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State teachers union hopes for better days

– Indiana’s largest teachers union, battered by the 2009 collapse of its insurance trust, is hoping the election of teacher and union activist Glenda Ritz as the state’s top school official will help it rebuild its clout and overcome financial challenges.

The Indiana State Teachers Association has been saddled by millions in debt, seen its membership drop, battled lawsuits and been forced to cede its independence to the National Education Association since its trust collapsed. Its staff is a third the size it once was, and the union had to win contract concessions from its own unionized workers to cut costs.

The troubles have undercut the once powerful lobbying force and left many wondering if it can rebuild.

“They’re a mess financially. ISTA doesn’t expect to be solvent until 2027. They’re basically subsidized by the NEA,” said Mike Antonnuci, who runs Education Intelligence Agency, a teachers union watchdog group in Sacramento, Calif.

“They’ve lost their moral ground,” Indianapolis Republican fundraiser and strategist Mike Murphy told The Indianapolis Star.

Ritz’s victory in November, which stemmed from a campaign fueled largely by teacher anger over education changes implemented by Republican Tony Bennett, is a welcome bright spot for the union. But officials acknowledge that the group still faces many challenges, including a legal battle with Indiana’s securities commissioner in which the state is seeking more than $24 million from ISTA over the mishandling of the insurance fund – an amount equal to ISTA’s annual revenues.

“We are not prone to having our dirty laundry shown in public,” said Brenda Pike, ISTA’s executive director. “For our members, it’s certainly an open wound that this would happen to their union.”

ISTA has been working to heal those wounds, settling some of the lawsuits against it and negotiating the contract givebacks with its employees. It settled a lawsuit last year involving former executive director Warren Williams, who had been ISTA’s executive director since 1984.

Williams contends ISTA spent far more in legal fees pursuing him and others in court over the insurance fund collapse than it recovered in settlement money.

“A lot of members should be really upset and should be asking for a total accounting,” he said. “It’s just an absolute total waste of money.”

Pike said the litigation was necessary.

“Everyone I know hoped there would be some penalty to bear,” she said. “What was done was done in the interest of our members, our organization.”

ISTA was left responsible for a reported $57 million in liabilities when the trust went under from bad investments.

Most of the losses stemmed from an underfunded long-term disability plan that was sold to educators statewide.

Paying off that debt with member dues and loans could take until 2027, but the state’s lawsuit on behalf of school districts and teachers who invested in ISTA’s health plan could add to the union’s financial problems.

The state has accused ISTA of fraud, breach of contract and other charges in a case filed in federal court in Indianapolis. It is seeking $24 million in damages, plus legal fees and other costs, to recoup losses tied to 26 school districts and their teachers.

“We hope to protect the school districts and teachers that invested in this health plan,” said Indiana Secretary of State Connie Lawson.

Pike said the lawsuit is “a significant concern” but expressed confidence ISTA would prevail.

“We don’t believe there will be any possible way the state can prove their case,” she said.

Though ISTA’s membership has fallen 10 percent, to about 45,000 members, an Indianapolis Public Schools teacher who is an organizer for ISTA said the financial troubles don’t seem to be a factor for recruitment in IPS.

“I’ve never had anybody ask me about that. That’s not a big issue,” said Ann M. Wilkins. “As long as we provide quality service, those (financial issues) aren’t in the forefront of our members’ minds.”

Wilkins said she is satisfied with ISTA’s efforts to deal with its financial troubles.

“We’re still standing,” she said. “They’re trying to keep their head above water.”

ISTA hasn’t lost all its political clout, however. Campaign finance records show its main political action committee, Indiana Political Action Committee for Education, spent $1.56 million on statewide elections last year. That’s the largest amount for the committee in any election since 2005.

State Rep. B. Patrick Bauer, D-South Bend, the former House Democratic leader, said he believes ISTA’s influence in the legislature has waned in the past two years, largely as a result of Republican majorities in both houses. He said Ritz’s election was a “moral victory” for ISTA but that it will take more for the union to regain its prominence.