House Votes to End Dues Check Off Benefit for NCAE

Late last night, amidst legislative maneuvering and name calling, House Republicans overrode Governor Perdue’s veto of SB-727 and voted to stop the state from collecting membership dues from public school employees.  Two Democrats (Rep. William Brisson – Bladen and Rep. James Crawford – Granville) joined with 67 Republicans in supporting the override.

The legislation, sponsored by Sen. Ralph Hise (R-Mitchell), passed the House and Senate last spring. It prohibits the state from collecting dues from active and retired public school employees.  Since the early 1990s the state has provided the service to the state’s largest teacher association, the North Carolina Association of Educators (NCAE).  While the statute does not specifically reference NCAE, it is clear NCAE is the only employee association that “has at least 40,000 members, the majority of whom are public school teachers.”   NCAE has approximately 60,000 members. Most of these members are public school teachers although other public school employees can also join.

The state currently administers dues check off options for several large employee associations including the State Employees Association of North Carolina (SEANC), the Teamsters, the Public Service Workers’ Union and the North Carolina Association of Educators (NCAE). The deduction allows these organizations to quickly provide hundreds of thousands of dollars in benefits to organizational executives and membership.

Is SB 727 Good Public Policy?

NCAE has criticized Republican lawmakers for singling out the organization. However there are strong reasons for approving prohibitions on dues check off benefits.

Unions and Employee Associations Have Helped to Drive Up Costs of Education
Since 1970 the inflation-adjusted national average cost of putting a child through the K-12 public school system rose from $55,000 to $155,000. Over the same period the quality of that education has stagnated in math and reading and declined in science. Much of the increase in costs can be attributed to the impacts of teachers unions in raising salaries and increasing the number of union or employee association contracts.[1]

Where’s the Money Going?

Membership dues generate considerable revenue for NCAE and the National Education Association (NEA is the parent affiliate of NCAE, and is an actual union. All members of NCAE must also join NEA).

Membership Dues:

$237 (2011 NCAE Dues) x 60,000 = $14.2 million for NCAE
$178 (2011 NEA Dues) x 60,000 = $10.6 million for NEA[2]

The typical North Carolina teacher would pay about $415 in membership dues to NCAE and NEA in a year.

Much of this money is being used for Executive Compensation

• In 2009, NCAE took in more than $11 million in total revenue. This included $8.8 million in membership dues.[3]
• In 2009, NCAE spent $7.9 million on salary and compensation. As a percentage of total NCAE expenses, compensation has increased from 66 percent (2006) to 72 percent (2009).[4]
• Between 2006 and 2009, top NCAE executive salary and compensation packages increased 24 percent. During the same time period, average salary and compensation for NCAE teachers in North Carolina increased 12 percent[5].
• Approximate average total compensation for four top NCAE Executives in 2009: $174,817
• Approximate average total compensation for  Average Teacher in 2009: $56,300

Political Contributions

One of the mechanisms by which unions and employee associations have driven up their membership and compensation has been by lobbying state and federal legislatures and packing school boards with their supporters.

NCAE frequently criticizes the influence of powerful corporate interests in American politics.  However NCAE and its parent affiliate NEA represent the largest political influence on American politics

• In 2008 NEA spent $56.3 million on political contributions. NEA’s contributions are larger than Wal-Mart, Microsoft and Exxon combined[6]
• In 2008 NEA and NCAE contributed $1.8 million to help Bev Perdue win the 2008 Governor’s race
• NEA spent another $1.7 million on campaign ads for Bev. Perdue
• In 2008, NCAE PAC made contributions of $264,000 to political candidates
• In 2010, NCAE PAC made contributions of $117,210 to political candidates
• In both cases the overwhelming majority of NCAE political contributions were made to Democrats

Contributions to Advocacy Groups

• In addition to political contributions, part of membership dues are also used to fund contributions to local advocacy groups
• In 2009-10 NEA made $13 million in contributions to left wing advocacy groups
• The list included a $250,000 contribution to NCAE to “help defeat a ballot measure”

NCAE and NEA Use Dues Money to Fight Efforts to Improve Education

When your job is to maintain control over a public monopoly, it is not surprising that NCAE and NEA have opposed every major reform provision in North Carolina, including: charter schools, tax credits for parents, merit pay and tying teacher pay to academic performance.

What Do Voters Say?

A May 2011 Civitas Institute Poll of registered voters found that nearly half of North Carolina voters think the state should stop collecting membership dues via payroll deductions.  Forty- six percent of respondents said they think organizations should collect their dues directly from members. Thirty percent of respondents thought organizations should continue to be able to collect dues through payroll deduction and 23 percent of respondents said they do not know or have no opinion.

Impact of SB 727

SB 727 will not spur education reform. It can, however, help to slow down NCAE efforts, whose goals seem to run counter to the best interests of students and taxpayers.  There is no compelling reason why state government should be involved in providing administrative functions to private organizations.

My only disagreement with the new law is that it does not go far enough. Since there is no compelling reason why government should provide administrative services to select employee associations, the prohibition should apply to all public employees. Unfortunately, an amendment to do such failed to pass last summer.  A complete ban is the only way to properly remedy the current problems. When lawmakers return in spring, they should consider extending the ban to all public employees.

[1] A Less Perfect Union: How the NEA and AFT Play Monopoly with Your Kids, Andrew Coulson. American Spectator , June 2011

[2] Because non-teaching NCAE members pay different dues levels, revenue is not likely to total $14.2 million. Numbers provided for estimate purposes only.

[3] See 2009 Federal IRS Form 990 Form for National Carolina Association of Educators

[4] See 2009 IRS Form 990 for North Carolina Association of Educators.

[5] See: NCAE: Looking out for Children, Members or Itself? , Robert Luebke. Available at: http://www.nccivitas.org/2011/ncae-looking-out-for-children-members-or-itself/

[6] See “The Long Reach of Teachers Unions” by Mike Antonucci.  Education Next Fall 2010.