Pattye Benson

Community Matters

Important Tredyffrin-Easttown School District Meetings . . . Includes Earned Income Tax (EIT) Discussion

For many residents, the upcoming election on November 2nd has captured your attention but there is interesting news from the T/E School Board that should not be missed. A couple of important School Board meetings — tomorrow’s Finance Committee Meeting at 7:30 PM at the high school and the following Monday, October 18, an EIT Information session.

Topics included on the agenda for the Finance Committee Meeting:

  • Projection Model
  • Capital Sources and Uses
  • 2011-2012 Budget Calendar
  • Earned Income Tax
  • Print Shop and Printing Costs
  • Fund Balance Designation – information about the $6M accrual for untaken sick/vacation entitlement

The Finance Committee will be setting the stage for the following week’s special presentation on the EIT.

I applaud those School Board members responsible for the October 18th public Earned Income Tax presentation. The School Board is bringing in a third-party, a representative from the Pennsylvania Economy League to provide information about the implementation and effect of an EIT.

This is an important meeting because the School Board will make a decision at its October 25th meeting about whether to advise the Townships of its intent to place an EIT on next May’s ballot as a voter referendum. This notice is non-binding, and would allow the Board, the Townships and community time to fully consider the matter.

We understand that the School Board represents us, the residents. If you do not want the School Board members to make decisions in a vacuum, than I think more of the community needs to be engaged. There are hard decisions facing the school district in the 2011-12 school year. How do you want the Board to fund the ever-increasing deficit and the ballooning pension situation . . . increase your property taxes, cut educational programs in the district, impose an EIT? Leaving the situation as a ‘status quo’ is not an option. I am 100% supportive of exploring all options and democratically deciding on the best option. Before anyone jumps in and says no one wants an EIT — and that previously the public was overwhelmingly opposed to it, we need to recognize that our options are becoming increasingly more limited. Would you prefer a large property tax increase? If you take an EIT and property tax increase off the table, . . . what’s left? Educational program and staffing cuts? Is this the answer?

We may be seeing the tip of the iceberg as more and more of the school districts are facing similar economic challenges. Methacton School District is set to go on strike Friday, October 15. Teachers in that Montgomery County school district have been working without a contract for over a year (contract expired June 2009). Although wages is the main issue, other contract differences include medical premiums, the length of the work year, and the payment of postretirement medical benefits. Methacton’s School Board accepted the findings of a nonbinding fact-finder’s report this fall; but the Methacton Education Association, the teachers union, rejected it.

I think that the TESD teachers contract is up in 2012. (Please correct me if I’m wrong). It is going to be interesting to see if the teacher contract negotiations of Lower Merion, Radnor and Great Valley will influence our district. The current TESD teachers contract allows for a 5% yearly increase in wages, correct? With several School Board members terms up in 2011, it is going to be interesting to see who will decide to stay and seek re-election. With teacher contract negotiations and the pension situation, could be a challenging 2012 for School Board members.

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  1. Thank you, Pattye, for the alert about these meetings. The next couple of weeks will reveal the true character of our School Board.

    You are right – in aggregate – about the current contract, expiring next year, 2011/12. By year from 2008/9, the overall matrix increased 3%, 4% and next year, 6%. However, the individual effect can be much different. Just longevity increases add another 4% or so per year. Therefore, the salary of an employee with the district for the last three years will have increased on average 30% by 2011/12. (I don’t have the matrix for the last year of the previous contract for a 4 year, total contract comparison). Then of course there is the impact of additional certifications, which even the TESD admin can not calculate until they happen, but this year was an unbudgeted expense of $300,000 in total I think.

  2. They can and should anticipate certification expenses because they pay for the education — so they should have a sense of who is about to get what “bump.”
    The salary schedules need the matrix of employees to work through them. Have Radnor or Lower Merion settled yet? Those contracts will be MAJOR influences on the next TESD contract.

  3. TE negotiated raises (matrix + longevity) were/are:

    2009-10 5.1%
    2010-11 5.1%
    2011-12 5.2%

    Add another 1% for educational movement and the average TE teacher received raises of 6.1%, 6.1% and 6.2%.

    1. I’ve seen these numbers before, and mu guess is that they represent the net effect of assumed retirements and new hires at half the salary.

      Let’s look at some actual numbers from the salary matrix for the “average” teacher, who as of this year has 8 years of district experience and a masters plus 15 credits.
      Year Level Salary Increase
      2008/9 6/M+15 $56,740
      2009/10 7/M+15 $59,840 5.5%
      2010/11 8/M+15 $64,240 7.4%
      2011/12 9/M+15 $81,480 26.8%

      Total increase 43.6%. With credits up to 30, the salary in 2011/12 would be $82,480, for a three year increase of 45.4%.

      Now, the 2011/12 increase does not apply to every position on the matrix, but is typical of the middle of the matrix. The straight average increase next year of all positions (scale and moving up one year) is 10.4%.

      So, this is important context for the contract discussions next year. Clearly the last contract salaries outdistanced the incomes of those who actually pay them (not to mention benefits) by a substantial amount.

    2. The only flaw in all the talk is that there is no such thing as an “average” teacher. When your teachers are up the matrix, the “average” raise is on the “average” salary….
      It is very difficult to “fix” the matrix because the PSEA pushes for a 10 step schedule. The TEEA was willing to add steps several schedules ago, but that has been reduced and things have changed because the current leadership appears to be allowing the PSEA to call shots.
      If you want to keep the same number of steps (which is stupid, but it’s what they push for), then you either move the whole matrix up every year, or you try to slow down the starting salary but you still reach for the top step…so the weighted matrix is what determines the total cost.
      If you don’t know where the people are on the matrix, the numbers are kind of confusing — because there may be no one getting some of the “big” raises….

      If step 1 is 50,000 and step 15 is 100,000, then if the next year step 15 goes to $103,000, but you try to hold the starting salary, now you have 15 steps to make up 53,000….this gets compounded over time because the union won’t add steps. In a perfect world, there would be 40 steps (that’s how many years it takes to tenure)…and you would drop step 1 and add step 41 if the cost of living required it…..or you would spend several years on each step. It’s the mindset that creates the complication.

      System is broken….and if you do not remove the right to strike from the equation, you cannot fix it. Because it does come down to what they (union leadership which is NOT the rank and file) are willing to accept vs. what the taxpayers will pay to avoid a strike. That’s the elephant in the room.

  4. Ray,

    I believe you are not taking into account the large number (20% to 40%) of teachers at the “top” (actually bottom) of the matrix that will not receive longevity increases. They only get the matrix increase AND in aggregate they represent the bulk of the dollars paid out in teacher salaries.

    The numbers I quoted were calculated assuming the teachers in place when the contract was negotiated are the same teachers that will be present at the end of the contract. Of course, what we need for an accurate number is a list of where every teacher resides on the matrix now.

    Whether the salary increase averages 5%, 7.5% or 10% your statements is important:
    ” Clearly the last contract salaries outdistanced the incomes of those who actually pay them (not to mention benefits) by a substantial amount.”

      1. The matrix is publicly available on the TESD web site. The data that is not is the distribution of teachers across the matrix. This matters of course in budgeting the near term impact of contracts district wide, but I’m not sure it’s important enough for this discussion to me to execute a RTK request.

        We do know that the total compensation for a “young” teacher corps will more closely follow the straight average impact of the matrix, since few will drop off the matrix. This will be TESD’s situation next year. My data for the “average” teacher (8 years, M+15 to M+30) is a direct report of information I received at the Finance Committee meeting this week. So we know for sure that there are some large increases on tap for 2011/12.

        I’m not convinced that the district’s 2011/12 projection fully accounts for the distribution across the matrix, and so the actual financial gap could be even worse than the official numbers.

        In the next contract it’s surely going to be tough to countenance any salary increases at least for the near term, and thereafter perhaps only if directly linked to CPI.

        1. Sorry Ray — confusion in terms. The negotiated numbers are typically called the “salary schedule” and the “matrix” is where the staff fall on that schedule. An RTK is a simple email to the business manager requesting the information. I have had it several times, but unless you are involved in the negotiations, it’s more frustrating than satisfying to see what is going on. Radnor and LM schedules will have a LOT to do with what happens in TESD….unless something happens that I cannot predict.
          The information you want is specifically referenced in the teacher contract as it has to be produced for the TEEA annually so that they can keep track of where they have people on the schedule as well.

    1. No such thing as a “matrix” increase….each step has a value in each year of the contract….so for the large number of folks on the final step, that step keeps growing…which is why the steps to get to it keep getting larger.

  5. Everyone is ignoring the cost of pensions. I don’t have the data but typically in the public sector, that is the cost that is in runaway status.

    I am going to guess that a 1% EIT will do very little to stem the problem over the long run if indeed pensions are the problem. It can provide a temporay bandaid only. Pension reform should be the answer but no one wants to touch that. It is just easier and much more convenient to tax the citizens.

    Beware the long term consequences of an EIT. There have been several studies completed that showed how an EIT can have the effect of actually decreasing the taxable base over the long run because higher earners stop moving into townships with an EIT and some move out. Eventually, you are left with a shrinking tax base and property taxes explode. Those who favor an EIT like to use the canndard that property taxes will have to be raised unless an EIT is implemented. It is the oldest trick in the book.

    If an EIT is implemented we will be seeing a completely new slate of school board members in short order. There are numerous other solutions but they require hard internal decisions. School boards and administrations would rather outsource that to the taxpayer. The problem is that the taxpayers have begun to revolt.

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