PA School District’s Financial Problems … Taxpayers Draw the Short Straw

Pennsylvania State Education Association (PSEA) the state teachers union recently released a study, Sounding the Alarm, which looks at the financial crisis in school districts across the states.  The paper examines how districts are being forced to cut educational programming to meet the demands of school budgets because of the public schools financial crisis.

The PSEA report identifies the following five key problems that have combined to create a financial crisis in the public schools.

1. State Budget Cuts. Unprecedented state funding cuts and the elimination of key funding programs have compounded underlying, systemic problems, particularly for lower-wealth districts.

2. Charter School Payments. Charter and cyber charter school laws result in a net increase in costs to school districts.

3. Declining Tax Bases and Rate Limits. Declining local property values and caps on property tax increases have eroded school districts’ tax bases and curtailed their ability to raise much-needed revenues.

4. Underlying Fiscal Weakness.  School districts showing the greatest underlying financial weakness had fund balances averaging 1.27 percent of total expenditures. These districts tend to be relatively small, rely heavily on a single source of revenue, have a small amount of buffer within their budgets, and carry a heavy debt load. They range in type from urban school districts, to small districts in the coal regions and Monongahela Valley, to rural districts in the central and western parts of the state.

5. Pension Cost Increases. A decade-long “holiday” that allowed employers to avoid paying their share of retirement contributions, coupled with investment losses from 2008 and 2009, forced the current increase in employer payments.

In the Education section of today’s Philadelphia Inquirer, we learn that Philadelphia schools may not be opening in September due to a budget gap for 2012-13 of $218 million! The school district officials are hoping that the five unions operating in the Philadelphia public school system will ‘giveback’ $156 million to help next year’s budget.  There is discussion of privatizing the custodial services; officials think they can raise another $50 million from maintenance, transportation and custodial cutbacks.  Even if this wishful thinking translates into a reality for Philadelphia public schools, they figure they will still end up short by $94 million.

In the meantime, Mayor Nutter is trying to collect $90 million in taxes for the school district next year by shifting to AVI (Actual Value Initiative) system for property taxes.  Nutter claims that the new system will more accurately indicate the increase in market value of properties in the city but includes two tax hikes to Philadelphia’s properties owners.

Whether it’s PSEA or Mayor Nutter in the city, why is it that the solutions have one thing in common – the burden falls to the taxpayer with increased property taxes.  I’m really struggling to understand how taxpayers are going to survive the increases in the tax bills.  We all want the quality of the school districts like T/E maintained, we get that our property values are tied directly to the desirability of the educational program but … if the residents can no longer afford to live in these communities, than what difference does it make?

Layer the state funding cuts with the teacher’s pension and health care benefit cuts and add in the community’s demand for excellence in the schools and you are left wondering how are the school districts supposed to balance their budgets?  Answer seems simple … either decrease spending or increase revenue.  Problem is that the school boards are finding themselves left with few options short of jeopardizing the quality of education, as they discuss options to increase revenue.  One of the more unfavorable budget strategies left on the table is demotion of professional staff for economic reasons and increasing class size.  Of course, there was another revenue source but that option was not taken to the voters — the Earned Income Tax.  It was decided that it would not pass a voter referendum.  While that is probably correct and an EIT would not have passed, I wonder how the community is going to feel about increasing property taxes and possible decreasing property values.

Like many people in this community, I too feel the frustration as we sit on the sidelines of the District’s budget discussions and watch for updates from the teacher negotiation talks.  I have asked for transparency in the negotiation process but apparently, that is not to be … interesting to note however that in some parts of the country, teacher contract negotiations are held in the public.  For instance, in Idaho the state law allows public attendance at all labor discussions.

Below is a comment for Community Matters from a resident that shares his/her frustration:

Comment from ‘Damage Control’

T/E Budget Crisis Solved!

Move to Haiti. Yes, you’re reading this correctly— move to Haiti. Students, teachers, administrators, board and taxpayers – move to Haiti! … where they use rags as soccer balls, bicycle rims for basketball nets, parking not an issue. Teachers get paid $5,000 per school year, administrators reap $7,000 and yes, like all the other districts, the superintendent makes $10 worth of stogies (not stoga’s). Best of all, UNICEF and the Salvation Army “underwrites” the entire school system!

School board, what nerve you have in asking non-profit organizations to help with a bailout. I am not a teacher nor do I have children in attendance. I’m just an old taxpayer who sees the “writing on the wall” with this school board and this particular cost savings “strategy” is one of the reasons that prompted me to write this piece.

How dare you! How dare you ask non-profits for a handout when you have $30 million in reserve! You say this reserve money is set aside for rainy day issues, sick day payments, retirement, etc.—Total BS and I don’t mean in a masters or PhD degree sense! How dare you ask these non-profits when your net worth far exceeds any amount these local non-profits could attain even if they all pull together!

Aretha Franklin sang about RESPECT, Rodney Dangerfield got more. You, the board, gave NO respect to Ms. Whittaker, the TEEA president at the last school board meeting. Granted, you announced and stressed at the meeting that only TE residents could speak—a.k.a.—allowed to be heard. Excuse me? Is Dr. Waters a resident? He speaks at school board meetings and he commutes from a different time zone!!! And, by the way, who pays for his gas—TE resident tax payers do! A TE resident voiced that the TEEA president be heard—you board, denied that request. By denying Ms. Whittaker the 1st amendment right of every American, you fired the “first shot” deep into the bowels of the TEEA ship.

Am I just blowing smoke? Don’t think so. Threats of cutting family coverage without ability to purchase such coverage, demoting top educated and experienced teachers, over-crowded classrooms, etc. will only bring together teachers, students, parents and the many news cameras and media to every school in this top-notch and one of the richest school districts in America come this September. Lines drawn, let the battle begin—what a shame! There will be no winners.


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  1. Pingback: Community Matters » PA School District's Financial Problems … | Finance1001
  2. Is something WRONG with this “demotion” for economic reasons strategy? ABSOLUTELY! Has the board thoroughly thought through this strategy? ABSOLUTELY! Is this a strategy other school districts chose NOT to use in the way this district wants to? ABSOLUTELY! So what ‘s the PROBLEM with TE using this strategy? The PROBLEM is that the school board has decided to use this strategy as a “smoke screen” thrown out there to create FEAR among teachers—a.k.a. BULLYING! Yes BULLYING! Here we go again! Either this school board is not getting the correct “behind the scenes” information they need to make appropriate public statements regarding this current “in your face” demotion strategy or they feel it’s just easier to portray themselves as master TURTLES with a PhD in TURTLEING! If an issue comes to your attention that smells like a RAT, it is a RAT! Do your homework—Kicking around the “strategy” originating from, I assume, one of your attorneys to ARBITRARILY “demote” higher paid teachers just because it’s allowed, think again. Under School Code you cannot ARBITRARILY select the higher paid teachers.

    This school board should be intelligent and knowledgeable enough to understand that you cannot ARBITRARILY select and demote the highest paid teachers for economic reasons when there’s a seniority program in place! Aren’t you wondering why various bills were drafted to accommodate “demotion” for economic reasons in the first place? Because School Code wording does not easily address demotion for economic reasons—but it does specify that school districts must follow a seniority program for most demotions, furloughs, etc. Districts can open themselves up to an increase in litigation fees if they were to ARBITRARILY axe a higher paid “older” teacher without considering seniority such as this district wants to do. FYI–School Code does provide Miscellaneous Nondiscrimination Provisions—and AGE is one of them. Seems like this school board knows ABSOLUTELY what they are doing! FEAR is a powerful negotiator!

    Is this strategy a desperate one? ABSOLUTELY! The board is absolutely sending a message to the teachers that their experience and education is not really needed just because they make too much money. So I ask, what periodical is this board reading these days? Has anyone really given thought as to why other school districts aren’t readily jumping on the “demotion” bandwagon to save a large chunk of change? Because they know that according to School Code, they can’t ARBITRARILY select high paid teachers to demote. A significant drop in enrollment, which prompts a drastic realignment of an education delivery system inclusive of course reductions and shutting down schools, is a REAL economic reason—and in most cases, the seniority program for these teachers is still maintained. Is TE experiencing this type of dire conditions? I don’t think so!

    Has any school board member read the School Code’s section/s relating to demotions, furloughs, etc., lately? I sure hope this school board is not spending taxpayer money foolishly by accepting without debate their administrators/attorneys findings regarding specific sections of the School Code, which may have been verbally manipulated as a way to create uncertainty with the teachers. Taxpayers see this link regarding how taxpayer money is spent:

    This community deserves better from our elected officials because the teachers of TE are the ones responsible for all those prestigious rankings and they did it by working hard, not by BULLYING their students into learning. FEAR is powerful and destructive and it doesn’t belong in this school district. Communicate in a professional and effective way—don’t use STONEWALLING and SMOKESCREENS!

    So WHAT would be my cost reduction strategy? One for now is: Increase the student parking fees at Conestoga HS to at least $10/day. Seems desperate? ABSOLUTLY! What parking facility can you park your car for less than $10/day? Students’ driving to school is unnecessary unless they have a job to get to immediately after school—those students can get the fee waived or reduced. We have school buses to transport students to and from—use them! Parking along streets “with a permit only” is ludicrous. Local residents do not need student cars and “other” littering their neighborhood streets. Our buses are less than full and this district is not utilizing this transportation productively. Just imagine–$10/day x 180 student days x (aprox) 300 parking spaces = $540,000. WOW! Sound like an unfair strategy? ABSOLUTELY for some! But don’t forget about the unfair “SCARE” tactics imposed on teachers–and oh, why does the school board feel that they can ask local non-profits for bail out money? That’s downright rude! What nerve—and you think asking for higher parking fees may be a bit unfair? The district’s fund balance is more than $30 million!

    Another strategy suggestion: Instead of wasting time on a strategy that may generate a few pennies from local non-profits, why doesn’t the board look towards “apartment complexes” to see how many children attend or could attend our schools? Maybe the tax base for these apartment complexes needs to be adjusted!!!

    And, then there’s the $30+ million fund balance—use some of it!

    Placing an extreme emphasis on the retirement fiasco is also not necessary. What would happen down the road when none of the school districts can afford the plan? Will they be bought out by the State of PA—I don’t think so—PA won’t have the money either! This is a PA thing and eventually all PA taxpayers will have to pay up. What many may not realize is that there is not only a school employee pension fund, there is also a state employee pension fund—and PA guarantees both. Do I need to say anymore?

    If school board feels that in order to stay afloat, they must “SCARE” their most educated and experienced staff, consolidate classes to the point that students are sitting on the floor and making teachers unavailable for students, then eventually, the “proud” from that most popular phrase around—TE Proud—will be diminished or should I say . . . demoted.

    I’m an elderly “streetwise” taxpayer and my suggestion for this board is to reset your tone with teachers and move forward with negotiations in a more positive way—and, don’t contract out this process—do it yourselves!


  3. with the 2 pension funds you listed, it leads me to think that someone really gave away the store in years past. Poor planning and a kick in the seat to pa taxpayers who you want to “pay up”. We are paying up. Frankly as the tough union negotiators are, I want those negotiating on behalf of you and me and the other hard hit taxpayers to take the gloves off and get us a good deal. Do I want to beat the teachers UNION into submission, maybe. Do I want to bring the teachers into poverty or have them flea? NO way. Sure, negotiate in good faith, but this merry go round has to stop.


    Township Reader Reply:

    FF == there is no winning. The deck is stacked. You need the teachers to reflect what some on this site have — to realize that the days of raises and benefits are ending. NO one can take their pension away. So — we foot the bill. The secret is to be sure what the teachers are saying at the table is what their rank and file accept…and right now, I’ll bet whatever that is not happening.


  4. MimiM
    Unless you are a teacher and have sat on a negotiating committee, your perspective is rather misguided.
    1. Parking fees at Conestoga: who are you kidding? Really. Do you think meters are the right idea? How about a full time parking monitor? After all, we could charge more for school lunches. We just had an uproar about the possibility of student activity fees. We are levying $50 per child. Great Valley levies $50 per child per activity, with a max of $450 (per family I believe).

    2. “All those apartments” and those kids. Beaumont Elementary was built in response to the construction of what was then called Devon Strafford apartments. The school district has zero influence on the residents in those buildings….only that they owe them a free and appropriate public education.

    The question about non-profit property tax is just that — a question. Who cares. They have to think outside the box. The demotion strategy is another example. since your cost reduction strategies offer little promise, what do you suggest next? Okay — let’s fill the gap this year with $1.5M from the reserve. So next year, we can use the reserve again…and then the next year….and then the next…and then there will be no reserve and no right to raise taxes to cover expenses. Oh wait — that’s what has happened with the pension plan. Underfunding.

    I have said it earlier and will plead again. LET THE RHETORIC play out. The only people scaring the teachers are their own representatives. The board floats ideas because they have few to offer — their hands are tied. Ironic that the PSEA writes a paper about the funding problems, but ignores the elephant in the room. The cost of labor.

    No one thinks demoting PhDs is a good idea, but if you are a PhD making $106,000 teaching 5 or 6 small sections a day, with a $21,000 health care plan — you can teach 3 periods a day and only cost the district $53,000. So demoting you saves one full person plus the cost of benefits.

    As to the “no family coverage” — that has always been purely hype coming from the union. Regardless of how intent was worded, it is a reminder that asking teachers to ante up is hardly drastic — given the extreme of not allowing them to buy coverage. Again — the board can float any ideas. It is unfortunate that the contract in place stays in place until any changes are agreed to. So exactly where is the bullying?

    Sit tight. Stop with the hype! And of course they are using a professional — ask the teachers to do it themselves….but they don’t. It’s just leveling the playing field. The board members are volunteers…unpaid and in some cases not ready for a negotiating situation. The teachers have their rep. Why shouldn’t the board?


    TESD Taxpayer Reply:

    TR, You write, “The teachers have their rep. Why shouldn’t the board?”

    I’d like to know who is representing the taxpayers during these negotiations! Would that be the hired legal counsel — wonder what his legal fee will be? Or is it the 3 employees of the school district? At least if there was a school board member at the negotiating table, that person would be a TESD resident.

    The taxpayers have no one representing them!! What does it take to get transparency in the process. Guess the taxpayers are not entitled to know what is going on, we just get stuck paying the tax bill!


    John Reply:

    Parking fees (albeit minimal) already exists. Not sure what they are but they were also increased significantly recently. There is room for more and I agree that buses should be utilized – I’m a bit tired of seeing empty buses crisscrossing the district daily. But bear in mind that lessening the number of student drivers will likely lead to most of those students being driven to school.

    Oh and the lots are already monitored.


  5. The taxpayers are represented by people they elect to serve on the board. You have every right to challenge the process and disagree with their approach, but the taxpayers are represented. It’s silly to suggest they are not. Negotiations are a professional process nowadays. THe PSEA provides a representative to do all the talking for the teachers. The complaints about the last contract the district signed should be enough proof that they did it on their own and didn’t get it right.

    I found it disappointing that the teachers are manipulated by this process because they listen to the rhetoric (their own reps don’t tell them the facts), and the taxpayers are buying into the rhetoric.

    Give it a rest. “Guess the taxpayers are not entitled to know what is going on” is your assumption. The decision not to share the information is made at the table. You have every right to challenge it. But remember — the board has no power in this process. None. What is in place is what they must live with unless they negotiate a different deal.

    Next time, don’t listen to rhetoric in elections. Ask questions of the candidates. Karen Cruikshank was a very easy winner — and she is on record saying our staff may as well not improve their education. Now — is that strategy or what she believes? Ask her.


    Pattye Benson Reply:

    You are right that the taxpayers are represented by those we elect. The problem is that we didn’t elect any of the 4 people sitting at the negotiating table. I absolutely believe that at least one of the school board members should be sitting at the table. When I cast my vote for a school board member, I assumed that they would be directly involved in the negotiations — and for me, as a taxpayer, that means sitting in the room, at the table. I heard Karen at the school board meeting say that the school board members spent much time coming up with the direction for the negotiating team to act on their behalf. Sorry, for me that means at least one of them needs to be at least in the room for all discussions. That’s what I expected when I cast my vote & I don’t think that is a “silly suggestion”.


    Township Reader Reply:

    I don’t know how they are doing it right now, but if it’s like it has been in past negotiations, the committee is on-site while the negotiators are in the room. I absolutely do not agree that any of the 3 administrators should be there — but I also don’t think anything is accomplished by the board members being at the table. They have hired an attorney — a defendant who defends himself has a fool for a client. The last contract was a fiasco. Why not try a different strategy? This concern that people who didn’t have the courage to take an EIT to the voters, nor the sense to understand the outcome of the last contract (and the PSERS forecast rate increases) is fine to talk about, but in practice, has little outcome except a distraction.
    And at the risk of sounding more knowledgable than I am about this, we can all go back during the election when I continually said people with children in our schools will not be able to sit at the table. And the others — who don’t have kids in the schools — clearly see some benefit to their own absence. They can be the man behind the curtain.

    And I apologize for my tone. The bottom line is — what we expect is much loftier than the job description offers. But in truth, very few people want this job, and it’s catch 22 — if you are crazy enough to want it, one has to wonder whether you are wise enough to do it. Or cocky enough to think you can keep it all secret and still come up with the right answers. THAT is my problem with this group. Too much executive session — too little tolerance for scrutiny or debate.


  6. One thing that would serve the taxpayers well is a complete presentation of the facts.

    Perhaps the PSEA analysis would be better received if it noted that compensation increases have been far in excess of inflation and allowable tax increases. In T/E, the average teacher who was with the district for the whole four years of the now expiring contract saw a 40% salary increase.

    TE’s average salary will not have increased that much, since some retiring teachers have been replaced at lower cost. However, we know that average tenure has been increasing every year, so my guess is that the overall average has increased 30%.

    [Since Pattye just revisited the Radnor contract, let’s also remember that TE’s compensation cost at the contracted 2011/12 salaries is 4% higher than it would be if the Radnor 2011/12 (and 2012/13, also) salaries were applied to the TE matrix.]

    The main thrust of the PSEA analysis points at revenue shortfalls – implying that the solution is tax increases. In today’s climate, how would taxpayers rate that option versus elementary school music programs, EDR reductions, continued compensation increases, optimizing teacher workloads, etc.?

    One point to remember is that all districts are faced with this issue to a greater or lesser extent. Only if TE allows its costs to increase at rates higher than its competitors’ will we suffer.

    Also, worth mentioning, high TE house prices are often ascribed to the quality of the school district. Certainly, those that value education will pay more/accept less house for a better school district. However, if tax policies drive out those without school age children, then the percentage of families will increase. At $5,000 or so in median tax revenue, a per student cost of triple that amount, and, say, two children per household, that’s not a good scenario.


    TE Teacher Reply:

    Not that I don’t believe you Ray, but where does the 40% average salary increase number come from?


    Ray Clarke Reply:

    I took the straight average of all the increases from level (n)/column(m) on the 2007/8 matrix to level (n+4)/column(m) on the 2011/12 matrix. So there’s no effect of any changes in certification or degree which would add to the increase, nor is there any adjustment for distribution on the matrix. For example, as staff arrive at the top step, the salary increase is limited to the matrix increase, so the actual weighting towards the top step will reduce the average increase. On the other hand, those at middle of the matrix will have seen increases above 50% over the period.


    Township Reader Reply:

    Thanks for this Ray. As I said elsewhere, Act 1 was designed to do this — to cut off the constant revenue stream from an unlimited ability to increase taxes.

    But I don’t agree about tax policies driving people out. You won’t allow me to compare our tax rates to other districts because of our industry mix, but the reality is, you leave here to go elsewhere, you have to buy something….and your taxes won’t be lower unless you buy a much cheaper house. And we don’t have an EIT so the overall tax burden “for your equity investment” is favorable here.


  7. Does anyone know the board’s newly hired “negotiations” attorney fee schedule? Looks like the West Chester Area School District hired the same attorney.

    If in past contract negotiations, a committee of board members were nearby for negotiations, as stated by another blogger, who was actually representing the board at the table doing the “back and forth” communications? I believe hiring this “professional” negotiations attorney is a first for T/E—Doesn’t the district already have an attorney on-hand? Couldn’t that attorney represent the board in negotiations?


    John Reply:

    Don’t know his fees but he is well traveled. And involved in a good number of teacher strikes throughout the region the the past decade. His M.O is the same.

    1. Convey a list of extreme demands
    2. Hire public relations firm
    3. Exaggerate the negative aspects of teacher proposals
    4. Reject any mediators or fact-finders reports

    In West Chester’s negotiations back in 2003 he was paid roughly at a rate of $170/hour.

    Some think that is perfect strategy for negotiations. I personally find it hostile and a strategy that leads to bitterness and ill will between the parties. But if you don’t have to suffer those consequences then no skin off your back. It can be a very effective albeit very short-sighted approach to negotiations.


    township reader Reply:

    The district has never employed this strategy before, and the past two years have been complaining about high tax rates and the stupidity of the last contract.

    In fact — there is no negotiating to be done. Status quo is what it is. What proposals could anyone reasonably deal with if we are truly out of revenue sources?

    We all talk on this site about the approach and why board members aren’t there — but what do we expect with 20/20 hindsight?


    Keith Knauss Reply:


    Please realize that whenever a local union employs a PSEA UNISERV representative the MO is the same.

    1. Convey a list of extreme demands
    2. Use the media, parents and students to publicize and support your position
    3. Exaggerate the negative aspects of the Board’s proposals
    4. Reject any mediators or fact-finders reports

    Let’s realize this is a negotiations “dance” that has had multiple performances nationwide. Neither side is blameless.


  8. Township Reader
    You are an advocate of reducing the salary levels of of teachers that have their PHD. So I assume that you also are an advocate that the Superintendent (a PHD himself) take a reduction as well???? Does that include all in Administration that have their PHD?? another 4 or 5 folks.
    Please do not start with no increases for these poor folks when they ALL are making more than the top tier teacher with a PHD.


    Township Reader Reply:

    PPD — I am not an advocate for anything but reasonable outcomes. The board has very few options. Status quo is a number they cannot afford.
    I have said before that it’s moot to talk about the Superintendent when you talk about the teachers. The SUuperintendent compensation is a contract, and it is market driven. He has no tenure, and he serves at the pleasure of the board. Teachers do not choose that path by having union jobs.
    Demoting PhDs is an option legally open to the board to control/reduce compensation costs. Is it a good one? I don’t think so — but I also believe they have few others with which to negotiate.
    How do you incentivize the negotiations process to find a new contract when you have nothing to offer? The board has suggested a very low health care plan, and demotion of high compensation individuals. This cannot happen unless the union agrees to it. In other words — it won’t happen. But for the board to “give up their demands” the Union may in fact move some in their direction by saving those PhDs from demotion by backing off on salary demands and stepping up for greater cost-sharing in health insurance.

    The folks in the Admin have not had raises for a few years — and PhDs or not, they are paid in a market-driven economy as well. I can assure you other districts would be more than happy to take some of our admins. Kevin G. said earlier that part of the compensation for Dr. Waters was developed in a retention mode.
    Unlike the superintendent, the PhDs and others in administration that largely came from our classrooms have not given up tenure, so they can return to the classroom and bump teachers out if they chose. So let’s not worry about them, shall we?

    In a negotiation, where one side has all the power, ALL the power, what would you suggest? History has been that the district bought the next contract. This time, they cannot do that.

    TE has traditionally used someone as the chief negotiator. For many years it was the solicitor, but nowadays that job is a full-time job which may be already involved in adversarial modes with unions (grievances, staff issues). Hiring Mr. Sultanik was no different than using the Solicitor except that he is a specialist in negotiations. Mr. Roos is the district solicitor, and in this case, the district has employed a different lawyer to sit at the table.


    Monie Reply:

    **Township Reader

    Are you saying that the district presently has a full-time solicitor who handles grievances and staff issues? Isn’t there a full-time HR administrator? I guess Mr. Sultanik will be negotiating full-time until a new teacher agreement is reached. How much is the taxpayer paying for all these labor relations people?

    I have a teacher friend who signed a contract when hired. Why is this teacher contract different from the superintendent’s contract other than i.e. salary. . . ? Aren’t teacher salaries sort of market driven too?

    Are you sure demoting only a highly paid teacher/s is a legal option? Doesn’t seniority/tenure protect teachers from any arbitrary actions of the school employer unless it’s related to unsatisfactory performance or something criminal?


    Township Reader Reply:

    Wow…sometimes the questions make these debates feel like a waste of time.
    The solicitor works on an hourly, billed basis. The district does not have a lawyer on staff. He works for many, many districts. The negotiator has whatever arrangement the district has with him. I presume it’s hourly, but I have no information.

    Others have commented here, especially with background in the legal issues, that teacher demotions have been done elsewhere. I am again saying that these are negotiating issues. Today’s Main Line Life letter simply promotes the propaganda of the evil board and the innocent teachers. This is all rhetoric. Every bit of it.

    This is a contract negotiation. Unless you are sitting at the table, we can speculate all we want. What happens, happens.

    There is a full-time HR admin. She sits at the negotiating table this time around. If you want to know the costs, go ask.

    As to teachers salaries being market driven, I guess you would say that a right to strike without any loss in wages to get contracts settled is “market driven.” and the right to “status quo” without any change to the contract is a level playing field? I said before — I’ll say it again. There is no tangiblle incentive to settling a contract on the part of the teachers — and the district has “bought” every contract in my memory. Because of the cost of PSERS and the Act 1 limits, this time the district has nothing more to offer but various ways to cut costs. We’ll see which outcome the TEEA chooses. If TE Teacher is right, this will all be fine.

    And for the record — I am not demoting anyone. Right now, neither is TESD. But one of their points of leverage is the ability to do so.

    Keith Knauss Reply:

    School districts use their solicitor only when needed and pay an hourly rate. Solicitors are not full time employees and may represent several districts.
    Mr. Sultanik has a specialty in teacher negotiations and represents several districts. I’m aware that he currently represents West Chester and TE.
    Superintendent contracts, by law, are quite different than teacher contracts. Note that the superintendent’s contract is 13 pages; the union contract is 60.
    The topic of demotions has been covered in detail elsewhere on this site. Suffice it to say that seniority/tenure plays no part in demotions.

    flyersfan Reply:

    ttr it is a quandry for me that the state would put limits on revenue increases and allow districts to wallow in expense cuts. It seems that from this perspective the teachers too are in some what of a bind in that their “bosses”.. the board representing the taxpayers have no more money with which to negotiate.

    Am i seeing this right?

  9. Let’s be honest here – do elementary school math teachers need advanced degrees to teach their subjects, or is the degree just the salary carrot? I think we know the answer to that. What’s transparent here is that the teacher’s unions are the ones driving the car off the cliff. Public teachers out earn private teachers every day of the week and they’re also afforded the benefit of never having to worry about job security. Get into the real world.


  10. with all due respect to Dr Waters, do we need to pay him as much with all the obnoxious perks? I understand the value of good leadership but unlike private schools, he does not have to go out to high fallottin events and recruit money donors and high “value” students.


    township reader Reply:

    Moot point. The board has chosen how much to compensate Dr. Waters. On his own, Dr. Waters stepped up to a wage freeze almost 5 years ago I believe. And his peers in PA are in demand. I think Kevin told us earlier — there was always concern Dr. Waters would be lured away. Now that the economy has tanked, I’m not sure it’s up to him to give back, though if that was what it took, I can almost imagine he would. But again — his compensation was decided by the people we elect.


  11. Bottom line – this retired couple has to move because of the annual rise in school taxes. We can no longer afford to live here and enjoy any quality of life.


    township reader Reply:

    I have recently shopped for homes in North and South Carolina in a “downsizing” move. Property taxes there routinely are calculated at 1.5 – 3% of purchase price.

    The hard part here is that we have lived one way and the costs have increased. Many of us live in houses we could no longer afford to purchase, which is why we cannot afford the taxes. I totally relate. I indicated earlier — our school tax for next year will be 1.073 of market value IF your assessment is correct. (The right to an assessment appeal would be in play if your assessment times 1.79 was higher than your true market value). But if you haven’t had raises to cover that “inflation” in the price of houses, you cannot afford the taxes on your house.

    So the bottom line is income — which is why we are all hoping (at the mercy of) the teachers being willing to modify their income expectations. Raises every single year of their working lives — and accruing 2.5% towards a pension, and having little health care responsibility is just no longer something we can afford. The reference to pensions is obvious –since the “average” teacher can expect to earn a $75,000 pension –equivalent to saving almost $2,000,000. For those of us without pensions, that is hard to contemplate.

    The cost of pension contributions for the next several years is staggering — and the district simply cannot afford to put money any place else that ends up as compensation.


  12. I’d like to add another reason to the PSER’s top 5 points on why the school districts are facing funding problems – 10 years ago the teachers pension plan benefits were increased , in part because everyone assumed the stock market returns of the 90’s would continue forever!

    Specifically the teachers pension benefit was calculated as : avg of top 3 yrs salary x 1.5% x years of service. That 1.5% factor was changed around 10 years ago to 2.5%. Doesn’t sound like much but do the math. A teacher making $90,000 at the end of a 30 yr career will see their annual pension go from $40,500 a year for life to $67,500 a year for life – a 67% increase!! Did the teachers contributions go up 66%?

    And the increase was made retroactive for any teacher retiring, even if they were retiring a year after the change was made!! And remember , teachers can begin collecting this pension in their 50’s!!

    PSER’s woud like to distort the facts and deflect the blame but the fact is the teachers unions and out legislatures made a sweetheart deal 10 years ago and it is now falling onto the laps of the taxpayer.
    PSER’s – have the guts to admit that this is part of the problem and maybe you’d get a little more respect from the general public.


    Kevin grewell Reply:

    Bingo! I have made the same point many times on this blog.


    township reader Reply:

    TwspDad and Kevin

    This point has been made repeatedly. Knowing this doesn’t help the situation. Warren Kampf had a townhall meeting on the topic — fair turnout but certainly not overwhelming considering the importance.

    The facts are what they are — we can push the state to do something, but it has no bearing on this contract or our operations. (The multipler went from 2.0 to 2.5%). Legal minds believe the state constitution does not allow any changes retroactively, but for the same reason people are buying into the teacher complaints relating to demotion, the public just wants to be comfortable. Fixing this will be hard — wait until you start to get the mailers attacking Warren Kampf for daring to take this on.

    So there are not guts required here. Pensions are controlled at the state level. We can lament them, but we cannot alter out obligations nor our right to raise revenue to fund them. PSERS is one of the approved options for increasing taxes beyond the Act 1 limit,…but isn’t part of the problem as someone states above — no one can afford tax increases going on forever.


  13. Just read that the Haverford School District’s solution to their $1.3 million gap in the 2012-13 budget will be to take it from their fund balance — the interesting point is that unlike TESD, Haverford School District only has $2.6 million in their fund balance, If my math is correct, the Haverford School Board will deplete their fund balance by 50% to make up the budget deficit for next year. And many millions is in TESD fund balance ?? Very different approach between these 2 districts!


  14. Use of the reserve fund always comes up when there is a budget gap to fill and difficult cuts are contemplated. Is it better to use the reserve fund to balance the budget rather than make difficult personnel cuts to balance the budget?
    In Tredyffrin Easttown labor negotiations the union poses a series of questions to show their support for using the reserve fund.
    “The reserve fund is 26% of revenue. Other local school districts have fund balances of 8% to 10%. The Pennsylvania School Boards Association recommends a balance no greater than 5%. What should our priority be? Protecting a small portion of the fund balance or preserving our award-winning program and teachers?”
    Yet, the Pennsylvania School Board Association (PSBA) issues this advice on the reserve fund.
    “Use [of the reserve fund] should be limited to one-time expenditures such as capital equipment, vehicle replacement or any other nonrecurring expenses.”
    A Google search using the key words of “reserve fund” and “recurring” brings up the following.
    “Reserve funds are designed for schools and departments to use for unique, one-time, non-recurring expenses or to defray the cost of unanticipated events.”
    “You can’t or should not use reserve funds for recurring expenses such as teacher’s salaries.”
    “This policy also states that reserve funds shall only be used for one-time expenditures, as opposed to recurring expenses.”
    “It is not fiscally sound to use reserve funds, which is one-time funding, to pay for recurring expenses.”

    The reason? Use of the reserve fund for recurring expenses is just a form of procrastination.


    Township Reader Reply:

    Thanks Keith.
    Do we need to go back and see how the “stimulus” money was used for regular expenses throughout the country — and how it has generated deep, deep budget issues. Even the state budget issues can be traced to the inappropriate use of stimulus funds to pay recurring expenses.


  15. I would rather procrastinate with using a small amount of reserve money than decimate our teaching staff.

    I would rather use a small amount of reserve fund money than lay off our most experienced teachers.

    I would rather use the taxpayer’s money: THE RESERVE FUND, than ask our non-profits to chip in.

    I would rather use some of the reserve fund than cavalierly dismiss employees who have worked for the District for many, many years.

    I would rather do what Haverford School District is doing or what our School District has done in the past, which is to use some of the Reserve Fund, some tax increases, and some employee give backs, than make a rash ridiculous decision that is really about destroying the teacher’s union than about great fiscal principles.

    The same five people on this blog hash over the same tired arguments over and over again.

    Would love to hear from more people. But I guess they are reluctant to contribute because they just don’t have the same level of experience/knowledge/brilliance as you.

    The problem with many of the postings on this blog is the groupthink that persists. It would be interesting to have a real debate with real analysis.

    The District has done a heckuva job (great job Sultanik PR firm) convincing most of the public that they don’t have a nickel in the bank. If we had a real newspaper asking real questions; if we had more community members come out and ask more questions; the truth would come out.

    It is an absolutely unbelievable that a District with 32 million in the bank has convinced the public that we are Chester Upland. Since when? It is demeaning to this community that the powers that be have made TE out to be broke and near bankruptcy. Since when?

    The board has done a good job cutting expenses, and the teachers need to pay more for health care; but we should NOT destroy this school district because we have a few people who want to take an ideological stand on not using the fund balance.

    I don’t want my property values to plummet because TE schools go down the tubes as we cut, cut, cut, cut, cut, cut.

    I watched the school board meeting on tv and saw the woman at the end who revealed that it is not that the school district CAN’T use the fund balance; they have CHOSEN not to use the fund balance by passing a policy to put it in a lock box.

    UNLOCK THE BOX! Stop this nonsense! Stop attacking the teachers! Work with the teachers!

    I agree with Pattye. I elected YOU school board members, to represent me. DO YOUR JOB! Get to the table. Settle this contract. Stop making the teachers the enemy.


    Township Reader Reply:

    Blue Dog
    “Settle this contract”
    I’m sorry that I have more background than you, and I don’t mean to cut off debate. It’s just so easy to say, and so hard to do. Settling this contract has nothing to do with the fund balance, except that possibly the only thing the board has to negotiate with is the threat of demotion.
    The teachers can take that off the table today by offering some givebacks or proposing a new health care plan. THe numbers are in the agenda for Monday night — $640,000 for demotion strategy. TEEA can offer that in one move. That’s how you negotiate. This time, the district cannot say “here’s a million dollars — what will you do for it.” They are saying “here’s how we can save $1M. What can you offer as the alternative?”


  16. “ttr it is a quandry for me that the state would put limits on revenue increases and allow districts to wallow in expense cuts. ..the board representing the taxpayers have no more money with which to negotiate.

    Am i seeing this right?”

    FF — yes, to a certain extent. It was clearly the intent of legislators to control the local propensity to raise taxes as they saw fit. Act 1 and other limits like it were in response to groups like Senior Citizens who complained about property taxes driving them from their homes.

    Kevin G. can go into much more detail about the intent, as he was doing Legislative review stuff for the board during much of this. But the fact is — even if you read the comments made by board members who ran the last time, they kept saying PSERS was the problem and the state had to fix it.
    PSERS is a problem, and it has been projected to be so for a very long time. There was never a reason to raise and lower the PSERS accruals on this board, and yet they did. WHen they did the last contract, they knew the PSERS hit was coming. I believe many districts — not just TESD — arrogantly attempted to stare down the state with the assumption that Pennsylvania would not let districts do what they are now being forced to do.

    So — how does the state fix it? Presumably, they can raise your income tax at the state level and fund it that way — OR TESD can start to deal with the topic publiclly, and do what the legislation intended — get the voters’ consent to increase taxes. Not an easy task no doubt — but considering the way the last election went with a sniff of any kind of tax issues, no one wants to face that mess. It’s too easy to say it would never pass.

    SO — at some point (now?), belts are being tightened. And yes — the district has no money to buy this next contract. Because that is what negotiating with the PSEA is — how much will it cost us to get a new contract? If we pay you this much more, will you do X or contribute Y to health care? No more to pay — and unless the teachers come to the table with contributions to the district, status quo will force the demotion strategy into effect.


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