Analysis: The National Education Association — A $1.6 Billion Enterprise with a Red Ink Problem

Mike Antonucci:

The National Education Association is a big business, with market advantages that are the envy of other big businesses. It has a jurisdictional agreement with its only potential rival, the American Federation of Teachers, which keeps competition for members at a bare minimum. It is exempt from antitrust laws, and in 22 states can compel payments from customers who never asked for its services.

Oh, and almost all of its income is tax-exempt.

That tax exemption does come with obligations, one of which is to file an annual financial disclosure report with the Internal Revenue Service detailing its income and expenditures. According to those filings, NEA and its state affiliates collected a combined $1.6 billion in revenue during the 2015-16 school year, an $8.4 million increase over the previous year.

More money would normally be good news for the union, but it comes with more problems. As revenues have increased, NEA and its affiliates have promised its own employees more and better benefits. Now those future obligations are devouring an increasingly larger share of their current revenue.