UPDATE: Tennessee: County blames Obamacare for budget woes, school closures, spoiled milk, gout.
OK, I made those last two up.
But yes, Clay County, TN Director of Schools Jerry Strong is indeed blaming the Affordable Care Act for his county's decision to pull the plug on the entire district in the middle of the school year:
The economy is so bad in Clay County, Tennessee that school is canceled indefinitely.
The decision to ebb budget concerns by shutting academic doors came down on Thursday when Clay County Director of Schools Jerry Strong quite literally decided to lock the doors of the county’s schools. He was particularly concerned with partially unfunded government mandates and what he believed to be the effects of Obamacare making it impossible to keep funds in the green.
“Clay County’s inability to generate the revenue to offset the mandates is what’s caused this to come to a head,” Strong said Thursday. “The straw that broke the camel’s back was really the Affordable Care Act for us and it has made it very difficult for us to have our employees properly covered and meet the mandates of the law. That was going to require new revenue and the commission felt like they couldn’t do that through a tax increase.”
Hmmm...seeing how what the ACA mandates is that all employer policies have to provide decent, comprehensive coverage, this kind of makes me wonder just what sort of coverage Clay County school employees have now. If they basically amount to "junk plans" (aka mini-meds) which are no longer allowed to be offered under ACA provisions, that says a lot more about the Clay County school district than it does about the ACA.
Even if the current policies are "decent" (if not ACA compliant), I'd really be interested in knowing just how much switching to compliant policies would require. I obviously have no idea what the tax situation in this county is at the moment; it's possible that raising taxes would be unreasonable/unfeasible. Then again, it might just be a case of them having an obvious solution and not bothering to use it.
More importantly, why are they acting like this is some sudden surprise to the district, and so drastic a situation that he had to pull a stunt like locking the doors in the middle of the school year? I'm not alone in my skepticism:
Strong’s cavalier actions are not supported by everyone in the county.
County Commissioner Parrish Wright alleges that the district has enough money to make it through to the end of the school year, which would be a much more logical time to address the budget.
...But the schools can’t remain locked for long. The state could come in and urge Clay County to raise the property tax before the end of the year or simply have them use the remaining budget in their coffers to keep school open for students to take the Tennessee Comprehensive Assessment Program tests.
Again, it's possible that they had no other choice and that the budget burden of moving to ACA-compliant policies is the culprit...but this sounds an awful lot to me like Mr. Strong would be blaming Obamacare for every gripe he has in his life.
UPDATE: Thanks to Louise Norris for providing another article with more details on the budget and the healthcare situation:
Strong saw it coming. He has been telling the county commission for months that unfunded mandates and partially unfunded mandates have placed a financial burden on the system.
OK, if true, this lets Strong partly off the hook.
“The fund balance is comprised of three main components — debt reserve (approximately $920,000), BEP reserve (approximately $720,000) and undesignated fund balance (approximately $410,000),” Strong said. “The debt reserve was established when CCHS was constructed. A Department of Education fiscal consultant has placed the equivalent of the last two payments on CCHS in the reserve. Those two payments total $909,000. The comptroller’s office treats the debt reserve as cash and says it should be spent down maintaining only one payment in reserve. Insurance expenditures are recurring expenses. Spend-down from the debt reserve should only be used for one-time expenditures. My concern is if we spend the debt reserve down, what assurance is there that the funds can be put back in the future to avoid defaulting on the bonds?”
Here's where the ACA comes into the story:
Last October, the board approved an insurance plan for all school employees — which now consists of 170 employees. Prior to the ACA, the school system provided no insurance for non-certified personnel. Thanks to the new law, the system was required to offer an insurance plan that was essentially the same for all employees and make it affordable under the law.
“All employees — certified and non-certified alike — had to be offered the same coverage,” Strong said.
“Non-certified employees had only recently been offered an extremely limited plan.”
OK, so I was half right: Certified employees were receiving some form of full coverage, but non-certified employees were given junk plans.
On May 21, the Clay County board of education approved the 2015-2016 budget and requested $315,000 in additional revenue to offset the new federal requirements of the Affordable Care Act. Over the past five years, the board increased spending by more than $800,000 to meet state and federal mandates, money that is primarily derived from sales and property tax.
OK, now we're getting somewhere. The story doesn't break out the ratio of certified to uncertified...but if the 2015-2016 budget was approved, shouldn't they have seen this coming at the time? Also, any "state" mandates shouldn't have anything to do with the ACA....and this article makes it sound like the other $800K was unrelated to the ACA anyway.
To avoid asking for additional funding, officials made budgetary cuts of more than $700,000 over that time to offset the mandates.
Hmmm...if the ACA regulations only increased their costs by $315K, why did they have to slash the budget by more than double that amount?
In the recent budget, the BOE asked the county commission to approve a wheel tax increase of $45.
That was rejected; then the BOE asked for a 30-cent property tax increase. That was also rejected by the commission, and then the BOE asked for a 20-cent increase.
I'm beginning to see where the problem is...and it looks like I owe Mr. Strong an apology. The county commission, however, seems to be the culprit here:
Instead of approving an increase to fund the school system’s request, on Aug. 30, the commission submitted the school system’s 2014-2015 budget — a “maintenance of effort” budget — to avoid a shutdown of the entire system, according to state law.
Oh for heaven's sake. They knew that they'd need another $315K but shrugged it off and re-used last year's budget instead??
“The introduction of the Affordable Care Act is the straw that broke the financial back of our school system,” Strong said in a detailed letter to officials. “Years ago, when funds were made available through BEP for non-certified employees to have insurance, the CCBE deemed it more important to offer certified employees family plans with those funds. Clay County teachers were and are the lowest paid teachers in the state.
OK, it sounds like Mr. Strong isn't blaming the ACA for all of his district's woes after all. They obviously have some much bigger core problems when it comes to properly funding education (and, I'm guessing, other crucial government programs as well)?
“Offering family plans to teachers was an attempt to compete with surrounding counties offering higher salaries and benefits. The rationale was that non-certified employees could have insurance coverage by participating in the TennCare program.”
TennCare. Yeah, that's otherwise known as Medicaid. Which, as it happens, the state of Texas hasn't expanded either.
Only two adjustments have been made for the school system — one in 1999 and another in 2012, which was mandated but not requested to meet the maintenance of effort. This is the first time the board has requested additional funding in more than 15 years.
...but it'd still be a Tax Increase, which is obviously crazy talk, so naturally the county commissioners couldn't do that.
School officials hope a resolution will be reached soon, as the system is required to have 180 instructional days by June 30, 2016.
“Kicking the can down the road is not the answer and the students are paying for it,” he said.
Yup. $45 a head would have filled that can nicely.