Probably without realizing it, most Michigan school districts indirectly subsidize businesses in this state by lavishing school employees and their spouses with exorbitant health insurance coverage.

Most school districts willingly cover their employees’ spouses, without any regard for whether or not these spouses can get health insurance coverage elsewhere, like from their own employer. If a school employee’s spouse works for a private business that offers health insurance but elects to enroll in the plan offered by a school district, taxpayer funds are being used by school districts to indirectly subsidize the payrolls of private businesses.

Spouses of school employees likely would choose the district plan since health insurance provided in schools is typically more extensive and expensive, but there are fewer out-of-pocket costs for school employees compared to insured private sector employees.

If school districts stopped this practice of automatically extending health care coverage to their employees’ spouses, they’d be able to save on health insurance costs. For school employees without children, this would mean saving the difference between the cost of a single plan premium and a two-person plan premium for each employee (two-person plan premiums are about twice the cost of single plan ones).

It should be noted that  for school districts that still use or had used health insurance provided through the teachers union-created Michigan Education Special Services Association (there were about 430 in 2010), this wouldn’t have made much of a difference. The most popular MESSA plans don’t differentiate between single, two-person or family plan premiums and charged the same rate per employee no matter how many dependents they had.

There are some school districts that do limit the eligibility of their employees’ spouses from taxpayer-funded health insurance. Midland Public Schools, for example, outlines in its union contract that spouses of teachers can only enroll in the district’s self-funded health insurance plan if that spouse is not offered health insurance coverage elsewhere. This is a sensible policy, and one that appears to have contributed to MPS spending less per pupil on teacher health insurance than all but 6 districts of a similar size.

Interestingly, this policy should have the support for the state’s largest teachers union, the Michigan Education Association, since they oppose corporate welfare and support increasing the cost of doing business in this state.

Michigan schools spend about $2 billion of taxpayer money on health insurance. Legislators are considering proposals to reduce this cost, like one that would require school employees pay the private sector average of 20 percent of their insurance premiums. This alone would save hundreds of millions. This proposal would also lead to fewer spouses of school employees enrolling in a district-provided insurance, but there would still be plenty of districts indirectly saving private payrolls since school health plans would still be more generous than the norm in the private sector.

That’s why it makes sense for districts to pursue the types of policies used in Midland for its teachers, as this will guarantee even larger savings for districts, regardless of how much employees contribute to the cost of their own health insurance premium.

This past week was Sunshine Week, established by the American Society of News Editors to celebrate and safeguard open and transparent government. But one small Michigan village in Macomb County isn’t feeling the spirit.

Harry Awdey is the Parks Commissioner for the Village of Armada, located on the northwest side of Macomb County. Awdey says he has been trying to make the village more transparent ever since he took office this past November.

“I want our village residents to see where we stand financially,” said Awdey. “I’m a government 2.0 kind of guy.”

However, when Awdey proposed a resolution last week to put the village budget online for all taxpayers to see, not one of the seven other board members seconded the motion. A small step towards greater government transparency died on the spot.

But some members of the board disagree with Awdey’s approach. “We are a small community trying as hard as possible to make every effort to be transparent in our financial accounting,” said village Treasurer Jo Adair in an e-mail.

Adair says the village budget is a “very complex” 10-page document that “the general public would have a hard time understanding.”

Adair added that “The council did not deem it necessary to spend taxpayer money to have someone maintain such documents/changes/amendments online.”

“Some governments follow the spirit of the open records laws and some merely follow the letter of the law,” said Ken Braun, managing editor of Michigan Capitol Confidential and head of the Mackinac Center’s Show Michigan the Money transparency project. “If you follow the spirit of the law, you put the information out there before you’re asked. If you stick to the letter of the law, you keep it hidden until somebody asks for it.

“Taxpayers in most communities should and can be trusted to read and understand their local government’s financial documents,” added Braun. “Maybe the Armada treasurer knows something peculiar about the people who live in Armada – or perhaps she’s just being condescending.”

“Over the years we have repeatedly invited anyone who is interested or curious about our budget to stop by the office,” said Adair. “Or, if they cannot make it here during working hours, I will gladly make an appointment to meet them at a time that is convenient for them, and give them any/all the information that they desire. That way I know that the person looking at the information understands what they are reading.”

Village President Sherri Cooper added in an e-mail, "We are a small community and with our budget constraints as they stand today, we are unable to financially support the additional expense that our Village would incur."

Awdey disagrees with the reasoning from the rest of the council.

“I offered to pay for this out of my own salary,” he explained. “There are a lot of smaller townships and villages than us that put up this information. We should join them.”