Monthly Archives: January 2009

Look at the numbers: Tredyffrin easttown mills and more

The continued ire towards the BOS about funding the fire department is remarkable, and over on Pattye’s blog, the dreaded “EIT” is rearing its ugly head.  I’m going to comment on Community … Matters on that website about the fire department issue, but Mr. Clarke has just reminded those posters/readers that the TESD possible budget increase is half of the whole BOS budget.  He’s right.  And maybe only half right.  Because TESD spends less revenue (and gets less per student) than the four districts in my sample. While Mr. Clarke recently pointed out that comparing mills between districts is not “exact”, the information for each district can be reported to calculate relative funding by taxpayers based on property values and the percent of property in each township/district that is taxed for schools to create a  local revenue per student.  I think it’s important as we visit the issues associated with school taxes that we start to talk about what we pay for what we get….things like EIT come later when we discuss HOW we pay for what we get.  Right now, the TESD administration has been told to identify ways to reduce costs and presume no tax increases….consider that using this model, TESD gets considerably more bang for the buck then neighboring districts.   There are many ways to reframe these numbers, but here’s the start:

I have a paper I’m going to post on schoolspending.info , but here’s a taste: Four districts – TE, Great Valley, Radnor and Lower Merion .  Please feel free to share your thoughts.   

District COLUMN A Mkt Value  COLUMN B Assessed Value  COL. C Enrollment  COL. DSchool Mill A / C Market Value per student  B / C Assessed value per student  D x BLOCAL

REVENUE

(D x B)/CLocal Revenue  per student
TESD            5,971,983,400.00    4,689,191,415.00                6,132                  17.47                 973,904.66                       764,708.32               81,920,174.02                      13,359.45
GVSD            4,044,536,500.00    3,346,634,677.00                3,995 18.22              1,012,399.62                       837,705.80               60,975,683.81                      15,263.00
RTSD            3,665,279,000.00    3,084,745,872.00                3,675                  19.51                 997,354.83                       839,386.63               60,188,944.51                      16,377.94
LMSD          10,143,343,200.00    7,748,911,705.00                6,788 21.4305              1,494,305.13                   1,141,560.36             166,063,052.29                      24,464.21

 

COL A and B come from the 2007 (most recent) figures from the State Tax Equalization Board.

COL C is the updated enrollments  reported to the PA Depart of Ed

COL D is based on the current budget that applies to the enrollment numbers.

 Using 4 school districts — two in Chester County, one in Montgomery and one in Delaware

Advertisements

Notice to the TE School Board — Times are changing

I recently sent this message to our Board of School Directors (excerpts only)

     “From Today’s NYT – worth reading as you ponder real estate taxing plans, merit increases and other compensation issues. The good news for your employees is that they all have a pension guaranteed by the state, so “saving for the future” is not a critical issue and you don’t need to look for creative ways to help them do it. …..{someone on the board may be able to } help predict the impact of Wyeth on this area – the article suggests ~20,000 people will lose jobs as a result of the acquisition/merger [with Pfizer].

 

     When GE and GE/ Space did a major layoff in the 60s, even local country clubs lost upwards of 30% of their membership – so it wasn’t just the “vulnerable” that were affected.

 

     In the new teacher’s contract, people who DID NOT WORK FOR TE when you negotiated it (i.e.they started on Step 1 this year) will get these raises over the term of the contract if they do not change educational levels.

 

 

Bachelors 17.7%

Masters 18.0%

M+15

25.4%

M+30

29.5%

M+45

30.0%

M+60

34.0%

PhD

36.8%

 

 

…… Do you know ANYONE in industry that will get that kind of raise over 4 years? It’s not always JUST the big picture. These are the details that concern me. The cost of health care is not under anyone’s control …{and that fact} exposes local taxpayers to inordinate risks. Market driven issues cannot continue to be so important in compensation – as the market is likely to LURE people into education that would not really want to be there…. pre-tenure hires can be a waste of staff development resources….

 

      Here is the link to today’s NYT article:

              BUSINESS / ECONOMY | January 27, 2009
              Layoffs Spread to More Sectors of the Economy

By CATHERINE RAMPELL
Companies across the board are resorting to mass job cuts, suggesting that employers expect a long downturn.

 

 

 END OF EMAIL

 

 

I encourage readers to click on the link and read the article — though similar information was trumpeted on the front page of USA Today and I’m sure countless other media outlets.

 

Chicken Little Just Checking

Chicken Little Just Checking

 

The sky may or may not be falling — but taxing authorities will never run out of money (and we just might). The Federal government is considering spending trillions to stimulate the economy — a fairly loud signal that the economy is weak. Locally, we need to be sure we don’t budget for what we WANT, but for what we truly NEED. I believe our Board understands that — but we need to remind them when pressures from other factions influence their decision making.

How state pensions affect us locally

Here’s the commentary on this topic as it applies locally– as Mr. Nunn has clearly articulated the problem at the state level.

TESD has nothing to do with setting pension rates. The Pennsylvania State Employees Retirement System (PSERS) is a bit like a state-sponsored social security for designated groups of state workers (who also are eligible for and pay social security). The Board of School Directors only negotiates terms of employment — not retirement eligibility. PSERS requires a percentage of compensation to be paid by the employee and the employer — exactly like FICA, but without an annual cap. So each raise for any employee requires additional contributions for FICA, Medicare and PSERS. (the state – yes, your other tax pocket [YOTP], refunds a portion of the contribution for FICA/Medicare).

Here’s the taxpayer’s problem: TE may well have enough “stashed” in fund balance to avoid any staggering tax increase to pay for the increased costs of the state retirement plan Mr. Nunn warns of, but the state doesn’t — so schools are not the only source of this shortfall. YOTP again. What generosity local boards offer to their employees becomes an obligation to the state forever.

Recently, TESD approved an across-the-board compensation increase of 4% for all administrators. Given the teacher’s contract, this was not an extraordinary salary increase. My concern, however, is that it was voted on and approved by the School Board through a consent agenda item in October. October 2008– to go into effect July 2009. (The vote took place several months before the Administration started to warn about the need for cuts due to revenue shortfalls). There has been no mention of merit increases, but the Administrative Compensation plan references them, so they may be yet to come. There are moves being made by administrators — retirements and new job descriptions. I ask that the Board of School Directors deal with these changes in a public motion, and not bury it in consent where we cannot be party to the deliberations. The burden of having your compensation voted on in public is certainly mitigated by tenure and pensions. Transparency should not be something the board fears.

 

Cut PA Pension Fund Increase Jan 23 2009

I received this in today’s email from a local taxpayer — thought it was worth sharing. All the emphasis (colors) are my own.

Wallace Nunn is a former chairman of the Delaware County Council

A good return was seen in ’01 for worker benefits — now a tax increase is needed

Former State Sen. Vincent J. Fumo will soon start getting a six-figure annual pension, according to a recent report. If this sounds like a bit much, that’s because it is. But it’s only a small part of the problem.

In 2001, the leadership of the General Assembly, with the encouragement of public-employee unions, approached the governor with a plan to increase pensions for teachers, state workers and legislators. It seemed, said those advocating the increase, that the state pension funds had enjoyed excellent returns for several years. Therefore, the state could increase the pension benefits of its workers and teachers from 2 percent of their salary per year of service to 2.5 percent – a 25 percent increase.

With this level of benefits, an employee who put in 30 years could get a pension equal to 75 percent of the average of their highest three years’ salary, instead of 60 percent. Most taxpayers would consider 60 percent more than fair, since most taxpayers receive nothing close to that.

Coming up short

Of course, the argument went that this would cost the taxpayers nothing, as the state would always earn 10 percent or better returns on its pension funds. There was little discussion of the possibility that returns could come up short and taxpayers would have to make up for it.

Well, a funny thing happened. It turns out the pension funds not only did not continue to gain at very high rates, but have in fact lost billions of dollars.

This is not to say that the pension fund managers have done a bad job; they are subject to the ups and downs of the economy much as we all are. But here’s the rub: We taxpayers have now guaranteed high pension benefits.

The promised returns were an illusion, but the taxes won’t be. Over the next few years, you will likely see massive increases in taxes, especially property taxes for local school districts. Estimates of the revenue needed are in the billions, and they will no doubt grow.

Day after day, we see articles about cuts in services and possible tax hikes because Pennsylvania is, like the rest of the country, suffering a huge drop in revenue. Our leaders are wringing their collective hands, trying to figure out the least painful way to surmount the financial problems they face.

Go back to 2 pct.

Let me offer a partial solution: Go back to the 2 percent pension formula. The state’s original assumption – that the pension funds would earn enough to pay for a substantial increase in benefits – was wrong. Given that, Gov. Rendell and the legislature should rescind the increase.

This would reduce our pension liabilities by billions of dollars and shrink future budgets. And if the funds are ever in surplus territory again, let’s consider giving the break to the taxpayers. After all, they put up the money in the first place.

The leadership in Harrisburg today is not the leadership that enacted this shortsighted scheme. That should make it easier for them to stand up and say it must be changed. With 2 percent of the courage shown by our troops in Afghanistan and Iraq, our state officials could show some support for the people.


E-mail Wallace Nunn at wnunn@aol.com.

 

Teacher Strikes in PA Jan 22, 2009

I recently shared this in an email with neighbors.

From a recent Chester County Action Alert:

Pennsylvania remains the “Teacher Strike Capitol” of the U.S. In the past 7 years, PA has had 82 teacher strikes, more than all other states combined, including two strikes here in Chester County.

 

Pennsylvania is one of 13 states that still permit teachers’ strikes. We are fortunate in TESD that we have not had to experience this, but as pressures on the economy increase, our starting salary for a teacher right out of college (which is now at $45.1K for a bachelor’s degree with no experience) may well reach a level where “just say no” to the negotiators results in a strike threat. Our current teachers work hard for their money – but 16 years of teaching puts you at our maximum salary – so a 38 year old reaches our “top step” and will still get raises every year from then on. And they get tenure after 3 years in public education. The old claim that teachers are underpaid is no longer relevant in our region. Teachers in TESD work a 7:35 day by contract for 190 days, and they all are eligible for a pension system that results in a pension of 2.5% of their final average salary for each year they teach . In other words: Start teaching at 22 years old and teach for 40 years — retire at 62 after a tenured career at 100% of the average salary of your final 3 years. (free of PA income tax). This year,TE’s most senior teachers earn in from $86.5 to $100K in this contract year– pay based solely on seniority and education. (difference between low and high is due to educational attainment). No one minds paying for great teaching. Negotiations, however, are not just about good teachers and experienced ones. At the end of this four year contract, our most senior teachers will earn salaries ranging from $90K to $110.9 depending on educational level, and newly hired teachers directly out of college will get a starting salary of $52.2 . Market presures and inflation are how Unions demand and boards grant annual increases in starting salaries. The market comes from neighboring districts who offer more salary to new recruits — so in effect boards bid each other up. The teachers across the state meet together every summer to set goals for negotiations and salary/benefit demands. Boards from varying districts do not typically share strategies.

The difficulty of strikes is that it costs your family and your children important educational time – but it does not cost a teacher in Pennsylvania a dime. Work missed is either made up by cancelled vacation time (winter/spring), adding days to the end of the school year (but still ending before June 30) or not made up – but teachers still receive their full salary. They are not docked for any time missed. Teachers are paid for a full school year at their full salary, whether or not the full year takes place. SO _- the decision to strike has no true economic cost to the striking employee. Likewise Pennsylvania requires all teachers to pay “fair share” Union dues whether or not they choose to join the teacher’s union. This bill advocating a “no strike provision” does not alter a union’s ability to collectively bargain – only to keep them from holding families hostage to wage demands by threatening the quality of a classroom education.

 

That sounds dramatic –but it should not. The PSEA (the PA teacher’s organization) is the largest lobbying organization in the state. These issues do not necessarily affect people who can afford their homes — but in this difficult economy, will that be true always? In this economy it may not be true now. Contracts are done years in advance.

Click on my CALL TO ACTION page to read a request for action from Stop Teachers Strikes.org. It is an opportunity to try to help Pennsylvania join the other 37 states in this country that recognize that wage and benefit bargaining should not affect time in the classroom.

 

I was on our local school board for 3 terms and negotiated with our unions multiple times. TE is fair – but the state organization PSEA does try to call the shots way too often. Right now, the ability to strike is NOT a local issue. (but the reality that the union can strike certainly influences the bargaining strategy of the Board of School Directors.) This is about the children in our state. Please take a moment and read about this bill – and if you agree, please write a letter and pass this link on.

strikescale

Do you have any questions you want me to research?

I hope my expertise streamlines the process for those of you wanting answers. Feel free to use this contact form to ask me any questions or to guide me to research on which you have questions. I’ll respond in a post so that we can all learn together.

Information on Open Records

I have my appointment to review records at TESD on my calendar, and I have filed for similar information from neighboring school districts. It’s important that I say this: I’m not doing this to go “gotcha” — but to learn answers to questions I want to be sure are asked. When I was on the school board, I asked questions regularly as part of the meeting. Now that I’m a member of the public, I only have an opportunity for public comment twice — before and after the meeting — not as the information is presented or disclosed. That’s fair, but given my background with the District, questions don’t happen that way for me — I hear and I react. So that’s why I’m going to look at the documents.

By the way — the links I am posting are to documents and sites with information that may be interesting to readers who may want to understand more about schools and open records. A Caveat: Our school district is about the very important work of educating kids, and I don’t want to waste valuable administrative time getting them to respond to my questions. I am not encouragjng people to file requests themselves. I am very familiar with the documents and the processes involved in developing them. That’s why I am posting my analyses and research here. I hope I’m getting answers that we all benefit from hearing.

Recently with the change in the law (January 1) the State Open Records office has suggested that local agencies should go ahead and use their website to post any information requested to keep the redundant inquiries from taking up too much time. (I agree with this but for a different reason:  If someone has the record, posting it will allow others to review the record as well, and not rely on the interpretation by a 3rd party — even if that’s me.)  Given the history of privacy issues, I don’t know if school boards are ready to do that — be that “transparent. ”

While education is about evaluating student performance to the tenth of a percent, it has been my experience as a board member and as a contract negotiator that people employed in education are very sensitive to scrutiny — moreso than most. We all know the heart of it — everyone went to school sometime in their life– so it’a a natural tendency to assume lots of knowledge about schools and how they should be run. That can get overwhelming when you are the professional — trying to get a job done. But it doesn’t mean that school boards should trend to rubber stamping or that constitutents don’t have a right to ask questions. Checks and balances work everywhere. Taxpayer advocacy is not without value.

We need to encourage our school board to stand behind their tough decisions — not try to hide them on the Consent agenda. The “consent” agenda was originally used to try to avoid the time-consuming and mind-numbing public reading of each routine administrative matter–one at a time. That was a good idea, as meetings went on forever while each routine item was processed. The problem starts when the consent agenda turns into the place where major policies or expenditures are officially “publicly” approved — without any discussion or deliberation. It is unfair to the public that are trying to follow along either at the meeting or on TV. If our school board believes that they are making sound decisions about employee compensation, adding staff,changing policies or reaching strategic decisions, they should read the motion aloud and vote on it in front of the public. No one needs to hear about paying the electric bill — but extending compensation plans, awarding across the board raises, deserves at least a public acknowledgment. Our administrators and teachers work hard — and if they believe they are worth what they are paid, they should stand up to it.

WORDS TO REMEMBER
“A democratic society depends upon an informed and educated citizenry.”
— Thomas Jefferson

Thanks for listening.