Assessment appeals and their role in tax issues

At the risk of creating more controversy that has nothing to do with solutions —I responded to a post on Community….Matters from John Peterson who denounced the “GOP” lead school board driven by GOP issues. I will stand by each and every budget decision made during my time on the board, and I can assure you that the largest component of tax increases related to staffing were a direct result of a community study we undertook in response to KIDS COUNT, an extremely well-funded group that pushed for and achieved class size targets well below anything we had ever experienced. During times of lucrative transfer tax revenues, and new development with a rising tax base, these costs were absorbed. Kevin Grewell was elected to the board as a Republican after switching parties to get the TTRC endorsement, presumably because there was no organized process for running as a democrat. In defeating an incumbent Republican for the seat (Rick Zagol), Kevin ran on a platform of spending more for smaller class sizes. MUCH smaller in some cases. There were several board members who had previously been associated with the Democratic party but switched to Republican registration absent any benefit to a Democratic affiliation.

There was a claim made on the blog comments that TESD services since 1996-2000 have been degraded, with lost of activity ….the size of the population has simply grown exponentially. And the cost of housing in this community has risen to levels that new residents who choose to purchase here come with many, many expectations.
Can we please talk about the realities and not the theories. The issues on the table absolutely were predictable. The health care increases are easy to point to — but it has happened before and is the reason the district has a fund balance. $4M of fund balance right now is designated for “retirement obligations” which means severance and other issues for sitting and retired administrators. When I attempted last year to look at the contracts of these people, I was met with anger and changes in policy as to how to look at these numbers.

It’s fine to understand the reasons behind the increase, but not okay to suggest that they were surprises. Assessment appeals are quite typical in a down market. Countywide reassessment was done in 1998 — the CLR since that time has gone from the goal of 100 (meaning market value would equal assessed value) down to 53. Actually 2008 showed a rise to 53 from earlier levels — but since the CLR reflects the percentage of market value that the assessment should reflect, a steadily decreasing value ultimately predicts that the effort of reassessment is now worthwhile as the outcome would be significant enough to undertake it.

1998 93.4
1999 89.8
2000 85.2
2001 80.5
2002 74.0
2003 68.0
2004 60.8
2005 54.9
2006 51.8
2007 51.7
2008 53.0

I apologize that these are not “sound bite” comments, but as you know from previous postings, I have a great deal of information to share and would like us to all understand the implications of our current tax level.

One other response, however, is that the teachers’ contracts rarely try to work around economic predictions — and the PSEA (if you read their website right now) advocate for growing the starting salary so that there is a shorter time to reach “career” earnings (the top step) and less “percentage increase” required per year….the local salary schedules reflect a competitive look at neighboring districts along with a formidable staff of PSEA staff running numbers and making offers or responding to district offers — all the while knowing that the elephant in the room is a strike. Board members know the damages of a strike — so the abililty to influence the outcome is severely limited and is only likely to come out less in the union’s favor with a willingness not to blink. Where would the community come down if our schools were closed for two weeks? (I have referred to this before, but due to some legal conclusions reached at the state level, teachers do not lose any salary or benefits during a strike…I can explain if you have any questions about it).

Thanks.

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Buy a house for $500,000 What else do you pay?

I am a numbers person and have been for as long as I was associated with the school board. Earlier I posted the revenue per student in several neighboring districts — but that left a gaping hole in the information because some expressed the reality that commercial/residential mix affects enrollment numbers so tax revenue per student could be misleading. We agreed to disagree. But I do have some other figures to contribute here to keep the discussion focused on what seems to be the consensus primary issue: Yes, we can find some ways to reduce costs in the district, and I wholeheartedly agree that the salary schedule has lost its way under the direction of a local union that takes its marching orders from Harrisburg — but I truly believe that TESD cannot and should not attempt to redesign its curriculum and the program of studies to respond to this. We need to look at the truly BIG picture of living in this community — and our local effort to producing the educational program which clearly plays a role in property values in this community.

Here’s some information on property values and taxes that gives you (hopefully) a clearer understanding of our level of taxes for schools:
Let’s buy a $500,000 house — in any of several neighboring districts. When we buy that house in Tredyffrin, the school district gets 1/2 % and the township gets 1% (most townships, including Easttown, only get 1/2 %). That income is the epitome of variable revenues — it only comes in when properties change hands.

Now — the State Tax Equalization board annually reviews assessed values relating to market values in every tax community (county based for the most part) and standarizes the values statistically. They produce a ratio known as the CLR – common level ratio — that reflects the percentage that your equitably assessed value is of the market value. Assessment appeals use this number in decision making.

Without bogging down here, you can go to the steb website to see these CLRs. They are done by county. Chester County’s CLR is 53. 0 Delaware County is 61.3 Montgomery County is 54.0 and Bucks County is 9.7 . In each case, the predetermined ratio for these jurisdictions is 100 — which means they would like to think assessments are at full value. The CLR fixes that annually to be sure new properties are assessed correctly.

So, our house that has a fair market value (sells for) $500,000 in the above four counties would be assessed as follows: (fair market value x CLR%)

TE, Great Valley, Unionville — $265,000
Radnor – $306,500
Lower Merion, Upper Merion $270,000
Council Rock, Central Bucks – $48,500

Knowing these assessed values on our $500,000 purchase house, (make it new construction for the sake of understanding how the assessed value is reached), school taxes on this house based on this fair assessment would be as follows:

TE – 17.47 mills – $4,629.55
GV – 18.22 mills $4,828.30
Radnor – 20.2731 mills $6,213.71
Lower Merion 21.4015 mills $5,778.41
West Chester 17.85 mills $4,730.25 plus EIT
Council Rock 107.96 mills $5,236.06 plus EIT
Upper Merion 15.24 mills $4,114.80

The mills I use come from the most recent (2009) county tax roles. If you find an error, please advise as I am relying on the information publicly available.

So — you can ignore any effort at comparing revenue and mills and revenue per student. These figures are the school property taxes paid by a resident in a $500,000 market value house across these districts. If you bought your house a long time ago, thedifficult fact is that the economy may have given you lots of equity, but not necessarily income to support your property’s value. You made a good investment but you may not be able to keep it unless you are willing to tap into your equity.

TE can and will make cuts, but families moving here are  investing in homes here to send kids to our schoolsare thinking about educating kids today and into the future. You have been rewarded for the district’s achievements in the value of your home. We need to find a balance between income (which has nothing to do with the way we tax for schools locally) and the value of your property. The issues of teacher compensation are a state wide issue — collective bargaining when combined with the power to strike (and teachers do not lose one dollar of income if they strike) does not serve an ideal purpose. PA has the highest percentages of teachers strikes in the country. Many states do not allow teachers to shut down an education system.
So, let us continue.I apologize for being long-winded, but it’s a fairly complicated topic and deserves more than sounds bites. In 3 terms on the school board, the only budget hearing that ever had a crowd was when we discussed the options of an income tax — presuming that income reflects more reliably a resident’s ability to afford schools — and we all know how those studies end up. NO MORE TAXES is a general rant — how we generate those taxes isn’t even open for debate because the immediate presumption was always to fear any additional source of revenue (income) because it would open another pocket to governmental seizure.  Maybe now with all the comments about what people can afford, there will be some discussion about using income as ONE of the ways we determine how to fund our schools. 

More on the sources and options later.  In the meantime, TESD is going quietly about changing programs to fix budget problems.  My kids are graduated — one lifer from our schools even went to Harvard without any athletic ability — so I don’t want to see the system taken apart on the altar of fiscal conservativism.  I don’t think our schools are expensive — though I do believe the teachers will need to pay for health care in future contracts.  Until they do, they will never understand that they are health care consumers — not benefit recipients.

Learning about property values and assessed values

I’m under the weather from a continuing virus, so I was unable to attend TESD’s education meeting this morning — which is not good.  Right now the whole process of running a school district is being justifiably scrutinized because there is a strong public concern that we cannot afford to pay for the school system we have.  While the Finance meeting is where we learn about the numbers, the Education committee meetings are where we learn about the programs.  If we only look at the numbers, it’s absolutely the tail wagging the dog.  So I will look forward to a review of this morning’s meeting and I hope someone will post it here or on Community Matters (post there anyway — there has been some concern I am trying to reroute traffic here — when in factI think what I have to say here is pretty boring and is only read by hard-core numbers people).

 Ray Clarke posted an extensive commentary on this subject on the Benson blog recently, noting that school taxes have risen dramatically in relation to the income of our residents.  “At some point soon that limit will be reached. After five years of 10% union total compensation increases and 2% inflation, the percentage of pre-tax income paid in school property taxes by a household earning $100,000 living in a median T/E house assessed at $252,000 will have risen from 4% to 6%, after ten years, to 9%”  See Community Matters for the full text — Ray Clarke 1/11/10 on Continuing Budget Discussion for TE…

Mr. Clarke and I have discussed the nature of school funding on the blog and at the most recent school board finance meeting– and I posted data relating to the property tax revenue per enrolled student in several neighboring districts.  TE’s property tax revenue per enrolled student (the rate the district must set annually) is lower than many/most neighboring districts except those with earned income taxes.  That’s not to suggest (though it certainly does not disprove) that TE spends its income effectively compared to those districts — but it does illustrate a perspective I want us to consider.

I include info from these districts in response to another post who wanted PSSA scores included.  I am focused on revenue sources, not spending.  That’s the next piece once we identify what we can afford.

The local tax revenue from property taxes only per enrolled student is as follows:

TESD 13,359.45
GVSD 15,263.00
Radnor 16,376.43
Lower Merion 24,464.21
West Chester 12,497.04 plus EIT
U-CFSD 13,409.22 estimated on CC values
Central Bucks 9,675.55 plus EIT
Council Rock 10,767.00 plus EIT
Upper Merion 16,387.19

This most recent recession (I still think it’s more like a depression, but fortunately my background is in business, not economics so what do I know?) has badly damaged the incomes of many, many residents.  Unemployment is up, cost of services is up, taxes are up, ….yada yada yada.  Property values are no longer rising at the same steep level of the prior ten years, and could be called flat for the most part. 

Before I go into the specific details that trouble me in TE, here’s some background on how values are determined and therefore why there is evidence to consider millage comparison between districts as a legitimate tool in the discussion.

First, I take you to the State Tax Equalization Board  www.steb.state.pa.us

Here’s their job:

CERTIFICATION OF MARKET VALUE

The primary function of the Board is to determine annually the aggregate market value of taxable real property in each political subdivision and school district throughout the Commonwealth of Pennsylvania. Legislative restrictions as stipulated in Section 7 (3) and Section 14 of Act 447, determine the computation procedure to be used in an odd or even year.The market values are certified annually to the Department of Education and the respective school districts on or before July 1 of each year. These market values are used by the Department of Education as one factor in a legislative formula for the distribution of the state subsidies to each school district.

COMMON LEVEL RATIO

This function of the Board is to establish a common level ratio of assessed value to market value for each county for the prior calendar year. Act 267 of 1982 requires the State Tax Equalization Board to use statistically-acceptable techniques, to make the methodology for computing ratios public, and to certify the ratio of the chief assessor of each county each year.

The most recent (2008) common level ratio for several neighboring counties is as follows:

Chester  53.0

Delaware:  61.3

Montgomery: 54.0

Bucks: 9.7

Now, if you are a taxing authority concerned with how accurate your assessments are, that’s not too good.  The intended ratio for these four counties is 100.00  – it’s officially called “the predetermined ratio.”  Not every county has  full market value (100)as the goal, so automatically comparing millage rates can be misleading. You need to see the full range of numbers for the county/district.

As a taxpayer, however, the lower the number, the lower the ratio of assessed value to market value – and  you are being taxed on a property whose market value is higher than the assessed value.At 53.0, Chester County is lower than Delaware by a wide margin and comparable to Montgomery.  I’m not a statistician and won’t bother to work on the variability, but I will be content to say that the CLR is a statistically significant calculation certified annually, and it is what it is.

To understand how these numbers are used, I take you to this site for definitions:  http://www.assesslaw.com/terminologyanddefinitions.html

The short answer here is that the CLR is the ratio you can and will be required to use when evaluating your market value assessment.  (you use this ratio if it is more than 15% off the predetermined ratio).   It does create apples to apples across the state because PA has uniformity in property assessments — i.e., it’s not about equipment or what is produced on the property.  So the CLR equalizes values.

Now I take you to Testing the Fairness of your Assessment http://www.assesslaw.com/testingthefairness.html

All this stuff will hopefully lead you to accept the premise that the 3 counties and districts within them that I am using for comparison to TESD are comparable when looking at tax rates.  It’s not about the amount you pay — it’s about the relative amount of your property market value that you pay. 

Note:  You can test your own assessment value by multiplying the fair market value of your property (which is obviously opinion absent any legal appraisal)  by the CLR — that is the fair assessment for your property.

Assessments are done by county. SO, consider a house that sells for $500,000 in Tredyffrin township (fair market value).  If it was assessed correctly, the assessment value would be .53 x 500,000 or $265,000 .

The same sale price in Radnor (Delaware Co) would be assessed at 306,500; Lower Merion and Upper Merion (Montgomery county) at $270,000; Bucks County at $48,500.  I refer you to my next posting for the information on taxes relating to these assessed values.  I invite your comments in the meantime.

TE Taxes relative to GV, Radnor and LM

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:

 Four districts – TE, Great Valley, Radnor and Lower Merion . Details are available on a companion website (where I can post links more easily) — check it out there and then return here.  There is a PDF file there with the calculations used to generate the summary.

 Thanks.  Please feel free to share your thoughts.

Foreign Language in the Elementary Schools

I include this information here to provide the background on the introduction of the FLES program.  The decision to cancel it has been tentatively made — though some would say that it was just the first shot fired over our collective bow to get attention — but considering the premise behind its introduction, I hesitate to accept its demise.  In my view, nothing that led to this program has changed — except perhaps the Administrative support may have retired or simply faded because of an abundance of expectations. 

Anyway, when now retired Dr. Folts and Dr. Slobojan were part of the strategic planning process, here’s what the District proclaimed:

From the TE District website:  http://tesd.net/fles/program.htm

We believe that learning a foreign language in the elementary school is an essential part of a child’s education and development.  

Making Foreign Language A Part of The Strategic Plan

•  Tredyffrin/Easttown’s 1996 Strategic Plan emphasized the importance of student proficiency in a foreign language.  It stressed the need for graduates to be prepared to live and work in a global context.  This was the starting point for the FLES program.
• On both the national and state levels (and the international front), there is an urgent call to improve the foreign language competency of Americans.  From the 1983 report A Nation at Risk to the Pennsylvania Department of Education’s expected learning outcomes, foreign language study is viewed as an essential component of education.  
• Scientific studies indicate that there are sound physiological and psychological reasons to initiate foreign language study with children at an early age.  

Cognitive research shows that very young children learn language easily due to the elasticity of the brain.  

• In fact, this research states that the learning window, when the peak acquisition of a foreign language occurs, is between birth and ten years of age.  Yet, for most students, foreign language is introduced and formally studied when they are twelve years of age or older.

Academic research also supports teaching of a foreign language at the elementary school level. 

•  These studies indicate that the benefits of early foreign language programs go beyond language acquisition.  These benefits include the development of students’ creativity, memory, and listening skills.  There is specific research to suggest that the child who learns a foreign language at an early age makes greater progress in the acquisition of English language arts, specifically, in the areas of reading and writing, than the child who has not had experience with a foreign language.  Studies also show that students who have studied foreign languages attain higher scores on the Scholastic Achievement Tests (SAT) and the American College Test (ACT), especially in the verbal areas.

Learning a foreign language benefits all children, regardless of academic ability. 

• Foreign language study in the elementary school incorporates all of Howard Gardner’s Multiple Intelligences and uses a multi-sensory approach.  
• It sharpens global awareness and exposes children to other cultures and thoughts.  The study of foreign language at the elementary level helps prepare students to interact in the global community of the future, thus helping to place our students in a more equitable position with students from other global countries.  
• Research also indicates that children studying a foreign language have an improved self concepts and sense of achievement in school.
• The FLES program at T/E strives to incorporate District initiative’s of Self-Directed Learning, Technology, and Differentiated Instruction to benefit students overall learning, cognitive, and personal development.

We believe that students who begin foreign language study throughout their education in the Tredyffrin/Easttown School District will develop a higher level of proficiency in both foreign language and English.  

• We believe that along with strengthening skills in language acquisition, our students will learn about other cultures and broaden their global awareness.  
• We believe that the study of foreign language, beginning at the elementary school level and continuing through high school, will enhance and strengthen our students’ career potential and help broaden their employment opportunities.  
• We believe that foreign language instruction at the elementary level will add a significant academic dimension to our students’ educational program.  

 

 

Adding to the discussion

Encouraged to finally attend a finance committee meeting in this new budget year, I have decided it’s time to resurrect this blog.  School spending is a big deal — but this year it’s really more than a big deal.  Locally (TESD) we are in the process of deciding if we are getting what we pay for, and whether we are willing to pay for what we are getting.  I’m not going to write much now because I am putting together some information regarding our tax rates locally.  Pattye Benson has productively stepped into this arena to keep the discussion flowing, and I have no interest in debating topics originating there.  But after attending the January 4th finance meeting, and then reading Mr. Clark’s summary, I see many questions surfacing that don’t as much require debate  [read: heat] as light [read: understanding].  I made a comment at the meeting about TE millage rates being lower for education than neighboring districts (including some with earned income taxes) except for Upper Merion.  Mr. Clark suggested that we need to realize that their assessments are different.  Well — it turns out that we are both right (surprise!) but I believe this community needs to come to terms with the level of support we need to offer our educational programs.  Millage rates are apples and apples in that they represent the relative percentage of your property value that you contribute to education. 

But more on that in the next post.  I refer you to the website for the State Tax Equalization Board (www.steb.state.pa.us) to start to look at the relative values of communities and the contributions to education.  There are all kinds of factors to consider — total student population, total assessments, market values vs. assessed values….and I’m going to look at all of it and report to you here.

So — I don’t want to take readers from Community Matters — I want to add some  information on school spending here to be sure when we debate, we have answers, not just questions and ideas.  Plus, those supervisors in Tredyffrin are all posturing for political advantages.  Their tax effort may be about future election materials.   Think about it — the Tredyffrin township budget was held at 2.23 mills.  The school district budget starts at 17.47 mills.  During this past election, I got 1 mailing for the Republican candidate for school board.  I cannot begin to count the number of mailings I got for Supervisor.  Clearly we think that’s the most important position — at least the politicians do….

After serving on the school board for 11 years, I can assure you that no one decides to serve there for any amount of time with political aspirations.  People may go on to other political roles, but being on the board is simply an unpaid, vastly underappreciated task.   But it’s time to get serious folks.  TE Schools are remarkably successful.  Our property values are fueled by their reputation (then again, maybe folks move here because of our excellent park system).  The decision to take $9M out of the budget for next year will assure a dismantling of several programs.  Now, maybe we will decide to do that, but let’s not ignore the realities of getting what we pay for.  Union contracts aside (and that is another issue — truly — and moot for this time around), TE’s contribution to the value of homes in this area is not in dispute.  Sure, they cancel the FLES program – we cannot “afford” to teach elementary foreign languages.  No problem.  That’s a K-4 program and won’t be felt for years.  But what does it say about a district that abandons a program specifically designed to address  what may be one of the flaws of American education — and had a strategic plan specifically to answer the call (see the post here on FLES) 

Okay.  Time to publish this and get this started.  I encourage feedback and comments.  You have the topic.   Now, take the floor.

Thought for today

The only people who claim that money is not important are people who have enough money so that they are relieved of the ugly burden of thinking about it.

Joyce Carol Oates (b. 1938)

I’m back…..and talking about contracts

Not that I have any allusions about anyone missing my blog during my absence, but I will explain  that I have stayed away from this blog topic until the municipal primaries were completed for this cycle.  I didn’t want to find myself in the position of endorsing or denouncing anyone who has the energy and willingness to serve in a public position.  Now — do I support term limits?  — that’s another question and one I don’t have an answer for.  School boards are not well served by extensive participation by the same voices — especially when the incumbents believe they should stay on the board to “protect the seat” from the unqualified who dare to run against them.  On the other hand, the PSEA has been around for a long time, and will continue to formulate a state-wide (and nationwide to some extent) strategy every year.  It may take a few terms before a board member can really understand the role of negotiation in managing your own district.  So a mix is good — depending on the components in the mix.  With senior board members including new members, we are well served.  When they are an exclusive club, who have little regard for new ideas, not so well.

As I stayed out of the election fray, I found myself cringing at periodic statements by candidates about what they could do for this community.  While my thoughts and comments are in response to local candidates, my concerns are most certainly relevant to anyone running for or voting for a school board position.  “Fiscal responsibililty” – giving our children the best” – “keeping taxes low” …..and all those platitudes that we all like to hear.  One local candidate surely cringed after knocking on my door — not knowing what would face him on the other side.  I asked about his goals and what he felt he could bring to the table, but then I went off on how simplistic it is to have goals and how difficult it is to accomplish them.  This candidate felt that his demographic (elementary age children) was especially lacking on the current board.  I, of course, reminded him that everyone who has a child in the district was at some point an elementary parent first.  My first year on the board my youngest child was 5.  I knew then and I know even better now that elementary parents have very little perspective on the process of educating children.  Each level has its own talking points — and each level is obviously naive about what the next level has to offer.  The continuum is the base of knowledge. 

Am I saying that an elementary parent is unqualified?  Nope.  I just know that what you want to accomplish when your children are first getting on a bus to school is very different than what you can afford to attempt when your last child is graduated from the system.   Having your children in a classroom for a large part of the day is a very vulnerable position if you are at all in an adversary role with that classroom teacher.  Parents have their needs — and teachers have their rights, and kids just have to be there.  It’s an interesting and complex mix.

As a new elementary parent, your precious child leaves a preschool where you know the teacher well and he/she knows you by first name.  You have dropped them off (maybe even at the classroom door) and picked them up with a personal hand-off.   When it’s time to start kindergarten, you actually walk them to a BUS STOP where they get on a bus without seat belts, and they attend a building without air conditioning, and they go in the morning or afternoon (without you choosing), and the bus only goes one direction….and unless you have a lot of time to volunteer in the classroom, the teacher may not even recognize you at ACME unless you remind her/him who you are.   And if you are a full-time working parent, you may never have occasion except for curriculum night and the scheduled 20 minute conference to actually see the teacher.  And that preschool class that had maybe 12-15 kids in it — seems intimate if you are on the wrong side of a class size policy….(which always seems wrong if your child is in it).

So what does this have to do with contracts?  Here’s my focus for the next few entries.  I did several contracts during my time on the T-E board.  I felt the process was civil and went well.  There were occasional attempts to influence me through my children (“ask your mother what the Go for the contract button means”) and one threatened unfair labor complaint because I had “intimidated” an un-named teacher that taught my child.  (quickly recanted when my lawyer suggested I get the details or we would consider defamation charges).  The negotiations were about terms of work (7 hours and 35 minutes is our contract day — longest in Chester County – not negotiable!!!) and wages/benefits. 

 But here’s the deal I understand now, away from the table, that I didn’t even consider then:  we didn’t negotiate wages or benefits.  We negotiated raises and increases in benefit costs — and how we would account for them.  And folks, that’s the problem.

Teachers deserve to be well paid, but in this economy, it’s hard to define what that means.  College graduates are looking desperately for jobs.  Salaries reflect the numbers of applicants chasing few jobs.  The notion of an underpaid teacher is becoming  outdated — especially when contrasted with unemployed workers.  Teachers do not make hundreds of thousands of dollars, but they do make a very decent salary that is based on 180+ days of 7 hours and 35 minutes of work (that’s the contracted part).   They are paid by a taxing authority, so there is little fear of a pay check not clearing the bank.  Pink slips are virtually non-existent.  There is no mandatory retirement age enforced, and quality is what the individual teacher chooses to deliver.  TE is one of 6 districts in PA that has met the PSEA goal of a $50K starting salary. This starting salary  goes up every single year — and the salary for each teacher goes up every single year (and each salary step seems to increase with every single contract).  Districts (taxpayers)  pay for graduate education that triggers another form of raise for negotiated levels of achievement.  Teachers have a benefit plan that doesn’t resemble anything in the private sector in that the employer (again: taxpayer) pays virtually (and in some cases 100%) all of it.  And no matter what year it is, or how long the contract is, the above comments stay true.  The end of one contract simply  means you start talking about the new raises, and the new, higher starting salaries, and the new “top step” money….but rarely do you add any obligation to the process of teaching.  Sometimes they will add a non-teaching day (or even a teaching day) but that increases the salary and obfuscates the actual raise percentages.   Oh yes — you are tenured after 3 years…so performance isn’t a factor in your salary either.  After their annual union meetings in Hershey setting state-wide strategies, one district negotiation focuses on  improving education benefits, another improves health care benefits at retirement, and another might put lots more money on the “steps” of the salary schedule.  The next contract, your teachers are coming at you with whatever the other district improved (regardless of where you have already added costs).  This isn’t done to attract teachers (though it does influence individual decisions, there are many, many applicants for each position).   This isn’t even done to retain teachers (or there would be a state contract).  This is done because every district wants to claim to be the best, and teachers have a right to strike. No one on a board or in a district ever wants that to happen — including the teachers.  So it stays amicable and pleasant and you reach an agreement where the district only spends “some” extra money…and every teacher who was already going to get a raise now gets a bigger one than in the previous contract for their level and education.  And papers never talk about taxes — they talk about tax increases.  Keep those increases low…. The idea of freezing wages  or keeping staff on the same “step” for more than a year is simply not on the table.

The other piece — our state allows you to accrue the right to a pension at the rate of 2.5% per year worked, on your final 3 year average salary.  So, start at 22 years old — at $50,000.  Work 185 days or so and have as the baseline that you do not get rated “unacceptable” (which doesn’t influence your pay, just puts you into a professional improvement program).  Once hired, you get a guaranteed raise every single year you teach (tenured at 25 — so your job is yours) — and retire at 62 with a pension equal to 100% of your salary that is untaxed in Pennsylvania.   (And if you still want to work, you can come back in another capacity — often in New Jersey — and start at a high level making a full salary and still getting your PA pension).  Let’s pretend that those raises were only 2%…(which they NEVER are) and you are making over $100K in 40 years….so that will be your pension annually.   How much does someone in the private sector need to save to generate $100K a year untaxed by the state?  And how much does each district have to contribute to the state each year to fund that retirement obligation?   So — teachers aren’t rich.  But outside of the wall street crowd, do you know anyone who is?  Had a double digit raise not based on performance any time in your recent memory?   And how many would give up raises for tenure/free benefits/lifetime pension? 

So friends. This is my topic.  I look forward to comments and questions.  I’m going to give you some examples and some thoughts to ponder.  I respect teachers, but I’ve lost respect for the contract process.  I’m going to tell you why incumbents may understand the game better than new people, but also why incumbents have in many cases been behind a major effort to hide information from the public “who don’t understand.”    I’m going to try to encourage you to look hard at the folks who have taxing authority and  control the purse  strings in your community — and what is behind their interest in serving.   We can talk about the benefits of incumbency, and the perils of naivete — and vice versa.  These people negotiate salaries and then raise your taxes based on the costs of personnel.  It’s a lot of power in a local board. 

Oh — one more thing:   I will try to explain salary schedules and contracts and benefit obligations, and how the law doesn’t penalize teachers who strike (no loss of income). That’s really an interesting twist.  (Check out the Stop Teachers Strikes website referenced in the blog roll)

I’m back….hope you are listening.

Check out this week’s Main Line SUBURBAN Life

I can scarcely begin today’s post because I don’t know which item to tackle first.  For those who don’ t have the paper or haven’t seen it yet — here are my choices:

1. Documents in Right-to-Know case released  – page 1
2. Tredyffrin Republicans will have a new look – page 1
3. Editorial: “We Need to do things a little different around here”  page 2
4. Chester County employees put on notice that pay raises may be eliminated – page 23

 I think what I would like to tackle today (in light of the fact that tonight is TE’s Finance Committee meeting) is the 4th one — which is sort of back there in the paper and might not get noticed.  It’s online from the Feb 15th Daily Local.    http://www.dailylocal.com/articles/2009/02/15/news/srv0000004699694.txt

The purpose of the article is to outline budget planning for 2010 — “Chester County finance officials have told department heads and elected officials they should plan to reduce their operating budgets 2 to 4 percent for next year.”  (Note:  The Chester County Finance Director is Denny Bolton, who was a long-time business manager for Owen J Roberts School District — so he knows the ins and outs of school spending as well as government spending).   It is unlikely that any school district would plan for a spending decrease (which is where the editorial about doing things different (sic) comes in),

Key comments from article:  

…the department heads and elected officials were urged to prepare two sets of preliminary budgets. One option should be for a 2 percent reduction, another for a 4 percent reduction …”This may be accomplished by eliminating nonmandated programs that do not align with the strategic goals or identifying operational savings…In either case, (2 or 4% decrease)  officials may need to eliminate any annual salary increase for employees in 2010.

As the article continues, some speculate that they do this worrying often and don’t believe anything will come of  it.  There are some sounds of indignation that county employees would not get the 3.75% raises that (apparently) some feel they are entitled to.  But there is also the comment by County Controller DiGiorgio 

“The vast majority of the over 2,500 county employees who work for our government do a great job,” DiGiorgio said at that meeting. “They deserve to be treated with respect. However, we need to consider whether it is prudent to provide them with a raise of 3.75 percent while recession-hit Chester County taxpayers will be seeing very little in the way of salary increases in 2009 and, in some cases, may lose their jobs in these hard economic times.”

 

Citizens of our community need to engage in the budget process.  T-E (and many districts across the state) see the state-mandated “cap” as the floor to their tax plans — not the ceiling.  A 4.1% increase does not have to be voted on by the public (beyond that increase, there are only specific reasons to increase taxes without triggering a referendum–so the “secret” is to stay at or below the cap line).  So instead of worrying about what to spend, boards are more concerned with how much they can increase without scrutiny.  How about a rebate?

Many school districts (and TE is certainly a leader in this) have significant “fund balances” — reserve money that has accumulated in the good times of real estate transfer tax growth and investment interest.  T-E’s fund balance exceeds $50 million.  So with a budget of $100+ million, and no plans to reduce spending, they are planning a 4.1% tax increase AND to use approximately $4 M from the fund balance to offset spending increases.

Taxes are a funny thing — people don’t talk about the tax bill — only the increase.  Hey — you pay the whole thing.  Has anyone thought about using fund balance to pay half the taxes?  Give today’s residents our own school tax holiday?  Sure that means next year (or maybe not until the year after) taxes would “double”, but it’s our money they are sitting on and not spending on these increases or costs. Future residents are not stuck with our debt — they are spending our savings.  

There are lots of reasons this would be complicated — and would require some serious  “out of the box” thinking. ( I live by the notion that if I have an idea — it can happen.  It just takes effort.)  But as our teachers sit in negotiations and see our reserves piling up, why would they ever step up and participate in the real economy — the one that doesn’t have annual raises OR tenure OR lucrative employee benefit plans OR pensions OR collective bargaining with the right to strike and shut down a community education program?  (That sounds like a knock at OUR teachers, but as I have stated previously, and will talk about again — our local organization (TEEA) is strongly encouraged [read: pressured] by the state organization PSEA….you know — the one whose goal is a starting salary statewide for BRAND NEW TEACHERS right out of college, no experience — of $50,000 — accumulating 2.5% a year toward a pension with 10 years to the top salary).  

More later.  Tonight (Thursday) is the TE Finance Meeting.  Maybe some of us should plan to be there?  Check out the TESD.net website for time and place.   In the meantime, please share your thoughts about these topics and any you want to talk about.

Public Information (and a new blog address)

This is a modified version of the post I left on my previous blog site —

After several suggestions from folks around the state, I am relocating my commentary and efforts to this site  from  http://TESD2009.wordpress.com  Asking Questions of School Boards (TESD). 
WHY? Because an address of TESD2009 is too local a name for the broad issue of school spending. While I live here, and was a member of the TESD board for 3 terms, this blog is not meant to be narrowly focused on TE.

TE does a great job. Don’t get my scrutiny confused with criticism. Having said that, however, I was somewhat appalled (confused, really) at a Public Information meeting this past week when the Board’s president Betsy Fadem said that TE wants to be first in education, but not transparency. Board member Debbie Bookstaber, along with Karen Cruikshank and Pat Wood did not seem to agree with this assessment. Caution in what to disclose is prudent, but openly suggesting that we aren’t about disclosure is something else.  I pointed out the denials I had received in my request for open records — and the charge I was asked to pay for a copy of the TE Teacher’s Contract ($9 for 36 pages scanned — in random order — which apparently means that our Administration does not have an electronic word copy of our major negotiation document).

Consistent with that hesitation about transparency however, the Board’s president had summoned a presentation (a paid presentation) by the District’s solicitor at this same meeting, attended by all of 3 members of the public.  Not that I don’t enjoy hearing a legal presentation on Open Records, but there was no decision to be made at this meeting, and paying several hundred dollars for his appearance  just in case a question came up seems a bit wasteful. Mr. Roos had prepared a memorandum on the topic and distributed it to the audience. That seemed to have been sufficient for the process, and his presence may have been a bit unnecessary as billable time. (Note that the District’s Open Records Officer and the Superintendent were not present at the meeting — perfectly customary in this case as the administration was well represented by other staff, but if the Board felt that the Solicitor needed to be present, perhaps they might have ensured additional administrative support).

So — welcome to my new site.  I have stopped posting on TESD2009 (for now anyway) and will try to follow the request of some of my followers — to advise readers about school spending and what kinds of questions you might ask of your own board (while examining my own local board’s budget and process.)