A Primer on Teacher Contracts
Teachers pump up pressure on district
Arbitrator for faculty contracts to meet with teachers and district officials on
Oct. 1
By ERIC FRY / Juneau Empire
Originally posted September
20, 2003
 |
The right to strike or to compel mandatory arbitration for total compensation increases in excess of the rate of inflation on salaries exceeding the national average by more than 1%, adjusted for local living costs, must be terminated for all government workers, including educators. If public employers and school boards want to offer more, it’s their choice. Moreover, increases in compensation should not be stated in terms of fixed percentages, but in terms of annualized inflation rates. In all cases, increases in compensation above the rate of inflation must be earned, not given away. |
See,
also, Part
2 — A Primer on Teacher Contracts and Part
Three.
Juneau’s teachers, working without a contract so far this school year, are
stepping up public pressure on the school district.
Nonbinding arbitration is scheduled for Oct. 1 to resolve the contract dispute.
The teachers’ two-year contract ended June 30. Teachers make from $33,591 to
$64,694 a year.
Please
take note, S-G. The cost
of living in Alaska is 28.2% above the national average compared to NY’s
19.6%, which is inflated because of NYC. Schenectady’s cost of living is about
10% above the national average due exclusively to high taxes which are primarily
driven by the high salaries and benefits of government employees, including
teachers.
S-G teachers earn between $34,000 and $70,194 per year, excluding add-ons,
and pay about 11% of the cost of their health insurance. They contribute about
$11,500 toward pensions that will pay in excess of $1.3 million to each teacher
(excluding future state-mandated annual cost of living pension increases) free
of state income tax, assuming a 30-year career and 30-year retirement.
If both parties don’t accept the arbitrator’s decision, the district and the
teachers are obligated to meet at least once to resolve the dispute. If they
can’t reach an agreement, the district is entitled to impose its last, best
offer, and the teachers can strike.
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Teachers, in their final offer during negotiations in May, asked for 2 percent
increases in the salary schedule’s rates, an increase in the district’s
contribution toward health-insurance premiums from $550 a month per person to
$635, and an increase in elementary teachers’ preparation time from at least 150
minutes a week to 250 minutes.
Here’s
a school board that’s done something right. Rather than pay a percentage of the
health insurance costs, it contributes a flat sum. If the cost of health
insurance goes up, the teachers pay it.
Notice the teachers want a 15% increase in the district’s health insurance
contributions. That’s about what teachers have been getting in places, like NY,
where districts pay a percentage of health insurance costs rather than a fixed
amount.
Notice, too, how much a seemingly small amount–an $85 per month
increase–really costs the district. There are 350 teachers, librarians and
counselors covered by the contract. $85 per month x 350 teachers x 12 months
costs $357,000. Small numbers add up to large expenditures.
Notice, too, that $85 per month is $1,020 more per year. (Health insurance is
paid over 12 months). For the highest paid teacher ($64,964 + $6,600 for health
insurance) that amounts to a 1.4% increase in compensation which is equivalent
to last year’s rate of inflation. For the lowest paid teacher ($33,591 + $6,600
for health insurance) it amounts to a 2.5% increase in compensation.
Yet, Juneau teachers (and teachers everywhere) want a 2% increase in salary on
top of a 15% increase in contributions toward health insurance. That would give
teachers a compensation increase of between 3.4% and 4.5%, excluding step
increases, with inflation running under 2%. It would also cost the school
district another $343,000.
So, just to keep doing what they are already doing, Juneau teachers want to take
$700,000 more per year out of the local economy, excluding the cost of step
increases in salary, and distribute it to themselves. The same scenario is
played out in S-G, only with larger increases for fewer teachers.
By the way, please notice that the compensation of Juneau teachers is not
$33,591 to $64,694 a year but $40,191 to $71,294, including health insurance but
excluding pension benefits.
Two last points. Notice the decline in productivity the teachers want. An
increase in elementary preparation time to 250 minutes per week from the current
150. In other words, teachers want to spend 5% less time in the classroom and
earn 3.4% to 4.5% higher salaries!
Final point. Health insurance is frequently paid by employers because of
incentives created by the tax laws. Teachers, and too often school boards, too,
see health insurance as a non-pecuniary, in-kind benefit. They believe the right
is to a defined benefit rather than the money needed to purchase the benefit.
What employers and employees have agreed to do in their mutual self interests is
to have employees accept part of their salaries in the form of health insurance.
Employers could, for example, include the $6,600 Juneau pays for its teachers’
health insurance, directly in the paychecks of employees. But, the employees
would have to pay tax on it plus purchase their own health insurance at far
higher costs. By accepting health insurance rather than cash, employees
effectively increase the value of their salaries.
Health insurance is salary paid in-kind. What the Juneau teachers want is
a 2% increase on part of their salaries ($33,591 to $64,694 a year) and a 15%
increase on the other part of their salaries ($6,600 a year). It’s clearly
absurd.
When school boards discuss pay increases for teachers they should talk about
only one percentage–the total percentage increase based on the total
compensation package. That percentage increase should not exceed the rate of
inflation without getting something of equivalent value from the teachers. After
the school and the teachers agree on the percentage increase, then the teachers
can decide how to divvy up the increase between salary and health insurance.
Teachers now pay the equivalent of $243 a month toward health-insurance premiums
of $793, said Anderson of NEA-Alaska.
Here
we learn that Juneau teachers are paying 31% of the $9,516 cost of their health
insurance. S-G residents take note. Not only do Juneau teachers earn less in a
state with higher living costs than Schenectady County’s, they contribute about
$156 more per month toward health insurance than S-G’s teachers.
The district has said it’s willing to pay $85 more a month for the premiums.
The School Board also recently authorized teachers to move up what are called
the steps and columns of the salary schedule this school year, even without a
new contract. The previous contract, negotiated in 2001, was intended to free up
money to allow for movement up the schedule without it being negotiated with
each contract.
How
about that, whether or not teachers moved up on steps was previously a matter of
contract negotiations. In S-G, it’s automatic.
The schedule pays eligible teachers more money for added years of experience and
further college credits. Union officials said this spring that about 30 percent
of teachers have reached the top point of the schedule. Those teachers would
make more money only if the salary schedule’s pay rates are raised, or if new
steps are added to top end of the schedule.
S-G
did both in its last contract. But wait! The Juneau board has agreed to pay $85
more per month toward health insurance. As pointed out earlier, that’s a minimum
1.4% increase in compensation. The highest paid teachers would take home $85
more a month than they do now.
But notice how the union outright lies about it. It says, "[Teachers at the
top of the pay scale] would make more money only if the salary schedule’s pay
rates are raised, or if new steps are added to top end of the schedule."
It’s simply an utter falsehood, as demonstrated, above. However, teachers unions
universally lie about teacher compensation.
"They haven’t offered anything except step and column," teacher
negotiator Sara Hannan said Tuesday of movement up the schedule. "Our step
and column funds itself."
This
is another lie teachers tell. How does an enterprise that earns no income and no
profits fund its own step increases? It can’t, but I’ll tell you the fairy tale
used to back up that statement.
As teachers retire, new teachers are hired at lower costs and rather than
rebating the savings to the public or using the money for textbooks, technology,
new programs, maintenance, supplies or other needs or improvements, teachers
hang onto the money to "fund" their step increases. It works like
this: A teacher retires from a $65,000 job and a new teacher is hired at
$35,000. The $30,000 in savings is used to pay the cost of bumping several
teachers up a step on the pay scale. On average, in Juneau, enough teachers
retire each year to cover the cost of moving teachers up a step. Thus the
fiction of a perpetual motion machine that uses no energy–the self-funding step
increase.
What the teachers have done is said that any money currently being paid to
teachers belongs to the teachers both now and in the future. It cannot be used
for other purposes. As teachers retire, the money they earned goes back into the
teacher salary pot to increase the salaries of the remaining teachers.
The concept of self-funded steps implicitly includes the concept that total
teacher pay should remain unchanged as average experience decreases. When
senior teachers retire, new teachers are hired, thus lowering average
experience. Yet, the total salary paid to teachers remains the same despite
lower average experience. It’s a pretty neat trick that would bankrupt most
businesses.
Of course the theory of self-funded steps is a lot better on paper than in
practice because of the rule "All funds currently paid to teachers
belong to the teachers, both now and in the future."
What happens when more teachers retire than are needed to fund step increases,
like is happening now? Teachers expect that money to be used to sweeten cost of
living increases.
Most people expect salaries to increase at the rate of inflation. So teachers
ask for an increase at the rate of inflation, plus some extra based on the
"savings" from retiring teachers in excess of the amount needed to
fund the step increases, arguing that it costs the district "nothing"
because the money was already being paid to teachers.
But what happens in years when fewer teachers retire than needed to fund step
increases? Well, everybody still expects salaries to go up at the rate of
inflation. So teachers ask for, and generally get, a salary increase of at least
the rate of inflation. But now, there’s not enough to fund the step increase, so
the district has to increase taxes some more to fund some of the cost of the
step increases, too.
Here’s the fallacy of the whole set of assumptions. There is not teachers’ money
and other money. There is just money and needs. The money should be distributed
in a way that optimizes the meeting of the needs. The teachers unions, and the
school boards that play along, say teacher needs come first. Teachers do not
have to compete with the remaining needs of the district or students.
The consequence of all this is school spending increases that run two to three
times the rate of inflation. Salaries go up at the rate of inflation. So do
other costs, except energy and health insurance, which exceed the rate of
inflation. Teachers and school boards pretend that the funding of health
insurance is not a pecuniary part of teacher compensation but an in-kind
benefit, so this disproportionately increases costs. Schools have been reducing
teacher productivity (reducing class sizes) plus adding technology. Security,
counseling services, after school programs and sports programs have all been
expanded or converted from volunteers to paid staff. School boards also find
themselves maintaining older buildings at greater costs. Consequently, spending
on K-12 education has dramatically outpaced inflation. Under circumstances such
as these, the fictional concepts of self-funded steps and health insurance as
a non-pecuniary benefit have to end. Schools need to be applying the
"savings" from retiring teachers to needs other than just increasing
the compensation of teachers.
| The United States spent 7 percent of its gross domestic product — the country’s total output of goods and services — on education in 2000. |
The school district’s new one-year contracts with administrators - such as
principals - and support staff - such as custodians and instructional assistants
- included movement up the salary schedule and $85 more a month toward
health-insurance premiums.
A
step with a 15% increase in district contributions toward health insurance.
That’s unarguably generous.
Cowan said the district is interested in equity among the collective bargaining
units, and has budgeted for higher district payments for health-insurance
premiums for the teachers.
Kevin Hamrick, a teachers union negotiator, addressed the School Board on
Tuesday, saying he was speaking as a parent and community member. He said there
are ways to save money without cutting teachers and services. He cited the money
the district is spending on a consultant during teacher negotiations.
Just
because money can be saved does not mean it ought to go to the teachers first.
There are other needs.
Increases in compensation in excess of the rate of inflation must be earned,
not given away. Schools boards owe it to the public to get something in
exchange for increasing teacher compensation beyond the rate of inflation.
"Every time we talk about budget cuts, it’s how many teachers are we going
to cut," Hamrick said.
It’s
a consequence of the cost structure teachers and arbitrators have imposed on
school districts. Teachers always have the option of saying, "You
know, we’ve been getting compensation increases well in excess of the rate of
inflation. How about we skip the step increase or the cost of living increase
this year to save some teacher jobs? We’ll do it for the students."
In
other places, even high-school-degreed janitors have been willing to give up
raises to save jobs. It makes for easier work and cleaner schools. If our highly
educated and far better paid teachers had the same sense as our janitors, it
would make for easier teaching and better learning.
The district reduced about $1.74 million from this school year’s budget to
balance it. The district, in a budget document, listed movement up the salary
schedule and increased health-insurance premiums for all employees as major cost
increases.
HEY!
I thought movement up the salary schedule was "self-funded"!
Among the cuts were the equivalent of about six teaching positions, early
afternoon kindergarten buses, after-school activity buses, and delays in buying
textbooks.