INDIANAPOLIS – The nation’s largest teachers union expects to lose millions of dollars through a tax-exempt real estate holding company it set up to bail out its Indiana state affiliate.
The National Education Association stepped in to save the Indiana State Teachers Association from financial collapse in 2009 after the ISTA’s insurance trust went belly up.
The defunct ISTA insurance trust has since been under investigation for mismanaging funds as part of an insurance scam that drained millions of tax dollars from public school districts.
Mike Antonucci, writer of the education reform blog Intercepts, recently pointed out that the NEA’s latest financial statement sheds new light on how the union’s real estate endeavor, NEA Properties, Inc., has fared since taking over the ISTA’s buildings in 2010.
“On March 31, 2010, NEA loaned the Indiana State Teachers Association $3,060,745. In August 2010, NEA increased the aforementioned note balance to $5,386,031.
“… During the fiscal year 2011, NEA provided $7,768,653in additional support and monies to ISTA which increased the outstanding note balance to $13,154,684.As of August 31, 2011, NEA has recognized a $6,000,000 allowance for doubtful debt against this note,” Antonucci quoted from NEA documents.
In other words, the NEA doesn’t expect to recover nearly half of the money it has lent ISTA in recent years. The losses are leaving their mark on the bottom line, Antonucci reports.
“ … NEA Properties, Inc. itself reported a loss in the 2010-11 fiscal year, with $1,663,502 in gross receipts against $1,774,581 in total expenditures – despite the fact that it doesn’t have to pay any employees,” Antonucci writes.
The losses come as the ISTA’s membership numbers continue to dwindle. The union’s Indiana membership slid five percent between 2009-10 and 2010-11, to just under 44,000. There is no indication the numbers are getting any better.
So teachers paying NEA dues in school districts across the country will continue to be forced to subsidize ISTA’s operations – despite allegations against the union of fraud, conspiracy and racketeering for swindling tax dollars from public schools.