If you want to know why the United Federation of Teachers is pushing New York State legislators to enact a class size reduction initiative (and pass a $900 million-a-year property tax increase to pay for it), just look at the union’s 2013-2014 financial disclosure to the U.S. Department of Labor filed last month. For the American Federation of Teachers affiliate, reducing class size and the teacher hiring spree that would accompany it is key to boosting the slowdown it is experiencing after a decade of strong growth in revenue and rank-and-file membership.
The nation’s largest teachers’ union local generated $136 million in dues in 2013-2014, a mere 2.2 percent increase from the previous fiscal year. This is slower than the 3.9 percent annual growth in dues UFT experienced between 2005-2006 and 2012-2013. One reason: The union’s membership declined slightly between 2012-2013 and 2013-2014 (from 124,145 members to 124,069 members), after a 17 percent increase between 2005-2006 and 2013-2014.
UFT did add 2,109 retired members paying dues in 2013-2014, leading to a 3.5 percent increase in retired members paying dues into its coffers over the previous year. But given that the average UFT retired member pays as much as $27.06 a month in dues every month (based on Dropout Nation‘s analysis of salary data from the Teachers Retirement System of New York), or little more than one-quarter of the $101.46 paid monthly by the average teacher in the union’s rank-and-file, it needs more full-time teachers and other school employees on the city’s payroll to grow its revenues without increasing dues.
In the unlikely event that Empire State legislators moved to pass the UFT’s proposal, it would likely lead to an additional 10,000 teachers on New York City’s payroll (based on the union’s proposal to reduce class sizes from 25 students per teacher to 15), which would increase the 73,373-teacher staff by another 13.7 percent. [Dropout Nation revised the original estimate downward as part of its own due diligence.] Considering that the evidence shows there is little correlation between class-size reduction and improvements in student achievement — as well as the reality that such a hiring spree would exacerbate the Big Apple’s massive pension insolvency (which is $32 billion based on Dropout Nation‘s latest analysis) that taxpayers already struggle to bear — the UFT’s class-size reduction plan does little for children for the short- and long haul. It won’t even be a benefit to teachers, especially high-quality instructors already dealing with the consequences of low-quality teaching among their worst colleagues. But for UFT, that’s another $12.2 million a year in much-needed revenue — which would lead to $24.4 million in revenue it would collect annually from teachers teaching kindergarten through third grade classes. And for the union, which has done plenty to ignore the wishes of its rank-and-file, the cash is what matters most.
Meanwhile there are other reasons why UFT needs more teachers and more money. Start with its pension and retiree healthcare liabilities. The union reported an accrued pension liability of $27 million in 2013-2014, a 39 percent increase over the previous year. [This, by the way, is still lower than the $42 million it owed in 2011-2012; how it managed to whittle those liabilities down by nearly half is an accounting trick Dropout Nation is figuring out.] UFT also reported post-retirement health liabilities of $25.3 million, a five percent decline from the previous year; this is also lower than the $30 million in liabilities it reported two years ago. Altogether, the AFT local must pay down $52 million in retirement liabilities. Luckily for UFT, it has $139 million in assets, some of which can be liquidated quite easily to pay down those liabilities if needed.
There’s also the fact that UFT’s other sources of revenue are in decline. The union’s overall revenue of $164 million in 2013-2014 is 14 percent lower than its revenue in the previous year. It generated a mere $2.3 million in loan repayments last fiscal year, a 93 percent decline from levels during the previous fiscal year. UFT also collected just $15.2 million in subsidies from the New York State United Teachers, the AFT affiliate of which it essentially regained control last year with the ouster of now-former president Richard Iannuzzi; that is slightly lower than in 2012-2013. A teacher hiring spree by the Big Apple district means more dollars into UFT’s coffers.
Finally, there is the fact that the AFT local is spending more on political activities. It spent $31 million on lobbying (including so-called representational activities that include political spending alongside arbitration and other unionizing expenses) in 2013-2014; this is an 18.3 percent increase over spending in the previous fiscal year. The local’s political spending increased by 35 percent over the past two years.
Among the biggest beneficiaries of UFT’s largesse: New York Jobs Now, a coalition of businesses and unions that worked to win voter support for a referendum allowing casino gambling in the Empire State; it picked up $125,000 from the union last fiscal year. Strong Economy for All Coalition, a cadre of public-sector unions and progressive outfits whose members include Citizen Action, along with AFT vassals New York Communities for Change and Alliance for Quality Education, also collected $150,000 from the union; UFT is likely the second-biggest donor to the group after NYSUT (which gave the group $259,150 during its 2013-2014 fiscal year).
The NAACP’s New York State unit, whose misadventures in backing UFT’s efforts have been well-documented on these pages, picked up $12,800 from the union, while Rev. Al Sharpton’s National Action Network collected $25,000 from the union as part of the deal he struck with UFT President Michael Mulgrew to back its efforts to oppose teacher quality reforms that benefit black children in exchange for the union’s internally controversial support for addressing police brutality. UFT gave $5,000 to the publishers of Dissent, the progressive magazine.
The ever-reliable New York Communities, which along with AQE, helped UFT and AFT target news anchor-turned-school reformer Campbell Brown last year, picked up $25,000 from the union. The Black Institute, which is run by former ACORN honcho Bertha Lewis, received $30,000, while the W.E.B. Du Bois Scholars Institute at Princeton University, which recruits and develops young black leaders, picked up $20,000 in AFT local ducats. Looking to bolster ties with Latino and black community players, UFT also poured $11,500 each into the committees running the Big Apple’s Puerto Rican Day and West Indian parades, while giving $5,000 each to two churches, Thessalonia Baptist (in the Bronx) and Union United Methodist (in Brooklyn).
Meanwhile UFT spent plenty of money with scandal-plagued political operatives. It purchased $35,000 in consulting services from Time for a Change Foundation, whose boss, Musa Moore, has ties to the notoriously-corrupt former New York City Democratic party boss Clarence Norman. The AFT local also spent $50,632 with the Advance Group and its front operation, Strategy Consultants; both have been under federal investigation since it was revealed last year that Advance set up Strategy Consultants so that it could get around campaign finance laws barring it from doing work for both UFT and individual political campaigns (including that of Bill Thompson, the longtime Big Apple politician who was backed by UFT in his unsuccessful campaign for the Democratic mayoral nod against eventual winner de Blasio). Beyond less-than-savory politicos, UFT spent $12,000 with political consultant Brendan Kelly (whose past clients include New York City Speaker Melissa Mark-Viverito and Connecticut Gov. Dan Malloy).
As for UFT’s salaries? Mulgrew pulled down $281,223 in 2013-2014, a 4.5 percent increase over the previous year. The union’s secretary and treasurer, Michael Mandel and Melvin Aaronson, collected no compensation in those roles; but Aaronson was paid $72,206 (9.4 percent more than in 2012-2013) while serving as one of the union’s special representatives. Richard Riley, who is the public relations boss for UFT, was paid $192,533, a 2.6 percent increase over 2012-2013.