Schools facing budget crunch when healthcare act takes effect
Schools across the country are looking to Washington for a solution to a situation some describe as devastating, crippling and even draconian.
Indiana lawmakers from both sides of the political aisle are taking the lead to help out.
They may not be teaching our children, but a school could certainly not operate without them. They are bus drivers, teachers aides, cafeteria workers and substitute teachers, most of whom work in jobs that do not include health care, because they either work less than 40 hours a week or their jobs are not needed year-round.
Earlier this year, however, the IRS changed that requirement to 30 hours a week.
"We are saying we are desperate for substitute teachers, we need you every minute we can get you and, by the way, one day a week, you can't come. We can't use you or you will have too many hours for the week," said Mike Shafer, CFO of Zionsville Schools.
Zionsville Community Schools officials crunched the numbers. It will cost the district $1.1 million dollars a year to provide healthcare to those employees. Opting not to offer healthcare will result in a $1.6 million IRS penalty annually.
"The only other option that is left that doesn't cost a lot more money in our budget, or anyone else's budget, was the idea of reducing hours they work to below the 30-hour level," Shafer said.
Indiana Senator Joe Donnelly, a Democrat, is co-authoring to change that, saying today, "If its definition of a full-time worker as someone who works only 30 hours a week is allowed to go into effect, millions of American workers could find their hours, and their earnings, reduced. This simply doesn't make sense."
Republican Congressman Luke Messer will be introducing a similar bill in the U.S. House of Representatives.
That is the best hope the school districts have.
"We are in a box that has no good way out," Shafer said.
Zionsville Community Schools already told 150 employees that their hours would be cut starting this fall. Multiply that by 300 school districts statewide and you begin to get an idea for how big this problem is.