Tuesday, March 24, 2015

School Districts Face Tough Decisions

As I mentioned in my last blog, several districts are facing tough decisions as a result of the Governor’s proposed budget. I am attaching an article from the Edgerton Reporter written by Jeff Brown, Special to the Reporter. This article was published on March 11, 2015.

Grim Outlook for School District Budget
State Cuts Might Mean Pay Freeze for Teachers

Board of Education President Matt Towns told leaders of the Edgerton Teacher’s Union on Monday night he’s confident the school district will be able to balance the budget next year without laying off any teachers.  However, teachers might have to accept a pay freeze and pay more in health insurance premiums or pay a bigger share of their doctor’s bills.

Why?  Because health insurance costs continue to rise and because Governor Walker’s proposed 2015-2017 budget includes a $150 per-pupil cut in state aid.

Towns’ comments came during an open meeting attended by members of the board’s Edgerton Education Association Relations Committee and the Edgerton Education Association’s President, Vice-President and Secretary.

Begins and ends with health care

Towns began the meeting by telling EEA President Shane Kinnick, EEA Vice-President Adam Gould and EEA Secretary Jennifer Nelson the district wanted to avoid layoffs because “when you get rid of people that means two things, and both are bad for kids- you’re either cutting programs or your cramming kids into rooms.”

But Towns said the district’s “ hands were tied” because its health insurance costs are projected to grow by nearly seven percent next year.  “Every discussion begins and ends with heath care,” Towns said.

Salary and benefits make up 85 percent of the district’s 22 million dollar budget this year, and a seven percent increase in health care costs would mean the district would need to come up with an extra $225,000 next year in order to balance the budget.

Walker’s cut would hurt

There won’t be any extra money for the Edgerton School District or any other school district in Wisconsin if Walker’s proposed budget becomes law.  The $150 per-pupil cut in state aid would blow a $540,000 hole in the Edgerton School District’s budget next year.  Board member Amy Richardson told the union leaders that would force the district to adopt what she called a “doomsday approach.”

“If we don’t get the 150 and we have to cut $540,000, then we’re not sure we can even commit to no layoffs,” Richardson said.

Stop the slide

Dr. Tad Wehner, the district’s director of finance and personnel, sounded a more optimistic note.  He told Kinnick, Gould, and Nelson that the district was considering several options to hold the line on health insurance costs, including raising the deductible on the point-of-service plan the teachers are currently enrolled in and switching to an HMO plan.

Wehner said “his dream” was to allow teachers to choose between a point-of-service plan or an HMO. But Nelson said it was her sense that teachers didn’t want to switch plans again after having to do so several years ago.  She also said making the teachers pay more for their health insurance would amount to a pay cut.

“The insurance is important and we know that goes up, but we also know our take home pay has been reduced the last couple of years,” Nelson said. “So if there are things we can do to stop the slide, because that’s starting to hurt a little bit.”

The district was able to erase a $600,000 deficit last year while giving teachers a 1.46 percent cost of living increase and covering $150,000 of the increase in health insurance costs by reducing the number of one-year teaching positions, not filling an administrative position, reducing non-health insurance premiums and shrinking its maintenance and operation budgets.  But neither the cost of living increase nor the $150,000 was enough to keep teacher’s take-home pay from inching downward.

New building, new job?

One option for avoiding layoffs, said Wehner, is to move teachers from one school to another to address changes in enrollment.  For instance, said Wehner, rather than hire two new teachers to handle a projected jump in enrollment at Community Elementary School, the district could move teachers from the middle school, where enrollment is projected to drop by 15 next year.

Nonetheless, said Wehner, there’s a limit to the magic he can work with his budget wizardry. “It’s hard to balance a budget and add stuff without freezing everybody,” Wehner said.  “It digs us into a deeper hole.”

Pauli said the deficit imposed by Walker’s proposed budget would also force the district to put off a series of maintenance projects, including installing a new HVAC system for the pool ($250,000), rebuilding the tennis courts ($500,000), and refinishing the floors in the field house.

He said the school district couldn’t use extra revenue raised after passage of a referendum in 2013 to pay for those projects because under state law the money had to be spent within 18 months of the date of the referendum.

Education is “non-viable”

Kinnick, Gould and Nelson agreed with the board members and Pauli that freezing teacher’s pay in order to avoid layoffs was preferable to a small pay increase that cost jobs.

“Nobody would want a $500 increase at the cost of someone’s job,” Gould said. Nonetheless, said Gould, a pay freeze would send a troubling message -- namely, that teaching isn’t worth it.

“It really is non-viable for people to stay in education,” Gould said. “I’m not saying this just in Edgerton, but everywhere. It’s really becoming a bad situation.”

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