Teachers who have new contracts by May 22 will not have to contribute 1.5 percent of their pay toward their health benefits, at least for the 2010-11 school year, a memo the state Department of Education sent to school district administrators last week states.

The issue provides a new incentive to school staff to take a wage freeze or smaller raises. But details of how the new 1.5 percent payroll deduction will affect contracts are still being developed, and districts and teachers are approaching the issue cautiously.

“It is an incentive,” said Steve Baker, spokesman for the New Jersey Education Association. “But we really can’t say yet if it is having an effect.”

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On March 23, Gov. Chris Christie signed into law Bill S3, requiring all school district employees to pay 1.5 percent of their base salaries toward the cost of health benefits. The law takes effect 60 days after the signing and applies to all new union contracts.

The memo from Yut’se Thomas, DOE acting Assistant Commissioner, Division of Finance, notified districts that employees working under an expired contract must contribute the 1.5 percent payment beginning on May 22. But it also says that districts that settle new contracts before May 22 will not be required to include the payment.

Frank Belluscio of the New Jersey School Boards Association said about 70 districts are currently working under expired contracts, a higher amount than in previous years. Among them are Hamilton Township, Greater Egg Harbor Regional and Mullica Township in Atlantic County and Maurice River Township in Cumberland County.

School officials said they still have questions about whether the agreement would also include districts in which the contracts do not expire until June 30 of this year. The letter said more details and clarification will be forthcoming.

The DOE provided the following information Wednesday:

  • For any contract negotiated before May 22, employees will not have to pay 1.5 percent medical.
  • For any current contract for which a one-year extension with no salary increases for 2010-11 has been granted, employees will not have to pay 1.5 percent medical.
  • For any new contract negotiated after May 22, employees will have to pay 1.5 percent medical.

Hamilton Township superintendent Michelle Cappelluti said the union has a copy of the memo, and she believes the school board would be willing to meet on the issue, even though the district has gone to mediation and has a fact-finding session scheduled in April.

Hamilton Township Education Association President Diane Brunetti could not be reached Wednesday but said at Tuesday’s school board meeting that the union would consider the one-year wage freeze if the money saved would be used to save jobs in the district.

Teachers in Lower Township, Cape May County, already approved a new three-year contract, that does include the 1.5 percent medical payment. Superintendent Joseph Cirrinicione said the new contract calls for a two-percent net increase to employees each year, based on a 3.5 percent salary increase with a 1.5 percent reduction for the health benefit payment.

“I’m already thinking about next year and the year after,” he said.

The contract in Maurice River Township expired in June 2008. Teachers union president Ray Hocker said saving the 1.5 percent would be an incentive for his members, but he is not sure an agreement can be reached in time.

“I try to stay hopeful and positive,” he said.

He said the cuts and layoffs planned for the small, rural district have been weighing very heavily on everyone.

“It is having an impact,” he said.

Maurice River Township superintendent John Saporito said he also was not sure an agreement with the board could be reached in time to meet the deadline. He said when the district sought a quote on its insurance for next year, the initial price came back 25 percent higher than this year.

“People don’t understand how expensive benefits are,” he said, saying the cost can reach $25,000 per employee for family coverage with dental and prescription plans. “It’s been a very difficult negotiation. But we would all like it to be over.”

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