Wednesday, December 9, 2009

Teacher Raises = Levy Size

As Justin, Don and I pointed out during our campaign, 2010 is the year in which the School Board will engage in negotiations with the teachers' union – the Hilliard Education Association (HEA) – as well as with Local #310 of the Ohio Association of Public School Employees (OAPSE), representing the staff of the District. In my opinion, this is the single most significant act undertaken by a school board, and there is only one chance every few years to get it right.

Many of us believe that these negotiations happen in a room with teachers sitting on one side of the table and school board members on the other. Indeed, Article 2, Paragraph B.1 on the very first page of the current agreement between the HEA and the School Board specifies that each side may come to the negotiating sessions with a team of no more than five people – exactly the number of School Board members.

In reality, some of those spots on each side of the table are taken up by others, including professional negotiators. That means that not all five members of the School Board actively participate in the negotiations. I don't personally have a problem with this. Even though this will be the first time I have had any connection with collective bargaining and union employees, I understand enough about negotiating in general to appreciate that having an experienced professional negotiator representing the interests of the School Board is a good thing.

This group of ten people – five on each side – must go into the negotiations with a clear understanding as to the goals of their respective constituents. The negotiators also need to understand how far the constituents might be willing to push a point of contention.

You may recall that during the 2007 negotiation, the last point of contention was the employee contribution to the cost of health insurance premiums. This issue hung up negotiations for months, leading the teachers' union to call for a 'work to the contract' action, and even to authorize a strike. The contract was settled before that happened.

The teachers' union holds a great deal of power in these negotiations, and they know it. Listen to what the chief counsel for the National Education Association (of which HEA is an affiliate) has to say about the power of the teachers' union:

What is the source of that power? The aforementioned authority to strike is one of the keys of course. Not every state grants public school teachers this right, but Ohio does. This power to strike gives the teachers' union a nuclear weapon in a conflict with the School Board, who has no corresponding power. And of course standing in the middle of such a conflict are the innocent victims – the kids who attend our schools.

From a practical standpoint, all the School Board can do is pick at little things at the margin, like the health insurance contributions, while the teachers' union can blow up the whole District with a strike vote.

So if they have so much power, why does the teachers' union ever concede anything to the School Board – like this health insurance thing?

I think it must be because the teachers know a sustained strike is not in their best interest either. For one thing, they don't get paid anything by the School District while they are on strike (ORC 4117.15C). They may receive some strike benefits from their union, but it is unlikely to be the full amount of their normal pay, and their strike fund certainly would have a limited life before being exhausted.

I also believe that the teachers know that a strike would immediately and drastically change their relationship with the people of the community, creating wounds that would take years to heal. Kids would be harmed, from the little special needs pre-school children who would have an interruption in their programming to the high school kids who are getting their academic resumes fleshed out in preparation for college applications. School Boards and teachers unions can think in a timeframe that spans many years, but as a parent, you know your kid is on a once-in-a-lifetime K-12 journey that you definitely don't want messed with. Parents would be unlikely to forget the harm done to their kids by striking teachers. Or by a School Board who lets it get that far out of hand.

And so we end up with a kind of cold war that neither side wants to escalate to a full-blown strike.

Except that's not completely true. There is some number of people in our community who are so tired of paying the ever increasing taxes necessary to fund each successive teachers' union contract that they would support letting the teachers strike if that's what it takes to 'break the power of the union.' I heard from a few such folks during the campaign, although clearly a minority.

So what is the answer? As a community, we need to address this straightforward question: How much are we willing to tax ourselves to fund future pay raises for our school employees?

We have no one to turn to for help with this question – we'll be lucky of the State of Ohio doesn't cut our funding any further than they have already. Every additional dollar our teachers, staff and administrators get paid is going to come out of our own pockets. And not just the pockets of the two-income power couples who are doing fine in this economy – but also the pockets of the households where a job has been lost, bills are piling up, and retirement accounts are being drained.

Part of the problem in developing an answer to this question is that many people in our community don't actually know what teachers are paid. In a community survey taken in September, 30% of the people said that they feel our teachers are underpaid, but 80% of those same people also think the average salary of a Hilliard teacher is on the order of $43,000, when the real average teacher salary is more than $68,000.

Similarly, nearly three-quarters of the people who think that teacher pay is "about right" also believe that the average teacher pay is about $49,000. Only 15% of the people surveyed know (or guessed) that the average teacher salary is actually $68,000/yr.

In other words, about 85% of the public thinks teachers are underpaid or paid about right, but the public's perception of what teachers are paid is around $19,000 lower than the actual average. I wonder what kind of response there might have been had the survey included the question: "If you knew that the average salary for our teachers is $68,000/yr, would you say they are underpaid, overpaid, or paid about right?"

The story is quite different when the question is about the administrators. Only 4% of the community members believe administrators are paid too little, while 42% say they are paid too high. This is a common refrain in our community: "There are way too many administrators and they get paid too much!" It may not help that the public's perception of the average administrator salary is $12,000 less than the actual average of around $87,000.

So that's one problem we need to address – the lack of knowledge the people of our community have about these basic economic facts – the problem I've been trying to get addressed for nearly a decade.

But let's assume that everyone in the community has accurate knowledge about our teacher, staff and administrator pay scales. We still have that same critical question to answer:

How much are we willing to pay in additional property taxes to fund raises for the teachers, staff and administrators?

In his October 2009 Five Year Forecast, Treasurer Brian Wilson built an estimate of future costs based on these assumptions:

  • In 2010, the average base pay increase would be 3%, plus average step increases of 2.3%. Additional staffing at Bradley would add about $1 million to spending, but nearly the same amount of staffing costs would be eliminated elsewhere. A one-time shot of Federal stimulus money would provide $650,000 in funding this year and next.
  • In 2011, there would be no base pay increases, and the average step increase would be 2.3%.
  • In 2012 and 2013, the average base pay increase would be 2%, and the average step increase would be 2.3% and 2.4%, respectively.
So here's the punch line: If these assumptions – and the others in Mr. Wilson's forecast – hold true, I calculate that we will need operating levies on the order of 10 mills in 2011, 2013, and 2015. These will increase our property taxes by $300 per $100,000 of market value in each of those years. In other words, in the span of six years, our property taxes would increase 40%.

And that's if the teachers' union agrees to raises similar to what Mr. Wilson has assumed. If the HEA demands more, and our school board agrees to pay them what they demand, our taxes will go up at an even greater rate.

A serious and respectful dialog needs to take place between the people of the Hilliard Schools community and the employees of our school district if we are to arrive at a balance of taxes and raises that are acceptable to all. It has to happen before the ten negotiators for the school board and the teachers' union sit down to begin formal negotiations. We can't wait until a new union contract gets signed, then try to get an operating levy passed to cover costs that have already been determined.

Instead, we should have a dialog so inclusive and thorough that we will (nearly) all agree when it is time for another operating levy, and how large it should be. The tangible indication of a successful dialog between the community and the teachers, and the school board and the union, is a levy that passes with a substantial majority of the vote – perhaps 75%?

Having a levy pass 51% to 49% is not success – it's barely passing. Is 'barely passing' the best we can do as a community? This seems way too risky to me – a few votes the other way and the levy fails and our school board has to cut programming and staff (because the cost of labor is already negotiated into the union contracts). We saw this unfold a couple of years ago when the 9.5 mill levy failed. I most definitely do not want to be put in that position during my four year term on the school board, and I'm sure the other school board members feel the same way.

Nor do we want to slide into the mode of so many other districts – putting levies on the ballot time after time until they pass. Just look to South-Western City Schools to see how ugly that can get.

So will you participate in the dialog and help find the solution? This is no time to be an arm-chair quarterback.


  1. Great post Paul. I agree that communication is crucial but how do we do that in an impactful way? I know personally I get information from newspapers, blogs and printed material from the district. Maybe I'm an anamoly, but I get info from print/digital sources, not word of mouth. Most of us know longer have front porches or hang out for hours at a neighbor cafe/tavern or have town meetings, so maybe learning via print/digital is typical. If so, how do you reach the voters of the Hilliard school district? Not through a blog, since you have to seek them out rather than have them delivered to you. Ideally a mass mailing, although I recognize that's cost prohibitive. Otherwise publicize it in the Northwest News?

  2. Eire:


    In survey after survey, community members have indicated that their primary source of school information is the Northwest News. I have long suggested that the space given to the weekly Superintendent's message be also used to deliver this education about school economics. Perhaps the key message can be divided into 4-5 short components, and we could run one of those components one week each month until we get through all 4-5 of them. Then we start all over again - a kind of continuous message loop - necessary because only a few people will see it and absorb it each time around.

    The district already spends a pile of money every year sending out several issues of the "Passing Notes" newsletter to every address in the district. No reason why one page of every newsletter couldn't be devoted to basic school economics.

    For those who prefer electronic communications - a school economics section on the district website would be appropriate, and the e-blast email distribution mechanism is also available.

    Public meetings, coffees with the Board members and all that are helpful, but reach a small fraction of the public. This is a mass communications exercise.

    There's a lot more we can do to get this education about school economcs out if the leadership would just agree that it needs to be done. I've told the other Board members that I volunteer to chair such an effort.

    Haven't heard anything back yet.

  3. Paul,

    A couple of points:

    1. "I understand enough about negotiating in general to appreciate that having an experienced professional negotiator representing the interests of the School Board is a good thing."

    You will soon find out that the negotiator represents the administration. In fact, all consultants -- paid or volunteer -- represent the administration.

    2. Why is a strike harmful to the students? Wouldn't a strike be an eye-opening experience into the real world of politics? Wouldn't that be a lesson on unions, bargaining, strikes, etc., that books can never fully explain?

    By making your claim, you have already given a little to the unions.

  4. Jim:

    1. This may well be as you say. Apparently our school board has hired the same negotiator for several cycles. I look forward to meeting him.

    2. I don't know that a strike is in fact harmful to the kids because we haven't experienced one around central Ohio for a very long time. But I am confident that the parents of our community are absolutely convinced that it would be a catastrophe - particularly for the high school kids. And it's not so much the academic disruption that is feared - it's the extracurricular activities. Note how quickly a long string of levy defeats was turned around after extracurriculars were cancelled in South-Western.

    I truly hope we can get where we need to be - in regard to sustainable economics - with respectful dialog between the teachers and the community. This has been my goal for years.

    But the latest report from the Ohio School Boards Assoc is that the teachers' unions are being advised by the OEA to "get all they can while money is available."

    The outcome won't be pretty if it's the OEA/HEA vs our school board in this negotiation, and the school board is left swinging in the breeze by a community who is apathetic to these issues.

  5. Paul,

    Strikes, and threats of a strike, are a lesson in the school of Public Choice.

    Assume that a new negotiated agreement would lead to a $700 annual tax increase, ceteris paribus.

    A strike also has costs for parents: lost wages, lost vacation days, etc. It doesn't take too long of a strike before most parents begin losing more than the $700 in taxes. So they push the board to settle and then push the tax bill on their neighbors.

    For many, it's better to have their neighbors pay an additional $700 annually than to suffer an loss arising from a strike.

    Public Choice = concentrated benefits and dispersed costs.

    The concern of parents regarding a strike and their high school students is a bugbear. A strike experience through the student's eyes would be a great college essay. May even move a child up the acceptance list.

  6. Paul, can you alert us if the board will be putting up the Audit and Financial Committes report on the website or in the minutes.

    It would be nice to know what their latest information they are presenting to the board, especially how it relates to monies available for the next contract and if they have done any projection on levies needed over the next 6 years. The information on continuous 10 mill levies that you noted might need to happen will be not sustainable.
    A period of holding the line for the next 3 to 4 years on benefits and salaries will be necessary
    Also, the 2.5% increase in the pension contribution also has to be accounted for. Good luck

  7. The disparity between what people believe salaries are, and the actual truth, shows how in the dark the average taxpayer is. I know that when I have personally told people those actual pay figures, they are always shocked. And it seems to me that it can be inferred, if not proven, that the survey tends to point out that most people actually think teachers are being more than adequately compensated, although the survey question was so poorly designed as to only point out how in the dark the respondents are. It also brings up the question of why the survey was even done if they are not going to publicize the results to each and every taxpayer. I am wondering if it would be possible for Paul to write a guest column, or series of guest columns, for the NW News, that include some of the great data that he shares with us here, since there does not seem to be any other place the public can go to find it? If Paul is precluded due to his soon-to-be official capacity, perhaps Justin or Don? The union is profiting from this lack of factual knowledge, and it is only fair to counteract it. And before anyone gets their dander up and says I am anti- teacher, dig way back to when I had time to post more often on this blog. I am not anti-teacher, but I am for fairness for all parties and I am sticking by my previous points that teachers cannot be exempt from living within their means, and that means living within OUR means. And I respectfully disagree with Jim Fedako's suggestion that Paul has given the union negotiators any type of edge - those people are professionals and well schooled already in how to lead sheep to the slaughter. Somehow I doubt that Paul will be on that negotiating committee anyway, although he should be the number one choice, if for no other reason than to give the taxpayers a fresh perspective on how their money is to be spent. In my humble opinion, that has been sorely lacking in the last couple of rounds