Forced to address a multi-million dollar budget shortfall, the Tempe Union High School District’s board voted unanimously Wednesday night to eliminate health insurance benefits for all employees who retire after June 30.
The district said that the move could save some $1.3 million. The plan might still allow the district to afford a 1 percent raise in base salaries for its employees, which would cost roughly $1 million, said spokeswoman Linda Littell.
Governing Board member Michelle Helm said it was hard to look out at the teachers in the audience who she knew would lose their retiree benefits.
“But I know I could be looking out at a young couple who need a raise, with several children to take care of,” she said. “I also could be looking at one of our classified employees, who is barely making it and who, without a raise, won’t make it at all.”
In the past, district employees have received health insurance benefits and do not have to pay premiums if they retire after working 30 years and meet some other criteria. Then, at 65, those retirees can access Medicare benefits.
Now, the district hopes some of its roughly 800 teachers will retire, then come back to work through a contract agency where they will only earn 75 percent of their current base salaries, but will be able to dip into their retirement benefits under the Arizona State Retirement System.
Dave Rasley, a Tempe High teacher, attended the meeting to voice his disappointment with the retirement incentive package.
He estimated that having to pay for his health insurance in retirement could cost him some $70,000.
“I did every bit of the work I promised to do, but now I’m being told ‘no,’” he said. “Meanwhile, I helped thousands of people to retire.”
Prior to voting, board member Robin Arrendondo-Savage said that changing times, along with inadequate state funding, are creating a situation where the board has to make tough choices.
Benefit costs have changed dramatically since the district first implemented the benefit decades ago, she said.
“At that time, our salaries were very low and insurance was very inexpensive, and it was easy to do,” she said. “Now, look where we are. Insurance isn’t getting any cheaper, and we want our salaries to be competitive.
Board members also said the district’s overall financial health justified cutting the retiree health insurance.
“In this very desperate year we have financially in our district, I keep thinking of how we can provide any chance of step movements or anything else for our employees,” said board member Zita Johnson. “It’s for the greater good of our district — and by district, I mean the people who work for our district and every student in our district.”