County Executive Steve Schuh announced Thursday a two-year plan that includes financial contributions from the school system, county government and the school employee unions to eliminate the $20 million deficit in Anne Arundel County Public School system's health care fund.
His budget proposal also would give school systems employees a step increase.
The school system has struggled in past months to pay for their monthly medical bills and is expecting to be $20 million short in their health care fund in the next fiscal year. They faced similar challenges last year. School staff attributes the problem to rising health care costs and expanding school staff.
As part of the bailout effort, the Maryland State Department of Education allowed county government to put an one-time $22.5 million into the schools' health care fund, exempting them from a state law that requires increases in per-pupil funding to be recurring. Savings from a recent deal with CareFirst to administer health care will also go toward the health care fund.
But the one-time money alone won't solve the yearly deficit, county and school officials said.
Schuh said he plans to divert $10 million to permanently boost the health care fund over the course of the next two fiscal years. He's asking the school system to pay $4 million in each of the next two fiscal years and school employees to pay a greater portion of their health insurance costs.
The two-year plan includes a $7.5 million to offset the increases in health care costs for school staff. However, Schuh said he's only willing to use the money if unions agree to a cost-sharing health insurance model that's similar to those of the county employees who pay about 15 percent of the insurance premiums. Most school employees pay between 7 percent and 10 percent of the health care premiums.
School employee unions are negotiating with the Board of Education on their health care plans. Three unions recently reached an agreement that would increase some prescription drug prices, saving the school system about $400,000.
The president of the Teachers Association of Anne Arundel County, Richard Benfer, said the union is close to a deal with the school board to shift costs to employees. Benfer praised Schuh for closing the deficit but said he doesn't like the "ultimatum" given to unions to make a deal or lose out on $7.5 million.
Benfer said the increases in premiums will likely take place gradually over a couple of years.
Schuh, who will present the fiscal 2018 budget on May 1, said he plans to fund the school system $20 million above the state required minimum. The money will go toward health care and a step increase for teachers, which is a raised published on a pay scale based on experience.
School board president Stacy Korbelak said Schuh's funding plan to balance health care and pay for teacher raises is "clear evidence that he has listened intently to our needs and to those who have advocated for our students and employees."
Alex Szachnowicz, the schools' Chief Operating Officer said the school system would have to scrap money off of different parts of the budget to come up with $4 million in the next fiscal year.
He said school system could do less staff training or delay purchases or leave certain positions open.
"No options are off the table," he said.
But decision to divert money to the health care fund would be made after the County Council votes on the budget in June, Szachnowicz said.