Argall’s Proposal to Review School District Cost Savings Approved by Senate Committee

HARRISBURG – A resolution sponsored by Senator David G. Argall (R-29) to review cost-savings associated with merging school district health care plans received the unanimous approval of the Senate Education Committee on Tuesday.

Senate Resolution 250 would task the Legislative Budget and Finance Committee with studying the costs associated with consolidating health care plans for public school employees across the state.

Specifically, the study will look at the cost of current health care plans and the cost of the current benefits over the next five years. The report will also examine the cost of regionalizing health care plans compared to one overall state plan for all school employees and provide the anticipated administrative, technological and staffing costs associated with implementing such reforms, including the impact of President Obama’s Affordable Care Act.

“During the long debate over school property tax elimination, one thing has become very clear: If we don’t control the spending, we’ll never solve the problem,” Argall said. “The genesis of the idea stems from Berks County, which uses a similar plan through the Intermediate Unit for schools within the county. One of the largest, if not the largest, increases to our school district budgets is the rising cost of health care. The resolution will provide the legislature with a roadmap on how we can best deal with this pressing issue, especially as it relates to school tax reform. You are more likely to get a better rate for insurance with 1,000 employees as opposed to 100 employees. I think this could be a solution for school districts on a broader scale.”

A study in 2004 highlighted over $800 million in annual savings.

The bipartisan Senate Government Management and Cost Study Commission found that a statewide system of benefits would provide significant reductions to a majority of school districts across the state.

Senate Education Committee Chairman Mike Folmer (R-48) noted the importance of dealing with the issue of rising health care costs and how it relates to his collaborative efforts with Sen. Argall on school tax reform.

“Property taxes and health care costs are two related issues which financially burden Pennsylvania taxpayers,” Folmer said. “I applaud Senator Argall’s plan to review the consolidation of school district health care plans, and anticipate learning how the findings can be a piece to Pennsylvania’s property tax elimination puzzle.”

Argall noted that the goal is not to harm current public school employees, but to pool resources together to get a better product at a lower cost.

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