At a time when the Michigan Education Association is boasting that it has coordinated a fundraising effort to raise $12,000 for school supplies for the struggling Pontiac School District, the health insurance arm of the state's largest teachers' union has secured a legal judgment against the district for $7.8 million.
The Michigan Education Special Services Association (MESSA) is a third-party administrator of insurance benefits that was created by the MEA and serves numerous school districts in the state. It was awarded the consent judgment against the Pontiac School District by the courts, according to the Oakland Press. MESSA's trustees all have direct ties to the MEA.
While the MEA blames education funding cuts for Pontiac’s problems, the district had health insurance it couldn’t afford, which shines a light on the real issue, said Michael Van Beek, education policy director at the Mackinac Center for Public Policy.
"That the district can’t pay its health insurance bill and MESSA has to sue them to get their payment indicates the district has a different kind of problem," Van Beek said. "And it's related to spending more than they are taking in. It indicates the Pontiac school board has a problem controlling its costs, not a problem collecting revenue. … It’s been trying to afford things that it can’t afford."
Pontiac spends $16,400 per pupil.
Many schools are getting rid of the top-tier MESSA insurance and finding less expensive insurance for their teachers. For example, in July officials from Dansville Schools in Ingham County said that by dumping a top-tier MESSA program and getting a less expensive insurance plan, it was able to spend $250,000 less than it budgeted while still paying for all its teacher’s premiums and deductibles.
MESSA was founded by the MEA. According to MESSA’s latest filings with the Internal Revenue Service, all of its trustees can be directly linked to the MEA either through past service as a high-ranking MEA executive or as an MEA board member or committee member.
In 2011, MESSA paid the MEA $93,611 for “performance of services or membership or fundraising solicitations by other organizations.”
MEA Spokesman Doug Pratt, MESSA Spokesman Gary Fralick and Pontiac School District Board Members Karen Cain, Brenda Carter, Carol Turpin and Sherman Williams didn’t respond to requests for comment.
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