Faux Savings

The Michigan Education Association union is leading the education establishment's attacks on lawmakers' plan to pass a no-new-taxes budget that among other things reduces state spending on public schools. In a podcast posted yesterday, MEA President Iris K. Salters repeated a claim she made in an Aug. 26 Detroit News Op-Ed that school employees "probably have saved over $700 million" in health care costs. Salters does not disclose the source of this figure.

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If school employees saved taxpayers $700 million in health insurance, total state spending on school employee health insurance would have decreased. It hasn't. According to the Center for Education Performance and Information, which compiles data reported directly from schools themselves, the state spent $200 million more on school employee insurance in 2008 than it did in 2004. This represents a 10.5 percent increase over five years. Where exactly are these alleged "savings"?

Perhaps the MEA thinks that because school districts could have spent even more on employee health insurance but didn't, that means they saved money. This is like me arguing I "saved" $20,000 by passing up on the $90,000 Porsche and getting a $70,000 Lexus. My wife wouldn't buy that argument and neither should Michigan taxpayers.