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April 21, 2007

Budget Cuts: The Dog that Didn't Bark

Can anyone explain why the discussion of ways to meet the gap in next year?s school budget has not included any mention of the cost of teachers? salaries and benefits and how much they are expected to go up next year?

The district has projected a budget deficit for next year of $7.9 million. To arrive at this figure, the district has to make some assumption about the costs of salaries and benefits for next year, which necessarily implies an assumption about how much those costs will increase. There seems to be no information available from the district that explains that assumption.

In last week's Isthmus, Jason Shepard wrote that salaries and benefits are slated to rise 4.7% next year. That figure comes from a five-year budget projection that is available on the district's web site. However, I have been told that that figure is not accurate. The district's contract with MTI for next year has not yet been negotiated (bargaining commences on April 25). I have been told that the district wants to keep its budget assumptions about salaries and benefits confidential for now, in order to avoid adversely affecting its bargaining position. The idea is to preserve the possibility that the district could do better in its bargaining than it is now assuming.

This explanation does not seem compelling to me, for a couple of reasons. First, call me a cynic, but I can't imagine that the very competent folks at MTI cannot figure out what assumptions the district is utilizing, and so those the district is leaving in the dark include everyone except MTI. Second, once the district has gone through the agony of the current round of budget cuts, it will have very little incentive to try to do better in bargaining than the result that it has already planned for.

It seems to me that the cost of salaries and benefits is the dog that didn't bark in the current discussion of budget cuts. The amount by which those costs will go up next year has a significant impact on the amount of cuts that will be required.

Let me be more specific. The superintendent's preferred school consolidation plan calls for closing three schools (Lindbergh, Marquette, and Black Hawk), requiring more than 800 students to change schools, and, to my mind, adversely affecting the education available to many of the elementary school students and certainly all of the middle school students in the East attendance area. (Thanks, Art!) This plan is said to save about $1 million next year, though for various reasons I think that figure is inflated.

Let's assume for the moment that the figures in the District's five-year projection are accurate. I've been told they're not, but we've got nothing better to work with, so let's use these numbers for illustrative purposes. According to this document, the district's salary and benefits costs are assumed to grow from $189,845,020 to $198,761,362 next year, an increase of 4.7%. The Qualified Economic Offer provision of state law requires these costs to increase by at least 3.8% in order to permit the district to avoid arbitration on economic issues. If these expenses went up by 3.8% rather than 4.7%, the budget gap would shrink by $1,702,231. (This means - again assuming the accuracy of these figures - that about $1.7 million of next year's budget gap is, from a legal perspective, voluntarily incurred rather than statutorily imposed.)

According to the web site of the Wisconsin School Board Association, the total average package increase per teacher in school settlements across the state in 2006-2007 was 4.29%. If the district's salary and benefits expenses went up by 4.29% rather than 4.7%, the budget gap would shrink by about $772,000.

If these figures are anywhere close to being accurate, the district could save the same amount of money it hopes to save by closing schools by instead scaling back on the amount by which it plans to increase teacher salary and benefits next year to some percentage closer to 3.8%.

To be clear, I'm not necessarily advocating a reduction in whatever the district and Board are assuming in terms of teacher salaries and benefits. The take home pay of the teacher who lives next door to me hasn't gone up at all in the last three years. That stinks. But the school board is confronted with a menu of awful choices. Shouldn't the awful choice of cutting back the projected increase in teacher salary and benefits to something closer to 3.8% be added to the mix?

Posted by Ed Hughes at April 21, 2007 6:49 PM
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