Saturday, June 30, 2007

Teacher Salaries: A Primer

For the past couple of years, the focus of attention in our community has been getting the levy passed for the construction of the third high school. We can all grasp that this is a commitment of tens of millions of our tax dollars. The final cost of construction for Bradley High School is still a developing number, by the way. It will be interesting to see how close it comes to the estimates given us when the bond levy was passed.

The collective bargaining agreement of the union representing Hilliard Teachers, known as the Hilliard Education Association, will expire December 31, 2007. The impact of this will be much greater than the construction cost of the high school. While the final price tag on the school might end up being $40 million or more, this is a one time cost. But we pay our team every year.

According to the Five Year Forecast submitted by Treasurer Brian Wilson to the Ohio Department of Education, in 2006 we paid $85.7 million in salaries and $28.5 million of retirement and insurance benefits, for a total of $114.2 million. Total expenditures for the district was $131.7 million, meaning that salaries and benefits represent 87% of all expenditures.

The teacher's contract includes a built-in 4.15% across the board annual salary increase. So for starters, this means the $85.7 million goes up $3.6 million, to $89.3 million if nothing else changes in the new contract.

The Westerville teachers' union just signed a new agreement with their school system. A key provision is a 2.65% increase of the scale for each of the next two years. Note that this is different than saying teachers are getting a 2.65% increase, and for once The Columbus Dispatch was sharp enough to pick up on this angle. Here's what it really means:

Let take the example of a teacher with a Masters degree and ten years of service. According to today's contract, that teacher would have a base salary of $59,050. If nothing changes in the contract whatsoever, next year that same teacher is now one with a Masters degree and eleven years of service. Simply because of that one year's additional service, this teacher's new salary will be $61,500 -- the 4.15% annual increase built into the contract.

However, if the entire pay scale is also bumped 2.65%, as was won by the Westerville teachers, the salary for a teacher with a Masters and 11 years would be $63,130, for a total increase of 6.9%.

The Westerville agreement calls for the scale to be bumped another 2.65% the following year. Without this second increase, our example teacher, who would now have 12 years of service, would be paid $65,750 (it would have been $64,053 under the current contract). However, with the second bump to the pay scale, this teacher would get paid $67,493. Over these two years, the teacher's salary would have increased from $59,050 to $67,493, which is the same thing as a 6.9% annual increase (you are invited to check the math).

Okay, so in 2006 we paid $85.7 million in salaries (let's ignore benefits for the moment). Given the built-in 4.15% increase in the payscale, the salaries for 2007 should be about $$89.3 million. If our teachers negotiate the same deal as the Westerville teachers, the 2008 salaries will increase by both the 4% years-of-service step and the 2.65% across-the-board increase of the payscale. Collectively, those two increases will add $6.2 million to total salaries, to $94.5 million.

The following year, both increases would happen again. The effect would be to add another $6.6 million to total salaries, to $102 million.

So, without adding a single teacher, the annual salary cost would increase from $85.7 million to $102 million, a change of $16.3 million, or 19%. On top of that would be added the increase in benefits costs, which includes the school district's share of the teacher's retirement contribution, currently 14% of base salaries, adding an estimated $2 million to the current expense.

This means that the additional money spent on salaries in 2008 and 2009 could be on the order of $35 million, or about the same as the projected cost of the new high school.

The point here is not to say that our teachers are overpaid. It takes a special person to walk into a classroom every day and face a couple dozen kids who are expecting something meaningful from you. I couldn't do it. Blessings on those who can.

Yet, somehow we've gotten into this mode around here where this kind of financial information is placed behind a fog of obscurity -- and I think it's on purpose. I bet the Westerville teachers told the public they were asking for a 2.65% increase for the next two years, and the Board concurred. Most would say, "gee, that's pretty small - what a good deal for the community!"

But we have to dig past these kinds of numbers to the truth. In this case, we need to remember that whatever percentage the overall payscale is lifted, there is also a built-in annual increase associated with the length of service step-up. The teacher's request might not seem so small to folks once it is realized that two are combined. In this example, it's really a 6.9% increase.

Lest we forget, none of this takes into account the cost of opening Washington Elementary and Bradley High School. Add another chunk for that. The aforementioned Five Year Forecast estimates that overall salaries and benefits will increase $14 million in one year, from 2009 to 2010, the year Bradley opens.

By 2o11, salaries and benefits are projected to total $163 million, a whopping $50 million per year more than now. That's over $600 additional per year for every man, woman and child in the District.

Why doesn't our Board, or the Citizen's Finance Committee talk to us about this?


  1. You have made some important discoveries about the cost of public education, and what is driving it...staff compensation. The fact that teaching is no longer a low-paying occupation will come a a shock to many or most people, but the spiralling cost of staff compensation is at the root of Ohio's school funding crisis.

    To date, the media has done a very poor job of reporting on this topic, so the old notion of the "underpaid teacher" is still common.

    The truth of the matter is not an easy thing to discover, and may be even harder to articulate, but nothing less will help Ohio solve its school funding crisis.

    Thanks for taking the time to learn the truth, and for honestly stating it. Keep up the good work.

  2. It's simply amazing how the media spreads disinformation of what a total raise is for members of the OEA.

    The unfortunate truth of this situation is while union educators receive raises well about the average 3% that the regular taxpayer receives, the taxpayers of the school district either go without the most basic needed items at home only for their childern's teachers swear up and down how they simply are so poor that the entire class must pitch in for supplies the school district needs to provide.

    Instead of the unions bargaining behind closed doors (w/what is typically individuals they make sure are elected)this is another prime example of what needs to take place in public meetings.

    It's sad that the taxpayers of school districts across Ohio are expected to continue to give the union educators more money, while they go without.

  3. "NG" - I removed your comment because you identified yourself as a student, and I'm not comfortable with publishing a student's name in the clear.