Finally . . . Contract Agreement between Unionville-Chadds Ford School District & Teachers Union – Any lessons for T/E?

The Unionville-Chadds Ford (UCF) school district and their teachers union have finally agreed on a contract.  The UCF School District teacher’s contract expired June 30, 2010. Based on UCF contract results, any lessons for T/E school district?

I have posted periodically about UCF and the ongoing saga between the school board and the teachers union.  Unable to resolve their contract issues, the Pennsylvania Labor Relations Board appointed attorney Mariann Schick in late December 2010 to help with the bargaining impasse through a fact-finder report.

Students from the UCS and T/E school districts enjoy similar academic performances – both top performing school districts.  On the SAT and PSSA performance, both school districts score in the top 1% statewide.  T/E School District ranks #2 for SAT scores and UCF is ranked at #5 on the SAT. Due to the similarity of the academic performances in the UCS and T/E school districts, I have followed UCS school districts contract negotiations.

This is the last year in the T/E school district teacher contract . . .  will there be similar conflict between members of our board and the teacher union? The teachers of UCF worked for over a year without a contract as negotiations played out.  Do you think that there is any relationship between teachers working without a contract and the academic performance of the school district?

So what did the UCF school board and teachers union finally agreed to?  Terms include:

  • Year 1 (2010-11) no pay increase for 2010-11
  • Year 2 (2011-12) 1% increase on the pay schedule, step movement, prep level movement
  • Year 3 (2012-13) $300 in each cell on the matrix, $700 one-time bonus, step movement, prep level movement

One of the sticking points in the UCF school board – teacher contract negotiations had been healthcare.  In the agreement, the teachers will contribute 7.5% in 2011-12 and 10% in 2012-13 toward their healthcare costs.

The agreement has an interesting component for UCF high school teachers  — they will be required to participate in one open house plus an additional event per year (second open house, parent conference, field trip, school performance, etc.) I found it interesting that this element was included in the contract – it would seem that teacher’s dedication to their students would dictate their involvement in activities with the requirement that a contract forcing them to attend.

To read Unionville-Chadds Ford school district tentative teacher’s contract, click here.

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  1. Thanks for the information, Pattye. I think that this reflects today’s economic realities and has some important implications for TE.

    The increases in the salary matrix are small and the teachers are paying an increasing percentage of their healthcare premiums. Even though the annual step movement up the matrix continues, total expense increases for the district will be limited by retirements from the top end of the scale.

    The 2011/12 salaries in UCF are consistently lower than TE’s, except in the very top right of the matrix where TE has no teachers. TE’s salaries in the bottom left, where one fifth of TE’s teachers reside, are 15-20% higher. Overall, applying the UCF matrix to TE this year would reduce wage costs by about $4 million, or 11%. (Others can discuss the impact of this, if any, on the test score rankings).

    This begins to suggest a budget strategy. Since TE compensation is also at a premium to the recent Radnor contract, it is not unreasonable to expect that TE has leverage to negotiate a contract with little to no wage increase and a benefits cost decrease. That will limit overall expense increases to the increase in pension expense.

    Cover those increases for the next few years from the fund balance put aside for that purpose, until the balance is down to a reasonable level, one that maintains the bond rating. No more annual property tax increases that boil the commercial and residential property owner alive. (Especially after this year’s outrageous increase).

    At that point, there will either have been a statewide tax increase of some sort to pay for the pensions, or school districts will be on their own. In the latter case, make a choice between a 10-20% property tax increase and a 0.5% to 1% EIT.

    [Reply]

  2. Ray,

    Your expectation for a contract that “will limit overall expense increases to the increase in pension expense” is a bit unrealistic.

    By law, school districts that cannot reach a contract agreement with their teachers enter a “status quo” period where the District and the teachers are bound by the terms of the expired contract. Teachers continue to teach while receiving the same pay and benefits specified by the expired contract. Pay is frozen, but health care costs (8% to 12%/yr) and pension costs (50% to 100%/yr) continue to rise and the taxpayer is on the hook for any increases. Essentially, the status quo law forms a 2% to 3% per year compensation floor increase under which no contract settlement is possible.

    The status quo is the floor. If TE wants labor harmony the next contract will have to offer a monetary premium. Otherwise TE will endure labor unrest not limited to the following:
    an increase in the number of grievances, union news releases indicating the board’s team is stalling, attacks on the integrity and competence of the board’s negotiating team, rumors and half-truths spread among union membership to leverage support for the union’s bargaining team, direct pleas to individual board members, phone calls to key people and groups within the community, letters to the editor from sympathetic community members, mass attendance at board meetings, public comment at board meetings urging the board to settle, the filing of unfair labor practice charges, Fact Finding, work to rule and possibly a strike.

    [Reply]

  3. Keith — in my opinion, you are absolutely correct. Not sure by your comments if you are advocating that the district offer this “monetary” premium, but this next contract is TOTALLY in the hands of the union. Status Quo will be an annual raise of some significant magnitude, as health care and pension costs are likely to be what negotiators attempt to protect, and status quo is the best way to protect it.

    Without examing the matrix (where the bodies are) compared to the schedule (how much the FTEs make), it’s hard to know where they will have to go. I presume Ray has done so with his suggestion that using the UCF schedule would result in $4M in savings….but no one working for TESD will have to take any pay cut — no going backwards on the existing steps in place. IE Masters plus 15 on step 9 for this school year earns $82,680 for this year (actually they don’t move to that specific number until mid-year because of the deferral….), but they do advance to that number this year and that is the least they can make going forward. (FYI _- if they had 15 less credits, i.e., just a masters’ degree, they would only make $65,500….which is why educational advancement can be quite costly depending on where the employee is on the schedule).

    The final paragraph in Keith’s post is absolutely what you can predict – UNLESS the teachers across the state start to understand the economic realities of keeping a very good job, or losing lots of them. In districts with largely senior people, the union is top-heavy and those people don’t get as many raises anyway. If the staff is somewhat younger, you have people trying to get tenure and start career paths, and they don’t need family medical anyway, so there are opportunities to help educate people on the difference between cost of benefits vs. cost of insurance vs. free health care. The premise behind most of the negotiating state wide is that they don’t care what the insurance cost — they don’t want increasing copays or deductibles …..it’s a really hard lesson to learn. Getting someone to pay a percentage of their health care costs is a step, but it does not in any way advance the idea of educating teachers as consumers of the service.

    It’s not easy folks. We are electing a whole bunch of board seats this year. PLEASE talk thoughtfully to the candidates — do not allow anyone to tell you “they want a great education system at a reasonable cost to the taxpayer.” See if they understand the issues — even if they are sitting board members, they truly may not. These people will be your voice in talking to the people who teach your children. What can you support? As Keith says above — what are you going to do when your kids are home for a few days and you are hearing anecdotal comments about how teachers are suffering, or the board is being stubborn. One thing to remember — IF a strike takes place, teachers do not lose a dime of salary. Zero. They get a salary for a year, however long that year ends up taking. And if they come back to work without a contract, the existing deal stays in place. SO exactly where is the power in this state? NOT on the board — so the people you elect will have to be able to work with the union….and will have to have ideas about how to do that.

    It doesn’t matter how we got here…the economy is a problem and we have to find a way forward.

    [Reply]

  4. Some good comments here, but let’s not forget that this is a complex chess game and you have to think many moves ahead based on a detailed knowledge of today’s position, BUT – unlike chess – the game need not be zero sum.

    I do agree with the list of union tactics that have proven successful in the past. My point was that the taxpayers now have the high ground, and can negotiate from strength. Also, note that the list of union tactics just hasn’t worked out too well for them in Neshaminy.

    So let’s think about who’s sitting across the chess board: one third of teachers on the top step, but also over one half of them in the “sweet spot” from steps 6 to 15 where the average STEP increase ranges from 10 to 16% (really!), and some step increases are over 25%….

    So for the latter group, it’s really important that their step position is not frozen.

    Now, what would they concede on healthcare? Well maybe quite likely a majority would agree that the current “Cadillac” plan is a luxury. Would they not trade off getting back on the steps with their $5,000 plus annual salary increase (regardless of whether the steps themselves actually increase) for paying a share of a lower cost healthplan that incents them to manage their healthcare costs more aggressively? And could that not result in lower costs for the district?

    So, you can either lay down your king right now, or look for ways in which the kids can actually win.

    [Reply]

  5. Thinking out loud Ray. Good job. And it’s not chess if both sides don’t agree to play. My point is that this one is comlpetely on the side of the teachers. They will dictate the tone. Unless I am mistaken, the PSEA comes to the table in every situation with a game plan. They meet every summer across the state in Hershey and set state goals and contract goals and demands. Younger teachers may be motivated to move on the schedule, but they also are relatively reliant on the union to guide them. Let’s hope the union understands they can preserve more good jobs if they dont’ insist on making them great ones.

    [Reply]

  6. Ray,

    I don’t think anyone is advocating that TE should “lay down your king right now”. I’m just repeating the obvious – the union will extract a premium above the status quo to settle. The board’s job is to minimize that premium. The magnitude of the premium is inversely related to the amount of labor action the community is willing to endure.

    Trading decreased health care costs for higher salaries seems logical to you and me, but there are barriers to a logical, reasonable settlement. The negotiators at the table may not represent the best interests of the membership, but rather their own personal interests. The PSEA representative heavily influences the process, but has goals that may conflict with those of the membership. The negotiators at the table may be skewed toward those at the top step and be insensitive to the needs of the younger teachers – or vice versa. Accurate information may or may not be transmitted to the membership and even if it is, the membership may be disinterested or not be capable of understanding the implications.

    Ray has an interesting strategy – draw down the fund balance and then make the voters choose between “a 10-20% property tax increase and a 0.5% to 1% EIT.” This is a risky strategy. The electorate may choose neither and force the district into a 10% to 20% staff reduction.

    [Reply]

    Ray Clarke Reply:

    To the last para, at least the voters would have a direct say. The odds are probably against such an approach anyway – the political class (incumbents and aspirants) favor incremental increases that taxpayers don’t notice before they are well and truly cooked.

    [Reply]

    Keith Knauss Reply:

    I like the idea of letting the voters have a direct say. Why wait until the fund balance is drawn down? TE has a current operating deficit and one that is projected to increase, I believe, in the coming years. Go out for a referendum in April with the ballot question, “Do you favor increasing taxes by x% to fund employee compensation?”

    If the voters say yes, then the fiscal problem is solved. If the voters say no, then the directors and teachers know furloughs have a high probability of occurring.

    [Reply]

  7. Consider the new book “That Used to be Us” — and decide just when America (and this community) turned a corner and decided no social contracts were worth honoring once your kids were finished.

    Asking the voters to make the decision presumes the voters will choose wisely, and not just based on expedience. Maybe I’m jaded — but after doing 3 teacher contracts, and not being able to get people to attend meetings unless I moved a bus stop, I don’t think the people without kids in school have any investment in the process. That said, I”m for a major student activity fee. Major. And would have ot be convinced that current populations should not be funding their own programs, either by fundraising (read: boosters) or by writing their own checks.

    [Reply]

  8. I wonder what the Board would do with a proposal from the Union to maintain the current starting salaries for the entire life of the contract. This would indeed save money for the district and allow the proven teachers to be rewarded for their contributions.
    My bet is that the School Board would object to such a suggestion – in fact they may be screaming “how are we to attract new teachers and compete against Lower Merion, Radnor etc……..
    I say give a try and put the blame where it belongs – on the Board.
    By the way – just heard that the staff at New Eagle has been recognized as a national Blue Ribbon School. Congrats to Principal White and her dedicated staff.

    [Reply]

  9. Andrea, why wouldn’t voters chose wisely? If the voters aren’t responsible, then who would be? We elect board members. Should we not do that either because we are not responsible? I would like to think that if all issues are made public clearly then the voters would be informed? The electorate in Tred and Easttown have been noted for their intelligence, education background and concern for all qualities of our community. Whats the beef?

    Sort of reminds me of a caller to a radio show who said millionaires and billionaires should give up most of their money to the government because those who earned it really don’t know how to use it, and that the government knows better. Don’t think so.

    It seems there are 2 distinct parties of interest in our community, those w/o kids and those with kids. I say let the chips fall where they may with a referendum.

    [Reply]

    Andrea Reply:

    You have considerably more faith in a reasonable electorate than I do. My purpose in posting here is to ask readers to challenge the candidates as to their approach. If I read one more “reasonable cost” promise I will faint. Look at the demographics of the people running for the board too. What is in THEIR best interest? One of the reasons I resigned a decade ago was that I began to believe THAT was almost becoming a guiding principle. When they spent so much money on the football stadium, I was done. We can look at lots of ways to try to minimize the increases, but the reality is that the assessment base is shrinking with the reassessments promised and achieved, so it will take almost a COLA increase in the millage (presumably Act 1?) to freeze costs. And FTW — I agree — it is not the TEACHERS, it is the PSEA. Which is why my original premise above is that this next “negotiation” will be in their hands. If they are reasonable, it will go well. If they are not, there is nothing the board can do about costs because health care increases and PSERS will drive costs far more than any modificaitons to the salary schedule.
    The breakage from retiring teachers being replaced by less expensive teachers can be significant (I haven’t looked at the matrix in 10 years), but it also can be completely unpredictable, because in this economy, each employee continues to accrue 2.5% a year towards their pension, and with no health care included in retirement payments, there is less of a rush to the finish line. Then again, if a teacher retires after 30 years making $85,000, the pension payout will approach $64,000 a year free of PA taxes plus social security and medicare. Increases in class size across the state will mean that PSERS will have the same actuarial crisis that SS is facing — fewer people paying in to support the pay out.

    Bottom line for me — it’s complicated. REALLY complicated. And if the electorate turns everything down in a referendum, EIT or not, there is no reduction in compensation allowed. The key here is that younger teachers will want to keep their jobs, and older teachers will automatically get to keep their jobs, even if it’s at a wage freeze. So the balance of power between younger teachers looking for security and bigger raises and older teachers just building their pensions will influence if not determine the outcome.

    You can blame the current contract on the board, but I will say again that this community likes peace — and they have had it. I don’t believe the board, which gets turned over every few years, is up to a fight with the union. THey accepted the mini freeze this year but did so in exchange for no layoffs. Layoffs are their only weapon.

    But this discussion is useful. Make sure it extends to the election.

    [Reply]

  10. Ray has an interesting strategy – draw down the fund balance and then make the voters choose between “a 10-20% property tax increase and a 0.5% to 1% EIT.” This is a risky strategy. The electorate may choose neither and force the district into a 10% to 20% staff reduction.

    ******************

    How about if we just get real on the next contract and stand strong against the union’s normal strong-arm tactics?

    I know that is dreaming, but it would be nice.

    The teachers union — NOT the teachers — have to start realizing that the people who pay their salaries, benefits, accrued sick leave, pensions and other benefits can’t afford anymore and being realistic. The days of guaranteed increases, STEP increases, tuition payments, etc. need to come to an end.

    I know teachers work hard and I value their contribution. But guess what, I work hard too and don’t get any of the guarantees they do — and I have to work all year. And, I have to make money off other businesses, etc. who are struggling as well — I can’t just force them to pay me more the way the unions try to.

    The world is changing and the unions are going to have to change with it, or they will find out that people will push them out of the system entirely.

    [Reply]

    Ray Clarke Reply:

    So, here’s the thing: suppose the next contract has NO net compensation increase (does this count as standing strong?): either no raises and no step movement, or any changes are offset by retirement of higher cost employees, by 2015 the district PSERS expense will still have increased by $8.6 million, or a factor of 2.8x. And it will stay at that level for a decade or more.

    Where is that annual $8.6 million to come from? From the fund balance for a year or two, maybe. From a decrease in PSERS expense from a pension reduction that requires a change in the state constitution? From a state bond issue? From expense cuts (probably a big increase in class size, no school buses, etc.)? From a 10% property tax increase? From a 0.5% EIT?

    I wonder if anyone at the state level is taking a systemwide look at this.

    [Reply]

  11. Ray,

    Does that $8.6M number take into consideration the 50% state reimbursement? If not, the 10% RE tax increase really is a 5% increase. And the extra 5% (done over a few years) tax increase is possible without referendum with the PSERS exception. But, if I understand TE’s situation correctly, the problem is not PSERS. It’s the union contract signed years ago that burdens the district with far above Index compensation increases causing a large current operating deficit. This is a problem caused by local elected politicians and will, probably, have to be solved locally.

    On the state level there are several education bills in progress and you can view them at the PSBA web site:
    http://capwiz.com/psba/issues/bills/

    One that is not mentioned is HB1369 which prohibits strikes and requires transparency.
    http://www.legis.state.pa.us/cfdocs/billinfo/billinfo.cfm?syear=2011&sind=0&body=H&type=B&BN=1369

    [Reply]

    Ray Clarke Reply:

    Keith

    Yes, the $8.6 million cost increase is after the 50% state reimbursement, and No, the problem is not the current TEEA contract, for which this is the last year (but you are right that this contract gave increases far in excess of CPI and any other relevant index, resulting in compensation that seems to be the highest in the region, across the salary matrix).

    The next contract has been the subject of discussion here, and the district’s five year projection model assumes that wage compensation is flat over its timeframe. Perhaps it is feasible to think that [wages + benefits] can be held to the total in the model, but anything more costly than that would add to the deficit.

    As far as I know, there are no bills in the legislature that will address PSERS benefits or funding. They are working on a defined contribution plan for new employees, but that won’t do much for the current problem.

    The five year projection model was included in the materials at the last TSG meeting (and perhaps also discussed at the Finance Committee?). The district has committed to publish all TSG information on the web site. The model is a simple page that lays out the budget (im)balance and Fund Balance, and should be required reading for all residents.

    (Including for those Republican candidates that are posting signs committing to no income tax in Tredyffrin, but not specifying their alternative proposal: increased class sizes? referendum on property taxes?)

    [Reply]

  12. Ray,

    Please check your assertion that the $8.6M PSERS increase is after the 50% state reimbursement. I cannot find any 5 year projection as part of the TSG information. However, I can find one as part of the May 2, 2011 Finance Committee meeting. Those PSERS figures show an $8.6M increase, but clearly those figures are before the state reimbursement.

    Also, the 5 year projection assumes no local real estate tax revenue increase either from the Act 1 Index or the Act 1 Index plus exceptions. I find this very, very strange and misleading. Am I missing something? I’d be asking for a 5 year projection with reasonable assumptions for the Act 1 Index, exceptions, salaries and benefits.

    Let’s remember that the Act 1 PSERS exceptions exactly covers the $8.6M ($4.3M) PSERS increase (as long as the assessment base remains the same). If salaries+health care are kept within the the Act 1 Index it would go a long way toward a balanced budget..

    [Reply]

    Ray Clarke Reply:

    I think that you do have it right – the state revenue does increase by $4.3 million in the model to offset half the expense. Since the model has the total deficit increasing by $15 million or more I had made a short cut and assumed that most of that was due to the PSERS net increase. In fact the model has other benefits and other expenses both increasing by $5 million (10% and ~4% annually respectively).

    That does bring us back to the same question – your assumption that it is OK to slowly boil the property owner alive. Would it be better economics to use the fund balance and then institute a residential EIT that many residents pay anyway?

    Hopefully the TSG can bring some facts and data to this question, and the voters will be allowed to make a decision.

    Sorry about my confusion there.

    [Reply]

  13. I don’t have a strong opinion about whether to implement an EIT or continue only with the RE taxes. And I don’t have a strong preference for raising RE taxes a little bit each year rather than implementing an EIT which would raise taxes abruptly. However, the advantage of the “slow boil” is that it can be done without a referendum.

    [Reply]

    From the West Reply:

    Keith —

    The problem is, there isn’t a choice BETWEEN an EIT or RE taxes. It is a both or one proposition.

    The EIT as they are discussing it is in addition to property taxes. There is NO required dollar for dollar offset to property taxes if an EIT is implemented.

    That means two things:

    1 – you will be paying twice
    2 – the teachers’ union will now look greedily at two pots of your money instead of one

    [Reply]

    Keith Knauss Reply:

    Hi West,

    My unstated assumption was that if an EIT was implemented the board would be good stewards of the public’s money, be fiscally responsible and reduce RE taxes appropriately. Looking back at the last teacher’s contract I see that was an inappropriate assumption. It illustrates that 5 of 9 votes can cause problems that last way past the time those board members leave public office.

    Would you support an EIT if the board promised an appropriate reduction in RE taxes?

    [Reply]

    Kevin Grewell Reply:

    Keith,

    The public had the opportunity to enact an income tax under Act 1 of 2006 – a specific tax shift from RE tax to income tax, and it was overwhelmingly rejected at the polls. (The Act 1 tax proposed was a PIT, not an EIT, but the outcome would have been the same if an EIT had been proposed – there was overwhelming opposition to any form of income tax)

    As for the board voluntarily promising to reduce RE by an amount equal to EIT revenue (or by any amount for that matter) you can forget it. Given the projected costs of PSERS and health care, and the fact that the state legislature is very unlikely to take any meaningful action to help (if past performance is any guide), there is no way any board can make that promise. Any EIT discussion currenlty is a discussion about an additional tax and an additional revenue source.

    I suppose it is possible that an EIT would take some pressure off of RE tax, and thus future RE tax increases migh be reduced somewhat, but a reduction is not likely.

    Keith Knauss Reply:

    Kevin,

    I think we need some “seat of the pants” numbers to help us understand the situation. The TSG report does not mention any estimate of the revenue that could be expected from an EIT so we’ll have to do our own estimation. If I look at the recent TSG report on page 83 the taxable income subject to the EIT was about $2.3B in 2008. TESD could, at maximum, claim 1% of that amount or $23M. Do I have that right?

    The township is entitled to half of the 1% and some workers could claim the Philadelphia exception so maybe TESD would end up with a minimum of $10M from an EIT. That is significant! It equates to a 12% RE tax hike. It would more than compensate for the $4M operating deficit this year. I would expect that the board could have a, maybe, 5% one-time RE tax reduction in the 1st year of the EIT followed by normal Act 1 Index plus exceptions increases.

    To be clear, I’m not in favor of an EIT, I’m just exploring.

    From the West Reply:

    Personally, I wouldn’t support an EIT even if there was a required offset for a myriad of reasons. I will admit that the arguments for it would become more legitimate to me though.

    Plus, when the economy tanks (like now) that means the EIT tanks as well, then we have a big funding problem. This, however, is a generic problems with an EIT. Specific to this discussion is that it is pretty clear that, right now, the TSG has way too few facts to make any decision (as outlined by many comments on this post). Unless/until that is rectified, no one can take anything they propose seriously.

    Additional Perspective Reply:

    I wouldn’t support an EIT even with a promise of a reduction in property taxes. There are two reasons:

    1) The promise of real estate tax reduction is not binding on a future board. Even if the current board promised to reduce property taxes, they are not bound by that promise nor is a subsequent board. So it is very likely that any gains from the EIT would be taken by the unions as raises in future contracts.

    2) I question the fairness of the EIT. It won’t impact the people already paying an EIT in other districts. It won’t impact the retired. But it is a big tax hike on those not currently paying an EIT– working families. Also, an EIT won’t impact the truly wealthy since their earnings come from investments and not earned income. But it will impact renters and anyone who lives or works in T/E — including teenagers or college students who are working in restaurants or stores for extra cash. Meanwhile you could be comfortably retired with hundreds of thousands in investment income and pay nothing additional. This is balancing the budget on the backs of working families in exchange for a supposed promise of real estate tax reduction that lasts 1 or 2 years at most. But people will likely vote according to how the tax impacts them…it’s easy to vote yes on a tax that doesn’t impact you personally.

  14. Keith,

    Your comment above is well taken – we don’t have numbers here, and the TSC should eventually provide some current and hopefully accurate estimates, at which time this discussion will become much more meaningful. I will be happy to admit I am wrong if it ever occurs that a RE tax reduction is enacted. From my perspective, based upon past experience and current data, I still think it is not likely that any board will reduce RE taxes. But you may be right. We’ll see – I will be very interested to see what ultimately comes out of the TSC.

    [Reply]

  15. Seems moot to me — I don’t see this electorate in any scenario approving it. It’s exactly because there is no assurance that it just doesn’t provide a bigger pie.

    [Reply]

  16. There’s one way to reduce real estate taxes: stop ANY increases until the Fund Balance is down to a reasonable level. Thereby, keep pressure on expenses. When there’s no other option but to raise revenue, have voters make a choice between a big property tax increase and an EIT.

    [Reply]

    Additional Perspective Reply:

    Then people should ask school board candidates how they feel about your proposal– which seems reasonable to me. But it doesn’t seem like the board would agree with you…they are all about the status quo.

    Our current board just raises taxes to the legal maximum, and the Administration seems downright focused on campaigning to get voters to pass an EIT. For example, check out see articles like this:
    http://te.patch.com/articles/the-bottom-line-why-te-is-even-looking-at-the-possibility-of-an-earned-income-tax

    Art McDonnell’s quote– while true– is definitely not neutral. It’s pretty obvious that he wants an EIT because it would make it easier to run the district without making any tough decisions. Salaries and benefits and PSERS are out of control. The only hope we have is that our state legislators will pass PSERS reform before TE goes bankrupt in three years. Since other districts across the state don’t have a fund balance or AAA bond rating, I suspect they would be begging for a state bailout even before TE.

    As a voter, I’d pass an EIT if the fund balance were exhausted and it was a choice between cutting busing and AP classes and sports and music vs an EIT. Of course, taxpayers want to preserve the quality of the schools. But don’t ask us to pay for an EIT (a new tax!) when there is a huge fund balance yet. I’ll vote for it ONLY when and if it’s truly needed.

    [Reply]

  17. I wouldn’t hold my breath for a state solution to PSERS. The state supreme court has already said benefits, once given, cannot be reduced for existing employees. The state has no extra funds to contribute to PSERS and, if they did, those funds would come from you in the form of a state income or sales tax increase. The only idea that has a small chance of success is to privatize the state stores and inject the resulting windfall into the PSERS.
    .
    Where the state can help is to reduce the power of the union through modification of the statutes covering vouchers, charter schools, furloughs, seniority, the status quo and strikes. The most important modification is to the status quo statute which guarantees teachers a minimum 3% yearly compensation increase.

    [Reply]

  18. KK — not familiar with that statute. Can you identify where I could read about it? 3% sounds like more than a wage freeze..does that mean wage freezes are illegal?

    [Reply]

  19. PA law states that when a contract expires both teachers and the District must honor the terms of the old agreement until a new agreement is reached. (there are lots of rules covered by Act 195 of 1970 and Act 88 of 1992 which I won’t go into) The teachers work, the students learn and the pays for the same salary and benefits as defined in the old contract. Salaries are frozen, BUT the district is on the hook for any increase in the cost of benefits. And benefits are rapidly increasing. The cost of health care is increasing at a 10% rate. Retirement payments are increasing at a 50% rate! You can see the effect in the 5 year projection where the Salary line item is frozen, but Benefits and PSERS Expenditure line items increase.
    .
    Page 18 of this presentation: http://www.tesd.net/cms/lib/PA01001259/Centricity/Domain/1/BdgtWkshpPres_3_28_11.pdf
    .
    It is not uncommon for private sector worker to experience salary cuts or salary freezes, a requirement to pay more for health care and skipped 401K contributions. The status quo prevents any PA school district from keeping teacher compensation constant or decreasing it to reflect our current dismal economic situation. If the contract offer from the district is not more than 3%, the teachers can just say no and receive a guaranteed 3% increase under status quo.

    [Reply]

  20. The sentence above should read –
    .
    The teachers work, the students learn and the district pays for the same salary and benefits as defined in the old contract.

    [Reply]

    Sarah Reply:

    I understand your second post, but I am asking about the “status quo” reference in your earlier post where you said teachers are guaranteed a 3% increase. That’s what confuses me. I understand that status quo is totally to the benefit of the teachers. Ray earlier said the younger teachers would fight status quo as they have big raises coming, but as long as PSEA fights for maintaining benefits and pushes for a 10 year schedule (I believe TE has 14?), the younger teachers tend to let union leadership (at the state level) call the strategy. IS there a requirement for a 3% increase?

    [Reply]

    Keith Knauss Reply:

    There is no legal requirement for a 3% increase. The 3% is just the byproduct of the 10% per year increases in health care and the 25% to 50% per year increases in PSERS contributions under status quo. However, the result is that the union will not and would be foolish to settle for anything less than that guaranteed under status quo (about 3% per year for the next several years).

    [Reply]

    Keith Knauss Reply:

    For some background –
    .
    I’m guessing the status quo law was a good idea under normal economic conditions. By normal I mean the Act 1 Index is in the 3% to 4% range and salaries in the private sector were increasing at 3% to 6%. The school board could afford 3% to 4% increases, the status quo only guaranteed 1% (PSERS was not underfunded and contribution rates for the district were constant in the 5% range) and the teachers had an incentive to settle for a raise the district could afford.
    .
    In the current economic conditions the status quo is a bad law. The district is forced into a minimum 3% raise when the Act 1 Index is in the 1% to 2% range and the community is experiencing either salary freezes or salary cuts.

    [Reply]

  21. “In ” real dollars” Teachers salaries in PA have declined by 10% since 1997…”

    How can you focus only in salaries as budget issue? Why attack the single most important factor affecting of our future citizens? Whether we ” have children” or not, we will be cared for someone’s child in our hospitals and nursing homes,etc…!
    ” a single effective primary- secondary teacher inCrEASeS a student’s EARNiNG potential as an adult exponentially “- much more effective than any college choice or career choice!
    INVEST with knowledge of WHAt equals awesome future economic growth of USA!!
    The future is ALL of ours….very egotistic to think of only our own personal experience…do the research!

    [Reply]

  22. I see Nettie is parroting the PSEA self-serving viewpoint that “In real dollars, the average salary of Pennsylvania’s teachers has declined 10 percent since 1997-98”.
    /www.psea.org/uploadedFiles/LegislationAndPolitics/Vision/Vision_Appendix_SalaryFacts.pdf
    .
    Actually, that statement is true and well documented. Does that mean we should take immediate action to raise teacher salaries? Before we do that lets take Nettie’s advice and “do the research!”
    .
    In the same PSEA study it says, “Even without adjusting for inflation, PA’s average teacher salary has only
    marginally increased at a rate of 1.8 percent per year.” And again, this seems to be a fairly meager salary increase. But the average teacher salary is NOT the same as the salary of an average teacher. If we were able to follow the salary history of an average TE teacher, Ms. Smith, over her 30 year tenure, we would find she started at $30,000 and progressed to over $100,000. That’s a compounding rate of over 4% per year . That’s well above the inflation rate and a rate increase above most workers. (and we haven’t even factored in the increase in retirement and heathcare benefits)
    .
    Nettie’s posting reminds me of the book, “Lies, damned lies, and statistics”. (the reason the average teacher salary increase is at 1.8% is due to the fact that each year many highly paid teachers retire,or move, or leave for child rearing and are replaced by lower paid novices)

    [Reply]

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