Tag Archives: tax

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.

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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.

 

Jan 19, 2009 Getting Started

eagle-graphic1I am not in a good mood right now, but with the loss of the Eagles today, I now have time to focus on this blog — something I have considered for several months. I am a former 3-term member of the TE Board of School Directors, and I’m doing this blog to share my observations and conclusions about the current operation of the District. I believe the current board is working hard, but does not seem to be asking enough questions (public deliberation) about the recommendations from Administration that are becoming policy.

T-E is a very successful program — and I have no interest in tearing it down. I think it’s a rightful source of community pride. I believe the School Board today and in my time work hard to get things done and to elevate the level of discourse in the community. My motivation, however, comes from a the “tax to the cap” mentality that is bearing down on all school boards. It’s turning into an artificial floor rather than a ceiling. It does not tell the story of the increase in expenditures, which up to now has gone well beyond the cap. But those are details that will follow. This is just an introduction to why I’m doing this.

I encourage you to comment and share information that you have. I have made a formal request to the district for information on salaries, benefits, contracts, retirement contributions, capital budgets, fund balance and investment capital. I look forward to sharing that information with the public as I review and analyze it.

Thanks for stopping by. I don’t expect this to be a forever blog — but I hope it will be useful during budget seasons and as T-E reacts to a dramatically changing economic climate.

Please indulge me as I close with a quotation. I share it as a cautionary tale, not as a conclusion or a prediction:

The price good men pay for indifference to public affairs is to be ruled by evil men. Plato