The Clock is Ticking Down for T/E School Budget . . . Will Property Tax Increase be the Highest of our Neighbors

The clock is ticking down . . . the T/E School Board votes on the final budget for 2011-12 on Monday, June 13, 7:30 PM at Conestoga High School.  The preliminary school budget contained a property tax increase of 3.8%.  Will that tax increase remain in the final budget or is possible that the school board members may consider a lower increase?

The school board and the administration have battled their way through the 2011-12 budget since last fall, with regular school board meetings as well as finance and special budget meetings.  The board and administration thoroughly reviewed many budget strategies and made difficult educational and programming decisions. The school district reached agreements for the 2011-12 school year with the teachers union (TEEA) and with the non-instructional union (TENIG).  In the spirit of shared sacrifice, union members from TEEA and TENIG showed their support for the school district and agreed to a variation of a salary freeze to help the bottom line of the District’s 2011-12 budget.

According to the TEEA agreement with the T/E school district, the teachers will have their salaries frozen for the first 6 months of the 2011-12 school year based on their final paycheck of the 2010-11 school year.  As part of the agreement, TESD agreed there would be no involuntary furloughing or involuntary demotion of teachers for 2011-12.  The cost savings for the TEEA agreement is approximately $1 Million to the school district.

The agreement reached between TENIG and TESD is a zero percent wage increase for the 2011-12 school year.  The savings to the school district with TENIG’s salary freeze is $300K.  Adding the additional reduced overtime wages and the total TENIG savings to the District is approximately $450K.

The school board members applauded the efforts of TEEA and TENIG . . . the combined total help from the two unions represents nearly $1.5 million in savings to the school district. 

Here’s my question . . . given the substantial level of savings, due to TEEA and TENIG’s spirit of shared sacrifice, will the school board also recognize the ongoing sacrifices of the taxpayers in this school district?  Will the school board consider a reduction in the proposed 3.8% property tax increase?  The preliminary 2011-12 budget could not predict the $1.5 million savings from the unions, so should the taxpayers expect the final budget to reflect those savings?  I believe that the 3.8% includes taking the full Act 1 exemptions but maybe in light of the union savings, the percentage increase could be reduced.

In anticipation of TESD’s final budget vote on Monday, I thought it would be interesting to see where the currently projected 3.8% property tax increase measures up against other local school districts. I think that it is fair to use Radnor, Lower Merion and Great Valley school districts for comparison.  Generally speaking, these school districts are comparable in level of education quality and I would think that the economic climate of the taxpayers is similar.  Each of these school districts has approved their final budgets —

  • Radnor Township School District1.4% tax increase Lowest RDSD tax increase in years. RTSD credited the Radnor teachers’ sacrifice in reaching a contract agreement for the low tax increase.
  • Great Valley School District 2.9% tax increase  GVSD Superintendent Alan Lonoconus, said of the tax increase, “We tried very hard this year to make sure the impact to programs was as gentle as possible. But we also kept in mind the economic conditions not only of our district, but of the nation.”
  • Lower Merion School District3.3% tax increase  Lowest tax increase since 1984-84 fiscal year

Although not an adjacent school district and perhaps not as highly ranked academically as Radnor, Great Valley, Lower Merion and T/E school districts, I was fascinated by West Chester School District’s final budget decision —

  • West Chester School DistrictNO tax increase.  The 0 percent tax increase balanced WCSD budget by taking $3 million from their fund balance.

It is not surprising that the taxpayers of WCSD overwhelming supported the decision of their school board leaders not to increase taxes.  In reviewing the demands of their school budget over the last months, there was much discussion between school board members and residents in regard to the severe economic conditions facing the residents, rising gas prices, high unemployment, etc. Many taxpayers in the WCSD complained that they are already financially pushed to the limit — the 0 percent tax increase decision came as welcomed news.

As it now stands, unless the T/E school board members reconsider, a property tax increase of 3.8% is on the table for a vote at Monday night’s school board meeting; this increase will represent the highest increase among our neighbors. TESD is a great school district, and one for which we all can be proud, but likewise could be said for Lower Merion, Great Valley and Radnor school districts.  My guess is that the argument that some will make is that TESD currently has a lower tax rate than these other mentioned school districts and therefore taxpayers are in a better position to afford the tax increase.  Correct? 

I have not done a research analysis but I believe that TESD may have the highest fund balance of any of these neighboring school districts. (In fact, I think I read somewhere that TESD fund balance is one of the highest in the state).  Some could argue that the fund balance represents over-taxing of residents in prior years, so . . . now that the taxpayers of this community need financial relief can we ask that the TESD use more of the reserve and lessen our property tax increase?

To help the community, the teachers, secretaries, custodians, cooks and maintenance personnel in this school district have shown us the meaning of shared sacrifice.  Is it possible that TESD will acknowledge the sacrifices of the District taxpayers, and lower the expected property tax increase?  Or, is this just wishful thinking on my part . . . ?

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  1. T-E tax increase will not cover the costs of operating the district. It can be any amount up to 3.8%, but if we don’t tax, we are ignoring the reality of the cost of operating our schools.
    Even with a 3.8% increase, we will have one of the lowest if not the lowest tax rate in the area (i’m too worn out to go research it again). Wage freezes and deferred raises notwithstanding, our unions have unsustainable health care and retirement plans that we have to pay for.
    With the prospective number of assessment appeals, this increase won’t generate the revenue they are counting on anyway. Other districts have other issues — it’s not apples to apples to compare increases. Compare tax rates.
    We do have to pay for what we are getting. If we defer the increase this year, we have to hope for a marked increase in transfer taxes to offset the revenue falling so far short of expenses. Fund balance is identified to pay the short-term spikes in PSERS costs. It’s not being replenished.

    1. West Chester enacted an EIT 2 to 3 years ago. I know it because I pay it–thousands of dollars to West Chester. Maybe that’s how they have the money to now avoid a property tax increase.

    2. Pattye asked,can we ask that the TESD use more of the reserve and lessen our property tax increase?

      The answer is yes in the short term and no in the long term. TE can be compared to a family that is spending more than they earn while draining their savings account to make up the difference. This strategy works fine until the savings account is gone.
      .
      Some numbers from the PDE2028 submission to the state:
      http://www.tesd.net/2127101028153743227/lib/2127101028153743227/2028prop.pdf
      .
      TE’s spending (Total Appropriations, p8) $109M
      TE’s revenue (Total Estimated Revenue, p1) $105M
      .
      The savings account makes up for the $4M difference:
      TE’s starting balance (Fund Balance, p1) $30M
      TE’s ending balance (Fund Balance, p8) $26M
      .
      How high would TE have to raise taxes to bring revenue in-line with expenditures? Or how much higher would taxes have to go to cover the $4M shortfall?

      Answer : About 8.4% rather than the proposed 3.8%

  2. T/E may be the highest proposed tax increase among the other districts mentioned – THIS YEAR – but it should be noted that for many years, T/E has consistently had the LOWEST annual tax rate increses among the local districts mentioned above. The article notes that at 1.4% this year, Radnor’s tax increase is the lowest in many years for Radnor. True – but Radnor has had much higher tax increases than T/E for many years in a row prior to this year. As for West Chester having no tax increase, it should be noted that doing so relies upon taking $3 million from fund balance, One year while I was on the T/E board, we had no tax increase as well – and yes, we did use some fund balance to do it.

    As Andrea points out, above, we are not comparing apples to apples here. Each school district is unique. T/E has had, and still has, a lower tax burden than most other districts – including, if memory serves, the districts mentioned in this blog entry. T/E has consistently ranked in the 470-480 range out of 501 school districts in PA in terms of haviong the lowest tax burden. Now, readers may object that it is too high, has gone up too much in recent years, and so on – all valid points to be sure – but relative to other districts T/E compares favorably.

    Using fund balance will not solve the problem for very long. The pension and health benefits are the most significant budget busters. The pension system is a creation of the state legislature and assistance will be required from Harrisburg to address the pension crisis. Health costs will have to be shared by the teachers more in future contracts – the concept was introdcued in the 2008 contract, albeit at a modest rate per teacher.

    As for using fund balance to offset tax increases – well, the T/E fund balance may be larger than most other districts, but it is not all that large when compared to projected budget deficits. You could use it now and hope that the economy recoves quickly – a dubious proposition – but if it does not, all you have done is create a bigger deficit down the road.

  3. I love it when posters look at TE’s tax rate as a merit badge and as a justification to increase spending. The major reason TE’s tax rate is low is because of the community’s large commercial tax base.

    1. C-One

      You are correct that the tax base has a lot to do with any school district’s situation. I don’t believe you are correct regarding the commercial aspect – I think we are more residential than some of the districts mentioned – but it is true that our tax base has been strong.

      A district’s tax base is a large factor and varies from community to community. That is one reason why we say that we are not comparing apples to apples. However, it is also a fact that relatively speaking, T/E is a very well run district – more efficient than many others. A great deal was done to control those costs which could be controlled without impact to the quality of the educational program. I think making a relative argument was appropriate, since the very topic of the post above is to make a relative argument about proposed tax increases among other local districts as compared to T/E. Accordingly, the point I made was valid so far as it goes.

      I do concede that there are major issues to be dealt with – by current and future board members, current and future state legislators, and by concerned citizens like yourself and others who post on this blog. I refer again to the PSERS and health care issues. I will say again (as I have many times before) that the solution to these problems must include a large contribution from Harrisburg, or they will not be solved at all. The power of the local board is limited when addressing these issues. If the crisis in taxation and school funding were due to local decisions, you might expect considerable variation in the outcomes and situations across Pennsylvania’s 501 districts. Yet you see the same problems. The only difference is that more affluent communities with stronger tax bases to begin with are in a better position to ride out the economy since they have larger fund blaances than less fortunate districts.

      I urge everyone concerned to write, e-mail, and call our state legislators regarding these issues. I have. Posting on a blog, without more, will accomplish nothing.

      1. Here are the numbers – for the percentage of R-10 (single family home) assessment relative to the entire assessment base.

        District % R10
        Great Valley SD 61%
        Octorara Area SD 65%
        West Chester Area SD 66%
        Tredyffrin-Easttown SD 67%
        Kennett Consolidated SD 70%
        Oxford Area SD 73%
        Coatesville Area SD 76%
        Downingtown Area SD 78%
        Phoenixville Area SD 78%
        Owen J Roberts SD 79%
        Avon Grove SD 83%
        Unionville-Chadds Ford SD 90%

        1. I don’t have any data for Radnor or Lower Merion. They are in the wrong (Delaware) county. Tax records in that county are hard to access.

        2. So, doesn’t that mean that TESD gets more bang for the residential buck? Our concerns have regulary been about homeowners. Don’t we in essence get partially subsidized by the commercial properties compared to UCF…UCF’s millage of 25.06 vs TESD’s millage of 18.6474 —
          So you believe TESD does not deserve credit for keeping the rate down….because the base is so much bigger. Distinction, in my view, without much difference. It’s a fact — but not sure it’s germaine to the to the topic of running schools. People move here for a reason — schools and value are big ones.

          So here’s our famous $750,000 market value house. In each place, it would be assessed (based on the 7/1/10 CLR of .55 for Chester County) at $412,500 ….
          TE Taxes: $7,692.05 (1.02% of home value)…..UCF tax: $10,337.25 (1.37% of market value).

          I understand the tax base issue — I do — but I don’t think it’s relevant in this market. And I do think TESD is keeping an artifically low tax rate. This year — $3.8M from fund balance is just not okay. Act 1 is doing us NO favors.

  4. So tired of looking this stuff up — doesn’t anyone feel like looking at the actual mill increase instead of the percentage increase. Total mills vs. percentages. I know people say that you pay more to move here (in house price) but the reality is that you spend X dollars on a house and then the taxes are a percentage of what you put out. TE’s are quite candidly too low, so to raise the taxes means an increase that is relatively higher, but not in real dollars. Unless we are willing to cut programs — CUT PROGRAMS — or assess a student activity fee — our costs will continue to rise, regardless of how clever we get in announcing the amount of the increase. Americans simply expect to make more every year — and even on this blog, we hear about “giving up raises” as if that is a big sacrifice. Contractual raises — “keep a good job, lose a great one” — my mantra for all public employees (meaning people who collectively bargain with power). I had a boss once who said quite wisely (when teaching me about asking for a raise:) — “don’t put a gun to my head unless you are prepared to blow your own brains out.”

    Our board “got” these concessions by promising not to furlough or outsource. Concessions of deferred raises. No change in health care plans. Not far enough.

  5. Pattye,

    It seems like we’re always comparing to SDs close by & to the west.

    Take a look at Wallingford/Swathmore. Their increase is 1.4% which was approved Monday. They have been reducing their increases for the past several years.

    I agree with Andrea & I’ve said it before. SD health plans must change to align with those in the public sector. Public sector employees have been biting the bullet for several years, especially 2011 where many have seen their premium share & co-pays drastically increase.

  6. PLEASE — not far enough — why doesn’t the district and the Township get with the programs of many of the other districts & Townships and adopt an EIT and end this discussion……
    Stop concentrating on expenses when we have not enacted all of the potential revenue sources,
    Seems to me that cutting courses and increasing class sizes etc. are “last resort” actions and not actions taken because the Board is more concerned with being re-elected rather than doing what is good for the children.
    Also, looking to Harrisburg for more money only deflects the tax issues and passes the tax burden to the state. Property taxes may stay the same but income and/or sales taxes will have to be increased to cover the money Grewell is suggesting. I agree that Harrisburg owns the PSERS dilemma.

    1. Can we agree that spending per student is the best financial measure; not millage. The school board has direct control of how effectively the revenue dollars are spent. They have no control over the district assessment base or the zoning mixture – both of which have a large effect on the millage rate.

      Here are the numbers for spending per student for all CC districts.

      Avon Grove $12,360
      Oxford $12,441
      Downingtown $15,767
      Owen J. Roberts $16,649
      Unionville $16,927
      Kennett $17,051
      West Chester $17,402
      Tred-Easttown $17,596
      Octorara $17,673
      Great Valley $18,460
      Coatesville $19,619
      Phoenixville $22,009

      Maybe we should all be planning a trip to Avon Grove.
      .

      1. “Maybe we should be planning a trip to Avon Grove.” Not me – I’ll keep T/E. By your logic, maybe people should move to poverty stricken, rural parts of the country where they spend $6000 a year per student. Would any of us want to live there?

        1. Kevin,
          .
          Let me expand on my logic. In one of my posts above I calculated that there is a $4M gap between revenue and expenditures. That’s a gap of less than 4%. Some posters want the gap closed by raising taxes using the excuse that the only other solution is to [gasp!] cut programs and personnel.
          .
          Let’s examine Unionville. They spend 4% less. Their demographics are similar. They have equal academic performance to TE (#1 & #2 in the state). Why wouldn’t the school directors of TE examine how they spend 4% less and get equal results? Maybe it’s not possible for TE, but isn’t it worth a look?
          .
          Let’s examine Avon Grove. The spend 30% less than TE. Their academic performance is not on par with TE, but that, probably, has more to do with their demographics (lower parental education, higher poverty, more ELLs) than their spending. Why wouldn’t the school directors of TE examine if there are any efficiencies amounting to 4% that could be used locally?
          .
          Comparisons to Lower Merion and Radnor, both big spenders, seem to be a convenient justification for the status quo, increased spending and more taxation.
          .
          My point is that TE is not the shining star anymore. TE has problems and there may be a better answer than raising taxes through a referendum that probably will not pass.

      2. Good data CitOne. Avon Grove has a district larger than TESD in enrollment, (6,850 vs. TE’s 6,350) but 21% go to Avon Grove Charter School (K-12 since 2002), and the rest of the 5,400 kids are split into four buildings: one elementary school (k-2), one intermediate school (3-6), one “middle school (7-8) and one high school. 902 kids grade K-2 are in the single elementary school. 33% of the Avon Grove budget comes from State and Federal sources. The district is ranked in the top 10% of all districts in the state. (49 out of 534 on School Digger). About 10-15% free and reduced lunch. (No data for TE, 1% for Union-CF)
        With 20% of their enrollment in a charter program, it appears there may be a savvy approach to cost management. I do think that ELL is a factor — the superintendent letter is in English and Spanish on the website.

        The comparisons to LM and Radnor are because of the demographics — and real estate choices. People wanting to live “on the main line” attend one of those 3 schools. The “big spender” may be co-incidental with the expectations of the parents. Top 10% as in Avon Grove isn’t likely to be “good enough” here in Lake Wobegon.

      3. So here’s our famous $750,000 market value house. In each place, it would be assessed (based on the 7/1/10 CLR of .55 for Chester County) at $412,500 ….
        TE Taxes: $7,692.05 (1.02% of home value)…..UCF tax: $10,337.25 (1.37% of market value).

    2. Papadick
      An EIT cannot be implemented by the district without referendum I think. WHo will make the case for it? Why do you think someone’s income should be tapped for school programs? What people make has nothing to do with where they live. Where they live is directly influenced by the quality of the schools.

      (Not sure I believe that, but that’s the argument that takes EITs down all over the state). The BOS can do it on their own.

  7. C-One and Give it a rest –

    Look, Avon Grove has much higher class sizes, much lower academic achievement, and a class size reduction task force, which you can read about on their web site. They concluded that class size reduction would benefit their students, but when you read the discussion it is apparent that they probably cannot afford to do much about it – they need more facility – one option is modular classrooms – i.e., trailers.

    The kids may be just as smart and capable of high achievement (I never assume they are less capable because of demographics) but I submit it has a lot to do with resources – that is the conclusion of the leading research study, Tennessee’s Project STAR. Kids like the ones in Avon Grove are the kind that would benefit the most for smaller class sizes.

    No doubt there are a lot of other things they cannot afford to do. When it comes to looking at what the other districts are doing, I thnk in this case it would be the other way around – Avon Grove would probably like to see what T/E does to get the results we get, and do the same – but they would probably find that it takes more money to do it.

    Bottom line, the kids don’t get what they deserve, and yes, it does have to do with funding. Not only that, your comparison is not valid – our costs are higher (it is a much more expensive area) and our community standards are different as well. Should we lower our standards to spend the kind of money Avon Grove spends? So far, most of our citizens have been willing to support the superior quality educational program in T/E and have been willing to support the taxes to pay for it.

    That may be changing now, with the economy and budget crunch. I sincerely hope not, but that remains to be seen. I am always amazed when we say we can’t afford quality public education. As a society, our priorities are all wrong.

    1. Kevin,
      .
      You said, “Avon Grove would probably like to see what T/E does to get the results we get, and do the same – but they would probably find that it takes more money to do it.”
      .
      You are repeating the popular myth that higher spending results in a better education. Its a comforting myth for school directors that want to avoid tough spending decisions. It’s a lucrative myth for the TEEA. Every major study concludes that a district’s academic achievement is correlated to parental education and poverty. Notice, these two variables are outside the control of the school board. There is no correlation with sending.
      .
      The reason AG has lower academic achievement is not because of spending; it’s because of their demographics.
      .
      As for the Tennessee STAR project – the results are questionable, the effect (very small) is significant only for low socioeconomic children in grades 1-3 (not applixcable for TE), the cost to implement small classes is high and the benefit low.

      1. Said this earlier and no response: “higher spending” is the myth. Unless you look at individual costs of educating students (there are some students with an annual cost exceeding $50K), spending per student is a mathematical average. Debt service being part of it — which means how new are your buildings. TEEA does reap the benefits — which is what has to change.

        For TESD, lower taxes is the reality. The demographics with UCF are the example.

        So here’s our famous $750,000 market value house. In each place, it would be assessed (based on the 7/1/10 CLR of .55 for Chester County) at $412,500 ….
        TE Taxes: $7,692.05 (1.02% of home value)…..UCF tax: $10,337.25 (1.37% of market value). TE’s higher spending is subsidized by a corporate property tax, at the same rate as a house property tax. Don’t see the problem.

        1. rest,

          Your example of two $750K homes; one in TE and one in UCF has a fatal flaw. You’ve assumed that the houses are equal. What you’ll find is that a consumer can buy a bigger, better house in UCF for $750K because the taxes are higher. That seems counter intuitive, so let’s do a mental exercise.
          .
          Let’s suppose there is a street that runs along the border of UCF and TE. A developer builds 20 houses that are exactly the same. Ten are on the UCF side of the street; ten are on the TE side of the street. The builder prices them all exactly the same at $750K. The builder quickly sells five of the houses at the asking price of $750K and notices all five are on the same side of the street.- the TE side. Why? It’s not the schools – they’re the same. It’s the taxes, of course. The owner of the house on the TE side pays $2,700 less each year in taxes. How much does the developer have to reduce the selling price on the UCF side to make the houses equally attractive? That requires the builder the capitalize the tax difference into the selling price. The present value of 25 years of $2,700 dollar payments is about $40,000. Thus, the developer has to reduce the selling price of the UCF homes by $40,000 to $710,000 so all the houses are equally attractive.
          .
          A year later, all 20 owners are at a block party. One of the TE residents says to a UCF resident, “Our school board is doing a great job because our millage rate is lower and we pay $2,700 less in RE taxes.” The UCF resident replies, “Not true; you may pay $2,700 less in RE taxes, but I pay $2,700 less in principal and interest payments”. Thus, taxes are capitalized into the selling price of homes and millage rates are a meaningless indicator of district performance.

  8. Kevin
    I was not praising AG — but they do not have “much lower” academic achievement. Clearly their community makes do with less. My final comment was about the fact that Radnor and LM ARE the districts we compare ourselves to, because they are the districts with similar parent demographics and thus similar expectations. It’s not coincidental that all the major private schools draw from these three communities. Parents are willing to spend money for their kids education. The problem is that there is a depression going on — and somehow TE is celebrating things like “pay waivers” which means they are giving smaller raises….and still paying too much for health care.
    Someone above mentioned the health care of public sector — I think they meant private sector, because I know that ONLY public sector jobs come with an expectation of great benefits….because the public sector has no productivity measurements.
    I think CitOne provided good data. My point is that there is always more to the data, and Avon Grove, with only four buildings and 20% in charter schools, is “the rest of the story.” I think the key element to review is that 20% are in a charter school. THAT is how you bypass state mandates.

  9. I have discussed the Unionville-Chadds Ford school district (specifically their ongoing teacher contract negotiations) so found this information from their last school board meeting of interest – particularly the PSERS situation. At least one U-CF school board member is relying on the pension problem to be fixed in Harrisburg. You get a sense that at Ms. Manzone doesn’t view PSERS as a local school district concern.

    Excerpt from Chester County Press, http://www.chescopress.com article:

    The Unionville-Chadds Ford School Board unanimously decided to keep transportation in-house, at least for the near future. According to the district, it costs about $4 million per year to fund transportation. The transportation department came up with a tangible list of efficiencies that, after implementation, would cost the district $85,000 less per year over five years.

    Board members stressed that there is still uncertainty, especially when looking at PSERS – rates are expected to greatly rise in the coming years. Regarding PSERS, Board Member Holly Manzone commented that the state can’t bankrupt all the school districts in Pennsylvania by letting it continue as projected. Something will be done at the state level, she stressed.

    When adding the intangibles, like service and care for the students, to the savings, Hellrung called the decision to keep the current transportation system “a no-brainer.”

    Response from U-CF school district resident:

    U-CF School Board is hypocritical — The Unionville-Chadds Ford School Board members turned into hypocrites by voting not to outsource transportation services.
    These elected officials “turned chicken” and walked away from savings of $2.5 million to $3.8 million over five years, while holding the district’s teachers hostage and scapegoats–because they have no money. If you’re serious about savings money, everything is on the table; there are no sacred cows. The Unionville-Chadds Ford School Board showed its real stripes by buckling to the wishes of the “soccer moms.”

  10. How can a board member emphasize the escalating costs of a state pension plan, and then vote to keep transportation in house, where every bus driver is part of that pension plan? To stay popular with their peers. Does this member HAVE kids in the schools? (I’m betting yes….) Getting re-elected (anti-taxpayer vote) often is not a goal….who would want it?
    This in a district where the community voted down renovating their high school…

    1. I follow the UCF district closely. They’ve examined outsourcing and concluded it’s more cost effective, even with the PSERS burden, to stay with the in house service after give backs from the staff. http://www.ucfsd.org/~boarddocs/FOV1-00037F90/FOV1-000437BE/Transportation%20Numbers,%20KKnauss,%205-27-11.pdf?FCItemID=S0348C9B2&Plugin=Loft

      Some points –
      – PSERS is a relatively smaller portion of total compensation for lower salaried employees.
      – PSERS contributions are subsidized at a 50% rate by the state
      – a private transportation company needs to make a profit; a district doesn’t.

  11. PSERS is a fixed portion of every compensation dollar. Next year that could run 20%. Any decision has lots of layers, but you cannot denounce the cost of PSERS and then conclude that keeping jobs in-house is the way to go. Just not a compatible conclusion. Non-district buses are used 7 days a week — evenings and weekends. District pays benefits and pensions and social security. Contractor pays social security. I’m not suggesting the decision is poorly constructed, but this board member needs to be consistent in her view of public sector pensions vs. private sector employment.

  12. Research is never as cut and dried as most people make it out to be. I’m sure if I wanted to spend 20 hours reading the relevant stutdes, I could shoot a lot of holes in your take on the research regarding the “popular myth” that school spending has no relationship to student achievment. It is true that to a great degree you get what you pay for and there is a level below which you begin to cut into the quality of the students’ education. You are being far too simplistic. And I could not disagree with you more about class size. I don’t want to get into that now, I already fought the class size wars (and won)..

  13. Citizen One:
    Thanks for the link. The research done by the board member of UCF is useful, but still ignores the reality of PSERS….which this year was capped at 5.64, but going forward is scheduled to see escalating rates.
    The chart below shows the 10-year projected employer contribution rates using the June 30, 2009, valuation and presumes an 8% anuall rate of return to come up with these rates. I can see why UCF publicly claims that the state will have to fix it. It will — but isn’t it a bit cavalier to ignore that reality. The calculations show a major savings from outsourcing, and then that disappears because the “staff” says they will produce $339K annually, which is what flips the balance. I’m guessing that is documented somewhere, but with all the detail, it’s kinda missing. Was it stipulated?

    10-YEAR PROJECTED EMPLOYER CONTRIBUTION RATES (Presumes an 8.0% rate of return)
    Fiscal Year
    Ending June
    Total Employer
    Contribution Rate %
    Projected Total
    Employer Contribution
    (thousands) $
    10/11 5.64
    11/12 10.59
    12/13 29.46
    13/14 32.32
    14/15 33.83
    15/16 33.49
    16/17 32.96
    17/18 32.26
    19/20 30.61

    The analysis concluded that the state sharing the cost of PSERS and FICA tilt the balance. That was using this year’s 5.64, and I would challenge the capital costs, but regardless, the rate next year is 10+…..and I didn’t see anything in the analysis for selling the existing buses. One question — they show cost of drivers/mechanics as $8M a year — and their benefits are the same. Wow.

  14. Hi rest,
    .
    The study, also available on the district’s site, looks at transportation costs, over the next 5 year period and includes the scheduled PSERS rate increases. The private providers had to submit bids for a 5 year fixed price contract. The give backs from the transportation staff have already started with staff reductions, a salary freeze, a lower cost health care plan and higher employee contributions. The author mentions that the decision may have to revisited if the PSERS rates change.

    You noticed that the benefits equal the salaries for the driver/mechanics. I believe we’d find the same ratio for the TENIG.

  15. I just read that the Oxford School District approved their final budget with a 0 percent tax increase – second year in a row. Their tax rate is 29.5479 mills, which is the same rate as the current year. I accept that Oxford SD is not TESD — just found it interesting.

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