What’s the Price of a Hamburger in T/E? Property Taxes to Increase by 3.77%

In case you have not heard, the T/E School Board voted to approve the final 2011-12 budget last night . . . and yes folks; the residents of TESD will receive a 3.77% property tax increase. The vote count on the budget was 7-2; Debbie Bookstaber and Rich Brake were the dissenting votes.  I guess I should have expected this outcome, but was surprised nonetheless. I left the school board meeting feeling that the decision was preordained and that no amount of discussion was going to change anything.

At the June 1 school board meeting, the school board voted to accept the TENIG (Tredyffrin Easttown non-instructional group) union’s agreement amendment for no salary increase for 2011-12.  The school board decided not to out-source the custodial service; thus saving $300K in salaries and additionally $150K in overtime costs, for a total of approximately $450K savings to TESD.  Many of the custodial staff are T/E residents, so the board decision saved some local jobs.  

It was my understanding that at last night’s board meeting, the public would have the details about the custodian outsourcing RFP bidding process – how many custodian companies bid the job, what was the range of their bids, etc.  I was disappointed that custodian outsourcing was not on the agenda, nor was there any discussion on the topic.  If I want further information, I guess it would require filing a right-to-know request. I am not suggesting that the school board’s choice was incorrect; I just think that the public has a right to know the details pertaining to their decision.

Ray Clarke also attended the meeting last night and I am pleased to offer his notes from the meeting below.  You will note that Ray mentions school board member Kevin Buraks comparison of school district property taxes to the cost of ‘hamburgers’.  Out of context, his comparison is difficult to understand; so I have included the video clip prepared by Bob Byrne, editor of TE Patch.  To understand Buraks comparison of school district property taxes to hamburgers, you will need to click here for the video.

Ray Clark’s T/E School Board Meeting, 6/13/11 Notes 

The School Board approved by a 7-2 vote a 2011/12 budget that differed only marginally from the preliminary one, a result of removing the $150,000 contribution from the food service fund, thus increasing the draw from the general fund.

Only Debbie Bookstaber and Rich Brake were consistent in standing up for taxpayers. (On the other side, though, only Kevin Mahoney, Anne Crowley and Kevin Buraks spoke up for the budget – at their peril, though, see below. And, does Jim Bruce ever contribute anything to important issues?).

 The increase results in a millage rate calculated to six significant figures (18.6474), in order (as was stated) to capture every last cent of permissible blood from the taxpayer stone. This despite the points below made by most of the board that spoke – regardless of which way they voted!

1. The amount of year’s tax increase does not change the structural budget problem in subsequent years.

2. There is a $29 million general fund balance, earning next-to-no interest, and which will be depleted by less than 7% under the proposed budget (with another 7% contingency for everything including the kitchen sink).

3. Since the preliminary budget, the district has received $1.2 million of union sacrifices. The taxpayer sees no benefit of those.

4. Since the preliminary budget, the state house and senate are working on bills that will likely restore the >$1 million capricious social security reimbursement cut in Corbett’s budget.

5. The district has consistently over the years held the line at the Act 1 Index increase, up until now.

6. The aggregate metropolitan area is is managing with less than two thirds of T/E’s increase.

Crowley sees the maximum increase for 2011/12 as key to maintaining the education program long term, while Buraks likened the TE educational product to hamburger, priced (tax rate? tax amount? spending per student?) just less than Great Valley’s and more substantially below Lower Merion’s. Since the product is arguably at least as good, we should be just fine with increasing the price. The very same argument that the union have used for years to ratchet up compensation and get us into today’s mess!

Let’s just continue this analogy: People chose to live here because they appreciate hamburgers, and they like the value of T/E’s. Increases beyond the competition’s remove that value. They also like that the other customers share their values and that eating with them at the stand enhances the value of the meal, and indeed they volunteer at the hamburger stand to make the product even better. Nothing whatsoever to do with the amount spent for the burgers themselves. Also remember that T/E’s product is inherently better value because it has made lower cost restaurant location choices than, say, LM, and has better scale in its operations than, say, Radnor, and has more non-consuming commercial interests that contribute to its cost.

Another disappointing item on the “Consent Agenda”: the approval of pricing for contracted services for 2011/12. The Board voted to approve 10 pages of supplier prices for mostly special education services but also many facilities contractors, “orthopedic specialist”, lawyers, “schooldude.com”, etc. etc. This information was in the online agenda, but not in the meeting hand out. Why?

But that’s not the point. From the information presented there was no way to tell how prices compared with this year’s or where the spend is likely to be concentrated. We do know that the architect hourly fees are down and the solicitor costs are flat, but what about the rest? There’s a budget strategy to get supplier costs down – how much did this list contribute to that strategy? There is no indication that the Board received any information on which to base their approval of the pricing. Even though there is no commitment to purchase, this just is not acceptable governance practice.

Also: a) A lot going on in Harrisburg; unpredictable, but tending to shift the balance of power towards districts/taxpayers and away from unions, and b) Facilities wants to move forward with a trial rental of Teamer Field on week-ends, and battle lines seem to be forming.

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  1. On the Teamer rental. In a meeting with .the neighbors prior to the renovation we were “promised” that Teamer would be for student use only. For the bargain price of $1800 you can rent a 7million dollar facility.

    IF money is so tight WHY are they planning to spend 2-3 million to CRAM a new maintenance & possibly a seperate storage building on Old Lanc RD
    Last night on the consent agenda they OK’d $57,000 for the architect & engineer firm to proceed with “design plans”….this hasn’t even come up to the board for a full vote yet. ..What happens if they decide to “outsource” maintenance in the near future.. will they .tear these buildings down also???
    They paid 1.3 million for the “meadow” across the street.

    Taxpayer money flows in Facilities.

    1. for bargain price of 1800 you can rent a 7million dollar facility.

      Would rather have the 1800 than nothing. Teamer should be used for club games (rentals) . Wasted 7 million as it stands now.

  2. Watched the meeting on TV tonight. I missed a little bit of the presentation, but I got the just of it. although I would not like to see the full increase, especially if the state budget changes and the district sees more money, but I have to agree with Mr. Mahoney when he says that it would be unfair to the employees to lower the tax rate at this point. After all the employees in TEEA, TENIG and non-union employees took pay freezes and increase waivers you would really insult them by reducing the tax and not going back to the drawing board with them.

    Kevin Buraks hamburger speech was well thought up and put things in good perspective. Although it’s not completely comparable due to EIT taxes and population differences, it was a good way to look at the value of our district.

    Moving forward, I think people will need to really take a look at the EIT revenue. So many are already sending money to other districts, it would be great to keep it in the district.

    1. CJ — I attended the Public Information committee meeting yesterday which focused on the EIT Tax Study Group. The selection criteria and process was discussed and I will be writing about it later today. For those wish to apply for consideration, you have until midnight tonight (Wednesday, 6/15).

  3. All this is political double speak. Even the votes against the increase were hollow, knowing that the increase would pass. Mr. Buraks comments are demeaning but helpful — because you cannot keep saying TE kept the rates down historically and then not admit that our tax burden is lower than our neighbors. ACT 1 has been a destructive influence on the process to the extent that boards could limit the increase in taxing without explaining the true increases in spending. This board in particular has relied on the fund balance to pay current expenses more than once. I’m glad they took the food service out of the mix, because it would mean that the cost of lunch was subsidizing the deficit spending.

    Here’s my problem with Mr. Mahoney’s comments: Our unions gave up nothing but contractual promises. That is union/government marketing 101 — make the “savings” come from increases. I know the unions had “negotiated” these increases, and waiving them or deferring them can sound helpful, but the reality is that times are VERY different, and they are not giving up anything but raises. They are not paying more for benefits, they continue to be eligible for pensions, and their raises are still contracted going forward. TESD agreed not to lay them off (teachers too)….so please explain to me how there was any sacrifice but hypothetical. If your boss cancels all bonuses, did you take a cut? Nope. Well — in my view, a raise right now is a bonus in the wrong economy. People who say the teachers only got “half their raise” are wrong. Teachers only got half a year of their full raise — so their W2 will show a smalelr number than their contract, but future negotiations will be on their new, inflated base.

    So what’s it going to be. Pay people better, or ask for real sacrifice? Taxpayers are getting a deal, whether or not you like to pretend that the Act 1 increase would have been “enough.” Almost $4M of spending is coming from the savings account. I have said it before — we are using a home equity line of credit to pay our mortgage. The fund balance is there….but the expense level it is funding will come back and destroy this district.

    The comment above about looking at the EIT and how much money is leaving the district still ignores the reality that an EIT would require approval by a referendum. If people are objecting to a 3.77% tax increase on a base that is lower than our neighbors, who besides people already paying EITs would vote yes? Do more than 50% of the voters in this community pay an EIT? I’m asking. I don’t know.

    1. If you are promised by contract a specific amount of money next year and due to a change in the contract you will make less then you were promised, that is in my opinion giving up salary.

      1. Marketing 101….you are right.
        See how they own the message.

        If you are promised a raise, and don;t get it, you made a sacrifice. If the alternative is your boss laying you off, which is the bigger sacrifice? Which really IS a sacrifice. Keep a good job, or lose a great one. It’s at the heart of the outsourcing scheme.

        The board promised something they could not deliver; reneged on the delivery. “Sacrifice.”

  4. I found Burak’s hamburger analogy amusing. He’s using the spending myth to justify a tax increase. It’s the “your schools are going down hill if we don’t spend more” argument. Let’s look at SAT scores for all 60 Philadelphia area school districts and see if there is any correlation between per student spending and SAT scores. If there was a strong positive correlation we’d see an up-and-to-the-right straight line relationship where higher spending districts had higher SAT scores. What we do see on the graph referenced below is very weak or possibly no relationship between spending and SAT scores. (R^2=0.19) TE is the red diamond. The results are the same for PSSA scores. There is no evidence from the 60 Philadelphia area school districts that more spending is necessary to maintain or increase academic performance.
    https://docs.google.com/viewer?a=v&pid=explorer&chrome=true&srcid=0B__RpR-svauRYWFiZDNmNjgtNWYwYi00ZDM3LWI4NWMtY2FlMjYzYzM1NDUz&hl=en_US&authkey=CPHo4qkE
    .
    So, why does TE have such high SAT and PSSA scores? What should be done to maintain TE’s excellent schools? There are two variables that are widely recognized as being correlated with academic performance – poverty and parental education. Our 60 area districts show the same correlation as displayed in the two graphs below. Again, TE is the red diamond.
    .
    Poverty
    https://docs.google.com/viewer?a=v&pid=explorer&chrome=true&srcid=0B__RpR-svauRMzEzNDgzM2ItYjkwMS00YWJmLWJlYTQtNDE3NGY0ZDg3ZGJh&hl=en_US&authkey=COLAwZAF
    .
    Education
    https://docs.google.com/viewer?a=v&pid=explorer&chrome=true&srcid=0B__RpR-svauRMjRmMDkyNzktYjQyZC00NTc4LTk1YTQtZGQzNDg2MzZjZDg0&hl=en_US&authkey=CKyJvrcG
    .
    The conclusion is that TE’s favorable academic performance is highly correlated with their favorable demographics – low poverty and a well educated population. While we can’t prove cause and effect, there is a strong suspicion that highly educated, high earning parents demand high academic performance from their children regardless of the district’s spending level. And, of course, these demographic attributes have little to do with any decision made by the school directors, administrators or teachers.

    1. CitizenOne

      In all the data analysis, is there any study that aligns demographic attributes with noise? Parent expectations of their kids converting to parent demands of their district? Your conclusion that spending has nothing to do with achievement works, but how about achievement feeding demand and therefore bringing higher demographics into a district, along with higher expectations.

      Just asking.

      I posted elsewhere that Downingtown sent out a letter to parents announcing a significant student activity fee. Significant in that it might generate $2M for the district; $225 max per family (plus some confusion about a possible additional $25). I wanted to hear what people in our district would say to that.

      Public school. FAPE. It’s not Free….except to those attending?

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