Dropout Nation

This hasn’t been a great year for the American Federation of Teachers — and this goes double for its Empire State affiliate. Over the past year, the New York State United Teachers has been through a power struggle between the faction led by now-former President Richard Iannuzzi and a coalition that included United Federation of Teachers President Michael Mulgrew; has seen its influence decline even further as Republicans regained control of the state senate in spite of its efforts; and was told in no uncertain terms by Gov. Andrew Cuomo after winning re-election (in spite of it snubbing him) that the union would have to bow to the governor’s school reform agenda.

But as the AFT affiliate’s 2013-2014 filing with the U.S. Department of Labor shows, it faces an even more-precarious financial future, especially as it struggles with unfunded pensions and retiree healthcare benefits.

NYSUT reports that it has accrued $380 million in retirement liabilities in 2013-2014, a 25 percent increase over levels in the previous fiscal year. This includes $238 million in pension liabilities, (26 percent increase within the last year), and $117 million in retiree health liabilities (a 28 percent increase over 2012-2013). This is an 84 percent increase over the $214 million in retirement liabilities on the AFT affiliate’s books in 2009-2010. The higher liabilities explain why it spent $42 million on employee benefits this past fiscal year, almost double the $42 million spent five years earlier. With just $107 million in assets, and owing $313 million more than it can cover, NYSUT is virtually insolvent.

The good news for NYSUT is that it added 15,340 members in 2013-2014, a 2.6 percent increase. But the news isn’t as good as it may seem. The AFT unit only added 1,000 new members among classroom teachers (from 387,476 to 378,476). Most of the growth came from the addition of 12,608 members in so-called special constituency groups; just 55 such members were on the rolls a year earlier. That these members likely pay less in dues than teachers can be seen in the fact that NYSUT’s revenue increased by a mere 2.1 percent to $241 million last fiscal year. As for the bottom line? NYSUT generated a $3.8 million surplus, the second consecutive year it has brought in more than it spent. This can be attributed to a 5.2 percent decline in general overhead and a slight reduction in union administration costs.

But as Dropout Nation noted last year, NYSUT cannot survive on its own without the help of AFT and the National Education Association (to which the union is also affiliated). AFT subsidized NYSUT to the tune of $12.1 million in 2013-2014, unchanged from the previous year, while NEA provided $1.9 million in subsidies, a slight increase from the $1.8 million given in the previous year. Particularly for AFT and its president, Rhonda (Randi) Weingarten, propping up the unit is critical to keeping New York under its sphere of influence. The New York State AFT also earned $6.3 million from its Member Benefits affiliate, which like the one operated by AFT, peddles annuities and insurance plans to its members, an 18 percent decrease over previous year. The union’s Teaching & Learning Trust, another revenue contributor, brought in $3 million, a 52 percent increase over 2012-2013.

NYSUT second-in-command Andy Pallotta got a sweet payday for his successful effort with UFT President Michael Mulgrew to oust longtime union boss Richard Iannuzzi

The subsidies, along with the compulsory dues, allowed NYSUT to devote $96 million (including almost always-political representational activities) in 2013-2014, a one percent increase over the previous year. Among usual suspects, it gave $150,000 to Alliance for Quality Education, who, along with New York Communities for Change, put together a Web site, Twitter feed, and 10-page report (if you can call it that) targeting former CNN anchor-turned-school reformer Campbell Brown; New York Communities got $25,000 from the union, and the New York State Labor-Religion Coalition received $59,769. Education Law Center also received $50,000 from NYSUT, while New Yorkers for Fiscal Fairness received $60,000. The union also kicked up $455,217 to AFT national’s Northeast Region Organizing Project; and subsidized UFT to the tune of $14.2 million, a two percent decrease over 2012-2013.

NYSUT gave $200,000 to Citizen Action of New York’s Public Policy and Education Fund; $30,000 to VOICE-Buffalo, which is convening a task force on education in the Upstate New York city; and $20,000 to People for New York – Progressive Agenda. The union gave $259,150 to Strong Economy for All Coalition, a cadre of public-sector unions and progressive outfits whose members include Citizen Action, AQE, and New York Communities; it also dropped $100,000 into the coffers of Working America, the Washington, D.C.-based labor advocacy outfit controlled by AFL-CIO.

The union’s single-biggest single political spend was on its VOTE COPE political action committee, which received $781,980 from its coffers; the PAC itself spent $4 million during this past election cycle to back Democrat candidates for state senate seats and take sole control of the Empire State’s upper house. This included mailers that attempted to the state Republican Party’s opposition to abortion to promoting domestic violence against women. That mailer ended up arousing the ire of Senate Republicans such as Mark Grisanti, who is championing a bill that would create voucher-like tax credits to expand school choice.

Gov. Andrew Cuomo and Republicans in the Empire State’s senate are ready to give NYSUT a few lessons in payback.

As a result of that blunder, along with the failure of NYSUT (as well as New York City Mayor Bill de Blasio) to help Democrats take control of the state senate, the union’s political spending turned out to be a waste of money. Sure, the AFT affiliate did manage to convince the legislature to pass a bill delaying the use of test score growth data from Common Core-aligned tests. But the Empire State is still proceeding with its implementation of the standards, which NYSUT now opposes, and has no allies among either AFT national or UFT (whose president, Mulgrew, has threatened to punch out those who oppose them). And now, with both Cuomo and Senate Republicans ready to settle scores — and Education Commissioner John King more-powerful than ever despite a vote of no-confidence by the union earlier this year — NYSUT is even weaker than ever.

This isn’t to say that NYSUT won’t have considerable influence in Albany. After all, the state assembly remains in Democrat control, and its speaker, Sheldon Silver, will oppose anything other than the most-modest reform efforts. But the governor wields plenty of power as do King and the state Board of Regents; so NYSUT has embraced tactics that have alienated itself at a most-critical juncture. More importantly, it is clear that the dollars that the union could have used to elevate teaching by providing high-quality professional development services members desire (as well as by advocating for teacher quality reforms that help high-quality teachers) have now been spent into oblivion.

But at least NYSUT’s current and former leaders can say they continue to pay themselves well on the dime of teachers forced to pay into its coffers. Former NYSUT President Richard Iannuzzi  collected $291,124 in 2013-2014, a 5.7 percent decline from the previous year, while Karen Magee (who was essentially made Iannuzzi’s replacement by Mulgrew) was paid $140,363, quadruple the $36,757 she earned the previous year as a board member. Executive Director Thomas Anapolis was paid $223,242, a 9.2 percent increase over last year; while Andrew Pallotta, the NYSUT executive vice president (and UFT representative) who instigated the coup against Iannuzzi, collected $245,429, a slight bump up from the $243,305 he was paid in 2012-2013.

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.