Tredyffrin Easttown TEEA may be offering some help

There have been posts on other sites that claim that the TEEA offered the TESD board $600,000 to help with this year’s budget problems.  Several posters have represented themselves as teachers — members of the union — and have verified that it is their understanding that TEEA offered $600,000 but that the board rejected the offer.  The”word” is that the board refused and requested that the Union reopen the contract.

 

This is very interesting information and certainly represents in theory an overture from the Union that is worthy of further discussion and understanding.  As I posted elsewhere, it would be more helpful if the referenced offer that the board allegedly  turned down were posted on the TEEA site. It unfortunately has all the symptoms of one of those “if it sounds too goo to be true…”

I don’t want to ruin the party, so I’ll try to be brief in my theoretical analysis.  Because I do not have access to any details, I am going to have to ask some questions and make some assumptions based on the narrative about the TEEA offer:

1.PROPOSAL asserts:  Teachers offered to give back 3 days of pay, equating that to $1,200 per teacher.    My question:  Did they agree to work those three days or did they offer to work fewer days than contracted?  This year only?  Going forward?  Those are very different things and would have different implications in how they are implemented.

2. There was a court decision sometime in the 80s I believe that affected compensation — it’s the reason teachers don’t lose money in a strike. That decision basically affirmed that a teacher is a salaried invdividual — and their pay is based on a work year, not on days worked. If the work year is shortened, they still receive a full salary (which is why strikes have no economic impact on members of the teaching members of the bargaining unit)

3. Absent opening the contract to renegotiate days worked, this “give back” (if enforceable — which I doubt)  falls into this school year — so contributes savings this year but does nothing to influence next year’s budget. This is government accounting — all the savings would do is go into the “fund balance” and then that would be put towards next year’s budget — but not as revenue but as an interfund transfer.  Unless it was a change in the contract, it would exacerbate the increase in spending next year vs. this year.

This is the complexity of contracts and unions and deals that goes on all the time. After the unintended fiasco from Ms. Ciamacca’s email to teachers,  I am proud to hear that the TEEA has attempted to mitigate the difficulties. I would really like to understand the details before I stand up and cheer.  But in theory,  it is a good move. Unfortunately, as I understand school law (and I have been off the board for 10 years), the reality is that as an entity representing the teachers, TEEA cannot “give back” days or salary that are under contract. It is a wonderful gesture, but without knowing the details, I would have to conclude that it is only a gesture. To bind them, they would have to amend the contract that calls for 190 days this year and 191 next year. (I think — not sure of that specific detail)

Adamantt support for not reopening the contract saddens me.   Reopening the contract does not have to throw everything open — it’s about trust and honor. Neither side should say they will not reopen if they truly are interested in solving this problem. Living by the spirit of the law is as important as living by the letter of the law. Both parties could “reopen” for the specific purpose of adjusting compensation for days worked, or for adjusting days worked, or to reduce the annual wage numbers by the value of 3 days. I have suggested elsewhere that they reopen to negotiate a different health care plan that would be less expensive — or in fact offer this $1200 per teacher as an increase in co-pay towards health care benefits.  Reopening with an agreement in principle  does not have to open everything up.

I did a 6 year contract with TEEA as I finished my time on the board.  Carol Aichele and I were the negotiators for the school district.  Our solicitor had died in a hunting accident and we were without legal representation for the most part.  It was a person-to-person effort.  We worked with the TEEA leadership, who also did not bring any PSEA reps into the meetings.  We agreed on details for the first 3 years of the contract.  The final 3 years were left “open” as to compensation.  We agreed on parameters that we would live with, and the contract was approved and settled.  After the first 3 years, we looked at our matrix and made the adjustments to increments that we believed served both sides well –we added those three years and the contract was completed. It is about trust.  

Thoughts? I’d love to see the language of the offer on the TEEAcher.org website.  As has been referenced elsewhere that non-residents (teachers) may be denied a chance to speak at the board meeting, if we knew the background, there would be no danger that the community would be eager to speak about it.  Union President Deb Ciamacca knows that I am ready and willing to help.  We all are.

PSEA goal of avoiding “excise tax” on benefits almost succeeds

The PSEA website has been encouraging members to write their congressmen to protect their health care plans from the excise tax promises in Obamacare on “cadillac” plans (yes — this is the same idea that John McCain put forth and was profoundly damaged by).   Nationally, a deal has been cut — read for the details…

 the excise tax was one of the bigger ones. Union leaders were able to soften the tax’s impact a bit: It won’t take effect until 2013; it will affect plans that cost more than $24,000 per family or $8,900 for individuals, up slightly from the levels in the Senate bill; those levels will be adjusted annually for inflation and adjusted additionally for plans that are expensive because they cover inherently expensive groups, and they won’t include the cost of dental or vision plans after 2015; plans worked out through collective bargaining will be exempt from the tax altogether until 2018; and by then, unions in collective bargaining agreements would be able to buy insurance through a new exchange system the legislation would set up, instead of going through employers. (In the years in between, unions could try to renegotiate their contracts to get higher wages instead of so-called Cadillac healthcare plans.) The changes mean the tax won’t raise as much money to offset the costs of the bill — the tax would raise $90 billion over 10 years, instead of $150 billion as the Senate bill had it.

By the way — just two years ago… June 2008

Providing tax credits of $2,500 to individuals and $5,000 to families as an incentive to buy health coverage.

This provision is not unlike the proposal first made by President Bush at last year’s State of the Union Address. The President called for ending the longstanding tax exemption consumers get on any health insurance benefits paid for by their employer. The President would replace that with a standard $7,500 deduction for individuals and a $15,000 deduction for families.

McCain would also end the employer tax exemption—meaning that if an employer spends the average $12,000 a year on family health insurance, the worker would now have a tax bill on the portion of the $12,000 of benefits paid for by the employer.

Like Bush, McCain would offer a personal tax offset, but he would do the new offset a bit differently than Bush.

McCain would give each single person a $2,500 tax credit and a $5,000 tax credit for a family who had health insurance. A tax credit means that when taxpayers calculate their taxes, instead of taking a deduction, as Bush would do, under McCain’s plan they would subtract the tax credit ($5,000 for a family) from their final tax bill (and they would likely be able to take advantage of the credit during the course of the year to pay their monthly premiums).

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.

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.

 

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.