Monday, January 24, 2011

Now in the Hands of the Voters

Here is the comment I read into the record at tonight's School Board meeting. As I said would be the case, I voted in favor of presenting this levy to the voters in the May election.

First, I wanted to say thanks to President Maggied for calling the special Board meeting last Friday, and thanks as well to the other Board members and Administrators for participating. I think we got some important information on the table that I hope will be helpful as we move forward. And as always, thanks to the community members who came to observe.

In the fourteen years from 1976 to 1990, the Hilliard School district asked the community for additional funding only twice, raising our school taxes during that period at an annual rate of 2%, a pace that would cause our school tax to double once every 30 years.

Since then, school levies have been coming at ever-shortening intervals – five years, then four, and this time only three.

With this levy, we will be entering the next phase – putting a levy on the ballot that will almost certainly have to be followed by another in only two years if there is not a significant reduction in the rate of our spending growth. Since 1990, our school taxes have been growing at an annual rate of 7% - a pace which will cause them to double every ten years.

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There will be no significant reduction in the rate of our spending growth without a significant reduction in the rate in which our compensation and benefits costs are rising, as compensation and benefits are now nearly 90% of our total spending. I’ve been saying this for several years, and last year we heard the Audit & Accountability Committee come to the same conclusion, calling our current rate of spending growth “unsustainable.”

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I ask for bold leadership on the part of the administrators and union officers, and ask the entire team of teachers, staff and administrators to have empathy for the people of our community, many of whom are struggling to stay afloat.

There are 700 property owners behind in their taxes in our district. Approximately 150 properties have been brought up for Sheriff’s sale so far this school year.

It is my belief that for this levy to pass, the Administration and the unions will need to be forthcoming with ideas for how we should collectively address this issue of spending growth at a time when we are seeing declining revenue from all funding sources.

The answer cannot be to keep asking the homeowners and business owners of our community to pass levies with ever increasing frequency.

It is not business as usual this time around.

After the School Board meeting, I had a chance to meet with the Darby Athletic Boosters, and present to them much the same information I outlined in the previous article. My only objective is to teach folks how we came to be in this position, to ask for their help in finding a solution, and to request that they pass what they have learned on to their neighbors.

Regardless of one's philosophical leanings, we have a real money problem to solve - whether or not this levy passes - and we need people to help us find real solutions, not spout opinions without any basis in fact.

Additional note: Contrary to the story reported in the Hilliard Northwest News, the School Board did not spend months deciding on a millage amount. As I noted in my blog article of Dec 17, there was still much to discuss relative to this levy, and it was for this reason that I voted against the Resolution of Necessity during the January 10, 2011 meeting of the School Board. Until our special meeting on January 21, 2011, 6.9 mills was at best a strawman, in my opinion. I was certainly not involved in any discussions of this amount prior to January 10, 2011.


  1. Thank you for what you do. You are absolutely correct. What are your thoughts on how this district has adjusted?

  2. I'll be anxiously awaiting the "propaganda" from the board as well as the levy committee as to why we need this levy. If I don't see any mention of compensation, they had better stand by for a broadside! And there will be plenty of "basis in fact".
    Following the levy vote, we can all await the next contracts - HEA, OAPSE, and dministrators. It is my sincere hope that we see very minimal increases in compensation when that occurs - none at all if the levy fails. I might add it is also my sincere hope that I win the Powerball Lottery this week. Given the Boards past history, I think the odds are about the same.

    Paul, this is not directed at you - your continued efforts are deeply appreciated. We are lucky to have a Board member who was not endorsed by the HEA, and therefore is not beholden to only their interests. Too bad that it appears from this side that the rest of the Board can't say the same.

  3. Pickerington, Gahanna.... Is Hilliard next?

  4. That article should be required reading for all persons connected with our schools in Hilliard! At the same time, we can't just dismiss all of the senior teachers - maybe a couple years of flat salaries would make some headway on that? It would be the individual teachers choice whether they think the grass is greener someplace else, not that many other places are hiring a lot of new teachers. Wonder how many in Hilliard are getting close enough to retirement, and whether some type of early buyout offer might be appropriate? Regardless, seems at least one district has shown that things can be done differently.

  5. Again thanks Paul,
    We all know that the state is going to
    take its chunk out of the funding, I think
    there should be a 10% reduction cut off the top
    in compensation to all. It's that simple, then
    let the rest settle out. The Levy is only a
    band-aid on a gushing wound. The stitching can
    only come with some hard choices and pain. We
    all here understand now is the time....

  6. To the first commenter who asked what I think about Hamilton Local going 17 years without a levy:

    Every school district has its own unique personality. Hamilton Local is the 2nd smallest district in Franklin County at 2,100 students. It also has by far the lowest property value per student in the county, at $84,000, compared to $161,000 in Hilliard, or $280,000 in UA. While 1 mill of property tax raises enough money to educate just 30 students in their district, 1 mill will educate 228 students in Hilliard.

    In other words, the folks in Hamilton Local have long ago had to face that there isn't more money to be had, and have therefore have figured out how to live without our means.

    Compare that to the mindset of many in our school district, who believe there IS more money to be had - we just have to go get it from the taxpayers. In their mind, there is no question that every homeowner and business owner in Hilliard can afford to have their property taxes increase at a rate of 7% per year.

    But as I said, it will not be business as usual this time.

  7. STJ: I fear so, unless we finally develop the community will to have a tough conversation about compensation.

  8. Hillirdite:

    I hoping that we'll see a different kind of campaign this time around - one that engages people with the facts, not just emotion. We've got to get the tough stuff on the table, and not base the campaign on threats of what will be taken away from the kids. Let's keep the kids out of it this time, huh?

  9. I'm hoping so too, just not holding my breath. Even Dale McVeigh tried to sidestep the step increases in a meeting with the public several years ago until an audience member called him on it. The "fact" of compensation has never, to my recollection, been a part of a levy campaign, and I'll bet you 10 to 1 that the only mention this time will be the current one year freeze. As I've said before, my hat is off to the unions and the Board, for that matter, for agreeing to that but it is not any type of long term solution. And without a long term solution, there is almost no way that the kids can be left out of it. It all comes down to how they want to spend the money.

  10. Paul, sometime over the past couple years, you posted a link to all of the contracts in the state of Ohio. I can't seem to find that post. Are you able to post that here? Thanks

  11. Here it is:

    SERB public employee contracts

    Use with some caution, it is often the case that a new contract will have been negotiated months ago, but not yet posted to the SERB database.

  12. Are the salaries of both union and non-union HCSD employees outpacing the salaries in the private sector?

  13. Are the salaries of both union and non-union HCSD employees outpacing the salaries in the private sector?

    Here's an article from the Associated Press which says "wages and benefits increased 2% last year after a 1.4% increase in 2009."

    It went on to say that "The modest gains reflect a severe recession which pushed millions out of work and depressed the bargaining power of those with jobs."

    We need to recognize that the District's employees agreed to a one-year abeyance of base pay increases and step-increases. However, unless something different is negotiated in the union agreements this summer, the 4.15% step increases received by about 65% of our teachers (and a smaller fraction of support staff) will automatically kick back in. So the step increase alone is more than double what the Dept of Labor says increases have been in general.

    Over the past decade, the annual base pay increases has been in excess of 3%, making the combined annual increase for the majority of our District employees on the order of 7%/yr.

    When talking about compensation, we also have to recognize the cost borne by our employees for health insurance coverage. Until 2008, our employees got their health insurance coverage at no cost. The current contract limits their cost to the lesser of 10% of the actual premium, or $50.19/mo for single coverage and $135.52/mo for family coverage. I think the vast majority of us would observe that our own health insurance costs are much higher.

  14. It is unfortunate that the levy vote is going to come prior to the new contracts. You say "However, unless something different is negotiated in the union agreements this summer, the 4.15% step increases received by about 65% of our teachers (and a smaller fraction of support staff) will automatically kick back in."
    We must keep in mind that contract negotiations are just that - negotiations. It is a two party process and it is time for the Board to step up to the plate for the taxpayers, and the students, for once. They failed miserably in that respect 3 years ago, and that was AFTER a levy failed. That is why I keep calling for them to be transparent about where the levy money is going to be spent. It only takes a 2 minute glance at the Five Year forecast to see what part of the budget is going up, and what parts are remaining fairly stable. There is only one way to break the cycle of new permanent levies every two years and until they address that, my vote is going to be No. For the first time ever, I might add. So the ball is in the Boards court as far as I am concerned.

  15. It really is a "chicken & egg" situation, and I think school boards and unions tend to ignore the cause-and-effect relationship.

    The norm is that if you pass the levy first, the union position is to get as much of that new money funneled to them as soon as possible, regardless of the reality that this shortens the interval to the next levy.

    If you negotiate the contract first, the Five Year Forecast is simply recast to show huge cuts in programs and services if the following levy doesn't pass. This is exactly what happened in May 2008. As soon as the levy was passed in Nov, the spending plan was put pretty much right back where it was.

    I believe we need to go into the union negotiations with the position that the community will agree to an X% annual growth in costs, and that we'd like the unions to propose scenarios that fit in that constraint.

    For example: a) lower base pay increases in exchange for keeping everyone employed; b) transferring some of the pay increase dollars from step increases to base pay increases; c) early retirement incentive programs.

  16. It would be nice for a change but highly doubtful the village criers will talk about compensation.
    Four of the Board Members are so beholden to the HEA and OAPSE, ADMIN that it is like a fraternity or sorority. The schools are NEVER wrong. The arrogance is getting worse, witness the statements and attitudes of the board president and the other 3 have reached new heights of we dont care what you think !

    Seriously, for all to consider. Do any of them legitmatly question ANYTHING, EVER.

    The levy campaign will be about the kids. Excellent with Distinction, our great school system, our great staff, if we dont pay them
    big money they will leave, same with administrators. Just think. Not one person outside of this district with education experience is good enough for us.

    Any questions if they have any meetings will be deflected and the tough ones they will simply pass by with their notecard system. It will be that all is wonderful, and WE MUST PAY MORE or it will be disasterous for our kids. Have heard this way too many times, have voted yes each time, but not any more.

    Unfortunatly I think the public will cave, when busing, music, sports get the supposed ax threatning. Soon the budget will contain 95% compensation costs in relation to total expenditures.

    6.9 mills now, 6.9 mills in 2013, Most likely more than that in 2015 Start figuring out now how you are going to pay these amounts now and budget properly.

    Maybe the Ohio912 folks or the Hilliard Ed group can shine some meaningful light to the taxpayers so they are not duped again.

    The comment by the board president was pathetic
    as he tried to tell us he understands what is out there economically. This is as true as the so called "long time planning on coming to grips with the amount of 6.9 mills to be put on the ballot.

    Unfortunatly the Employees are running our School District now, not the community.

    The district has shown its true colors and could care less about seniors who have been here and supported schools for a long time, those who
    are under financial hardship, and the everyday
    community member struggling to pay higher costs across the board, while enduring paycuts, benefit cuts and huge medical increases.

  17. Dear Paul: I find your thoughts a breath of fresh air. You bring positive ideas to the table. Last levy campaign was brutal in my town and so many community members were just plain mean to the teachers. It was a little embarrassing. some members continue to do it now. It drives me nuts because these wonderful individuals are teaching my children and are doing an amazing job. I have nothing but positive things to say about them.

    So here is the problem we all face and that is compensation and step increases. But how do we create a plan that freezes these for a period of time but then when the economy turns and does better bring these benefits back? Teachers deserve raises and especially ones that correlate with inflation. So how do we protect them while saving us money? Lets face it..when the economy turns and business begins to boom again (like the 90's) the private sector will reap the rewards but if we don't provide provisions for our public education teachers, they will be stuck with salaries that reflect todays economy. We can't let that happen. they are too important to our communities. We have control over this. We need to be creative. We need to solve the immediate money crisis but we need to think about what the future may bring and provide provisions for that as well. We need to look at the whole picture.

    thank you!

  18. BeachMomRN:

    Thanks for commenting.

    The year-to-year base pay increases are the mechanism for dealing with cost-of-living increases.

    The real challenge in the comp conversation is the step increases.

    Philosophically, the idea is that teachers can go from their date of hire to their date of retirement with exactly the same job title, and therefore theoretically don't have the opportunities for promotions that are perceived to be the norm in other professions.

    The step schedule negotiated by our teachers' union specifies a 4.15% increase in each step year (years 0-15, then 20 and 23). The effect is to double a teacher's pay over the course of a 30 year career.

    So I think it's reasonable to ask whether a teachers becomes twice as effective over 30 years. I suspect that there is a quick ramp-up in the first 5 years, then afterwards the year-to-year improvement is not so great.

    That would suggest that a better step schedule would be one that give teachers large raises in the first 5 or so years, then becomes smaller with additional years.

    Of course, a consequence of this is that the final pay would be smaller, which also makes a teachers' pension smaller under current rules.

    However, it also makes the pension system more sustainable, as currently the pension is determined only by final pay, which is usually dramatically higher than the pay the teacher received for most of his/her career. If the lifetime pay pattern for teacher were flatter, the amount of contribution made while working would better line up with the pension benefit.

    The teacher comp system used by most school districts in Ohio isn't conceptually a problem, but it was been distorted by years of aggressive negotiation by the OEA. We - teachers and taxpayers alike - need to have the courage to recalibrate it to current economic reality.

  19. beachmomrn said:
    "Lets face it..when the economy turns and business begins to boom again (like the 90's) the private sector will reap the rewards but if we don't provide provisions for our public education teachers, they will be stuck with salaries that reflect todays economy."

    Sorry, but you've been utterly duped. The average teacher in the district makes in excess of $70k a year, plus a benefits package which equates to about 35% of their salary.

    The average private sector salary nationwide is about $45k.

    We'd need decades of private sector boom to catch up to the salaries of the teachers, especially when you remember that teaching is a 9 months a year job, compared to the rest of us...

    Now, don't get me wrong: teaches ARE professionals, and should be compensated in a similar manner to their private sector counterparts... as soon as they agree to the same terms of hire as their private sector counterparts: merit-based increases, at-will termination, etc.

    Instead, they are protected by tenure and get guaranteed raises without having to do anything but show up to work.

    In essence, they are having their cake an eating it too, as well as all of their neighbors' cakes as well!

  20. I think the challenge in teacher compensation is one of interia. When the economy takes off, the compensation in the private sector will likely rise with it, with little lag. In fact, sometimes private sector salaries accelerate at a faster rate than the economy as businesses compete for scarce human resources. This is the reason that in the 1990s, young computer engineers got paid a bundle in Silicon Valley, Seattle, Northern Virginia and other high tech regions.

    Meanwhile, those who choose to live in a regime of collective bargaining, such as public sector unions, have to wait until the next bargaining cycle to participate in the good times.

    Then when the economy noses over, as it always does, the private sector income drops rapidly, while those working under collective bargaining agreements get to continue to enjoy the benefits of a contract that was negotiated in better times.

    When non-union private sector income growth is substantially greater than unionized public sector income growth, there usually isn't a lot of noise made. But when it's the other way around, those in the private sector - when faced with paying the increased taxes necessary to fund the built-in raises in public contracts - are quick to say the system isn't fair.

    Let's instead agree that there are two problems: 1) a structural problem with the way union contracts are insensitive to general economic conditions; and, 2) a lack of empathy by both public sector workers and taxpayers for the other groups.

    The former can be fixed by brave leadership. The union members and the taxpayers need to elect leaders who are brave enough to tackle this problem.

  21. Contracts can be written based on forecasting too, correct? Given that they last for 3 years, if things have been going great in the private sector, grant a higher raise in the first year with smaller raises in the 2nd/3rd years. Use that first year to get up to par, if the situation warrants it, but don't dig us into a hole in years 2/3. As you say, the collective bargaining workers have the peace of mind that goes with knowing exactly where they will be for 3 years, where the rest of the workers don't even know if they will have a job in 3 years. All o fthat may be moot right now anyway.

    The situation still remains that the state IS going to cut funding and the current 5 Year Forecast could easily turn out to be a work of fiction. And as Anonymous most recently posted, teachers are already pretty well compensated, in spite of their many claims to the contrary. Paul, your last paragraph above is dead-on, but since it does not seem to have occurred during the last 3-5 years of semi-bad times in the private sector, I simply don't hold out much hope that it will occur in what is liable to be really-bad times. That will have to start with (drum roll!)"brave leadership" by our entire school board, not just one member.

  22. Add Olentangy to that ever-growing list of suburban districts seeking a levy (in May) and potentially looking at big cuts if the voters don't pass it.

  23. STJ: I suspect we'll see tons of districts on the ballot in August, after they see what kinds of funding cuts they'll have to deal with.

  24. Paul... It is eye-opening to see districts like Olentangy (among the very most affluent in the entire state) grapple with fiscal issues.

  25. Olentangy is grappling with different/more problems than Hilliard due to it's current growth trend - Hilliard went through that a few years ago and that is when things started to spiral out of control, although most of us realized it only in hindsight. Seems taxpayers everywhere are better informed now days - blogs like this one are part of the reason why.

  26. They're much like us a decade or so ago - growing their residential property base (and school enrollment) much faster than their commercial base, and have a pile of young teachers, must of whom are still getting step increases. Add to that the looming cuts in state funding, and they're in the same camp as everyone else.

    The districts at the very highest end of the income scale aren't hurting so much because by and large they are contained, old communities (think Bexley or UA) who have a slower growth rate of spending (their boom years were long ago), and were never getting that much state funding anyway.

    The one really in danger are the white-collar boom towns of the past decade or so, who get a higher percentage of their funding from the state, but are seen to have the capacity to absorb more of the funding burden locally.

    Most of the I-270 suburbs fit into this category. We will be the net losers in a strategy to shift the funding burden for all kinds of stuff from the State to the local community. That is, I think the cities of Hilliard, Dublin, Powell, Worthington, etc are going to take a disproportionate share of the hit as well.

  27. Hillirdite/Paul... True, and once I reflected on it a bit, I came to the conclusion that districts like Upper Arlington, Bexley and old-line affluent suburbs of Cleveland that are among the best-equipped to weather this storm. It is Hilliard, Olentangy, Pickerington, Westerville, etc. that are going to have to really grapple with this mess.

  28. Hilliard certainly isn't alone. I just read where Olentangy will have to cut $4.4 million from their budget, even if their levy passes.

    Canal Winchester LSD is talking about $3.7 million in cuts, if their levy fails. Amanda-Clearcreek LSD mentioned $2 million in cuts, if their levy doesn't pass. The budget axes could be falling all over the place in May.