of the AFT’s financial filing in the coming days. 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 Teachers Union Money Report, for this and previous reports on AFT and NEA spending.