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Thursday, March 2, 2017

The UFT Financial Affairs Don't Make Sense

UFT President Mike Mulgrew and NYC Mayor Bill de Blasio
Norm Scott's blogpost Saturday, March 18, 2017:

NYSUT Blues - Dire Finances and ST Criticism of Non-Union Consultant

Analysis—New York’s Teachers Unions Are Millions in the 
Red: A Look at the Numbers
Mike Antonucci, March 1, 2017
Public schools in New York are among the best-funded in the nation, with the average spending per pupil exceeding $20,000 annually both in New York City and statewide. Not coincidentally, New York is also home to the largest state teachers union, New York State United Teachers, and the largest teachers union local, the United Federation of Teachers, in New York City.

Besides advocating for their members, the unions are also commercial enterprises operating in a market economy. They have buildings, employees, bills to pay, budgets to construct, and in-house “staff unions” they have to bargain with. It is instructive to compare the teachers unions’ positions for financing public schools with the way they collect and disburse funds internally.
For instance, unions spend heavily on employee salaries and benefits — to the point of risking their future solvency. If a new court challenge similar to the Friedrichs case results in the end of agency fees — required union payments by non-members to compensate for collectively bargained benefits — the New York unions may find themselves unable to meet their obligations to members and employees alike.
The unions’ public policy agenda is designed to mitigate those risks, but ir would have the effect of placing the public treasury in similar straits.
That’s because most union revenue comes from member dues. These tend to increase along with increases in average teacher salary, either according to an established formula or by the vote of a body representing the entire membership. NYSUT collected almost $133 million in dues during the 2015–16 school year, an increase of 5 percent over the year before, according to its annual disclosure reports with the Department of Labor.
UFT received $151 million in dues in 2015–16, a one-year increase of 5 percent.
Dues are a dependent source of revenue, however. As long as New York’s public schools hire additional teachers each year, and average teacher salaries increase, the unions’ income increases. No other legislative action or market condition has more than a marginal effect on union finances.
Having collected substantial sums, how do NYSUT and UFT spend them?
Most of it goes to their officers and staff. NYSUT employed around 550 people (according to its most recently available tax filing) with a payroll of $60 million. That sum is trivial, however, compared with the union’s liability for post-retirement benefits. NYSUT estimates that it is on the hook for $504 million in health care for retired members and pension costs, according to its 2016 labor department report, an increase of 31 percent from the year before and 135 percent from 2010.
From 2010 NYSUT Organization Report — Dept of Labor:
Six years later, the union’s liability for retiree benefits and pensions had risen by 135 percent:
UFT had 690 employees and a payroll of $42 million in 2015–16; it ran up large post-retirement liabilities of $77 million — a one-year increase of more than 25 percent and a 30 percent increase since 2010.
The unions boast of their success in stifling efforts to reduce public employee pension costs, but NYSUT would have to devote its entire income for more than three years just to cover the cost of its own employees’ pensions and retiree benefits.
How will the unions remain solvent given their precarious current state? So far they’ve relied on deficit spending. Annual deficits have reduced NYSUT’s net assets to –$413 million, according to its most recently available federal tax filings. UFT managed a surplus in 2014–15 after a deficit the previous year, but its net assets were –$19 million.
Here’s another possible indicator of the union’s financial insecurity: UFT owes NYSUT almost $11 million for back dues, and $4 million of that is 90 to 180 days past due. This suggests — we would know for sure only if the unions were more transparent about their financial activity — UFT has at least a temporary cash flow problem.
“The UFT is confident it will meet its future obligations,” UFT spokesman Dick Riley said in an email.
If the UFT is having financial troubles, NYSUT, which declined to comment, can’t afford to bail it out. And if NYSUT is having financial troubles, its parent organization, the American Federation of Teachers, couldn’t afford to bail it out either, because about 40 percent of AFT’s income is the dues paid by those same NYSUT members. In other words, AFT doesn’t have enough members in the rest of the country to cover NYSUT’s losses.
In the public sphere, the New York unions will consistently demand higher taxes, but when it comes to their own affairs, they recognize the risks of repeatedly going to the well, i.e., proposing additional dues increases to membership. They prefer to run up debt rather than reduce expenditures or raise dues to a level that would cover their spending.
We should approach the unions’ prescriptions for public finances with skepticism until they cure their own budgetary ills.
Mareesa Nicosia contributed to this story.
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Teachers union spent millions on baseball, retreats and food

Carl Campanile, NY POST, January 9, 2017
Mike Mulgrew

It takes more than just a shiny apple to satisfy the city’s teachers union, which is spending member dues at a furious pace.
The United Federation of Teachers has blown through millions of dollars on fancy catered meals, tens of thousands of dollars on Yankees and Mets tickets, and big bucks on trips to destinations like Orlando, New Orleans and Las Vegas, records show.
Overall, the UFT boosted annual spending by more than $13 million in its fiscal year ending June 30, 2016 — from $168.7 million to $182.1 million, matching the entire budget of the city of Albany.
That includes the generous salaries of top UFT brass. Seven UFT staffers make more than $200,000 a year, and six of those exceed the $227,000 salary of Schools Chancellor Carmen FariƱa.
Union boss Mike Mulgrew, for example, got a 3.8 percent pay hike and earns $283,804 — more than Mayor de Blasio.
Sixty-five staffers’ salaries cleared $150,000, nearly double the $80,000 to 85,000 salary of veteran teachers with 10 years’ experience.
And the big salaries are bolstered by pricy perks.
More than $3 million was spent on events catered by famous restaurants, while $1 million-plus was spent for member-training retreats at the Hilton Westchester in Rye, which describes itself as “country club cool.”
Mulgrew and other UFT staffers also paid thousands to attend conventions on union business and career and technical-education meetings, including $27,224 spent at the DoubleTree Hilton in Orlando, Fla. a union spokesman said.
Its membership increased last year from 180,145 to 187,157, thanks in part to new teachers hired under de Blasio’s universal pre-K program.
That membership increase led to a 5 percent increase in revenues, from $143 million to $151 million. Each member pays $56 twice a month in dues. The union also gets money from grants and rents on its properties.
Other than the perks, much of the union’s spending aims to protect its political clout. Donations to community and advocacy groups jumped from $2.3 million to $3 million, a report filed with the US Labor Department said.
The union gave $207,977 to ACORN, New York Communities for Change, which opposes charter schools, as well as $10,000 to Bertha Lewis’ Black Institute.
A pro-charter school group slammed the spending.
“It’s no wonder that, just before Christmas, the mayor went along with the teachers unions’ new performance-evaluation plan that will eliminate the last independent check on teacher performance,” said Jeremiah Kittredge, CEO of Families for Excellent Schools.
Mulgrew defended the spending.
“We are proud of every nickel we spend on — and on behalf of — our members,” he said.
”Defending public education is increasingly expensive.”

 UFT spends millions on dinners, parties, parking, coffee as thousands of teachers face layoffs
As nearly 5,000 city teachers face the ax, their union shells out millions of dollars on feasting, boozing and partying, the Daily News has learned.
Free-spending United Federation of Teachers brass last year spent nearly $1.4 million for the UFT's 50th anniversary gala at the Hilton - complete with a movie, a book and a paperweight.

Records show they:
·        Ponied up $514,000 to 16 separate caterers.
·        Dropped $278,417 on the annual Teachers Union Day ceremony at the Waldorf-Astoria.
·        Bought $6,100 in gift baskets from a lower East Side candy store - and plowed $179,000 into training retreats at a Connecticut resort boasting golf, scuba diving and aqua aerobics.
In one amazing feat of spending, they shelled out $114,870 for annual "coffee supplies" at their five offices across the city - paying the Coffee Distributing Corp. on Long Island $324,000 over three years, records show.
And while most New Yorkers spend hours trying to find a parking space, the UFT rents 25 slots in Brooklyn's Renaissance Plaza Garage for members at an average annual cost of $75,000 over three years.
"I'm not going to apologize for spending money to service our members," said UFT President Michael Mulgrew.

"These people are heroes dedicated to making a difference in the lives of our children. They never get the respect they deserve. A cup of coffee, a bottle of water and a few parking spots is the least we can do for them."
The $284,078-a-year union boss got a little more than coffee when he took the reins in August 2009: The UFT feted him with a $6,400 "Welcome, Michael" party at a Brazilian steakhouse.
Mulgrew describes it as dinner for 130 union members, most of them volunteers, that came to barely $50 a head.
Three months later, the union bid farewell to his predecessor, Randi Weingarten, with a goodbye bash at the Tribeca Grill. Price tag: $8,339. "Mayor Bloomberg came and I tried to get him to pay," Mulgrew said. "Wouldn't do it."
Drawing from an annual honeypot of $126 million in members' dues, the union last year flung open the spigots even as it took fire for protecting dismal teachers and fighting reforms.
"These are wasteful, fantastic and outrageous expenditures, and they learned their profligate ways from the governmentspenders they negotiate with," said Sol Stern, a Manhattan Institute scholar and veteran education advocate.
Not Paris, but it is the Hilton
The spending orgy comes to light a week after after The News disclosed that cops bounced 24 rowdy UFT reps from an Albany eatery after they caused a ruckus over an $1,800 tab - and the modest size of a $40 gourmet quail.
Turns out over-the-top spending and a party-hearty culture is a union trademark.
Documented in the UFT's 2010 annual report to the U.S. Labor Department are details of the union's "Golden Jubilee," a gala bash last March that drew 2,500 members of the "UFT family."
It cost to $679,246 for the event at the Hilton New York.
To mark the milestone for posterity, a CUNY TV Foundation crew was paid $220,000 to film the documentary "UFT: Celebrating 50 Years," and all attendees got a DVD.
The UFT paid a printer $262,406 for a special book and anniversary journal. Paperweights emblazoned with the UFT logo cost $46,333. Balloons, $20,000 for entertainment and other expenses brought the tally to $1.4 million, filings show.
The UFT says it recouped $125,000 by charging members $50 a head, and donations from vendors and advertisers brought in an additional $275,000. Bottom line: That left the UFT out $1 million for the gala.
"We're very proud of the work we've done in 50 years as a union, and it deserved to be celebrated with dignity and respect," Mulgrew said.

Betsy Combier
Editor, NYC Rubber Room Reporter
Editor, New York Court Corruption
Editor, National Public Voice
Editor, NYC Public Voice
Editor, Inside 3020-a Teacher Trials