4/11/2008
More and more multi-million dollar cuts
I’m concerned - and I’ve written about it a lot - school funding and the crisis of seemingly never ending referendums. For example (February 17):
Referendum after referendum in the state is asking for more and more operating dollars. Districts are struggling to make really tough tradeoffs. You’ve seen the press reports… Keep French or orchestra, but not both. Eliminate gymnastics. Increase class sizes. Don’t paint the classrooms. Use older and older textbooks.
But ask the staff to “give up some scheduled wage and benefit increases?” Never.
Yesterday’s news was of departing Waukesha School District Superintendent David Schmidt telling his School Board they better start thinking about bringing a referendum forward. Schmidt stated the obvious:
The district has had to make millions of dollars worth of cuts to staff and programs to resolve discrepancies between what the district can raise under state-imposed revenue caps and its annual increases in labor costs, he said
Well, maybe it’s not so obvious, but it’s the very cusp of the discussion.
Certainly expenses that raise faster than revenues is a problem. Hopefully an obvious problem. Yes, – obvious to school boards and school administrators everywhere – but apparently not so obvious to the DPI, the governor, or the legislature.
And I probably don’t even need to state more of the obvious - the Waukesha headlines about these huge cuts and difficult choices are repeated in school districts across the state.
Ok, so let’s look at some rough math. Revenue caps allow school revenues to increase by about 3% annually.
Expenses, primarily labor – and primarily driven by the QEO and its promulgated rules and the reality of Wisconsin’s unique mediation-arbitration rules and practices – increase typically 5 to 6% annually.
Well, as they say… duh.
This doesn’t take a big huge revision in the school equalization aid formula. What it will take is putting a couple of smart people in a room who will stay there until they tweak the revenue cap and expense rules and get them in sync.
Yeah, it won’t be easy. If you limit expense increases, that limits, most likely, increases in existing comparatively rich benefit packages. Or it increases the amounts school district employees pay toward their own health care – to something coming closer to what the private sector stiffs have seen over the last decade.
If you increase the growth in allowable revenue, you’re talking about more dollars being automatically coughed up by the taxpayer year after year after year.
Needless to say, whatever is proposed will have to get through the legislature and WEAC’s guy in the governor’s mansion. And without question, legions of teachers and/or taxpayers will not be happy. But dang it – it’s the right thing to do.
COMMENTS
Bravo Jo! Well said. Now I wish that people would hear it!
Educational programs need to be evaluated and adjusted as needed. School employees need to evaluate the educational methods used and realize that this is the year 2008.
We need to make a "herculean effort" (In the words of Mario Cuomo) to solve and balance the cost of education with methods.
David (Fri Apr 11 07:43:40 2008)
Good Morning Jo! You hit it on the head.....again. My new book coming out in a few weeks has a chapter on the subject. You and everyone will be amazed. Keep it up....some one will listen eventually!!!
John Hyland (Fri Apr 11 07:52:46 2008)
Jo,
Bravo also. I have tremendous respect for the teachers but we have challenges today and teachers have a cost of living formula that keeps them at or ahead of inflation-automatically. Health care costs can often wipe out their wage increases. Just like in private industry. But in private industry you lose your job, pension and get wage cuts to boot. On the other hand I do not believe that we simply should shout from the rooftops that property taxes are too high and keep reducing them and squeezing school budgets. Let's live within the taxes we have. Do you have any data on the QEO impact?
In your forums Health Care costs drive so many of the discussions. If the war in Iraq was being paid for by taxes (instead of borrowed against future generation) the direct fiscal impact of it would also be a common thread. Nationally we will limit everything good that we can accomplish until these two issues are solved.
dave allen (Fri Apr 11 08:42:26 2008)
Lots of data on QEO impact Dave. But the question that has to be asked is to look for data on the impact of the QEO, couched in our state's mediation/arbitration laws.
Can you be more specific in defining what you're meaning by "impact?" Impact on district spending? Impact on wages, benefits, entry level wages vs. long-term teacher wages? Impact on length of negotiations? On use of med-arb and/or med-arb rulings?
The QEO has kept wage and benefits from climbing at pre-QEO levels of 7, 8, even 10% annually. But increases are significantly above the official statutory QEO "cap" of 3.8%.
Jo E. (Fri Aprl 11 9:45:53)
Jo,
I know it's a complicated subject and that is why I'm at a loss for hard data. Maybe I'm going out on a limb in my statements. I'm thinking that the QEO increase should be tied to changes in overall economic growth. That way teachers benefit equally with the overall state. Who knows if this is feasible statistically or politically but it makes sense to me as a theoretically fair approach. If I am wealthier I don't have a problem paying more absolute dollars in taxes it is only when the tax burden increases disproportionately where I get concerned.
dave allen (Fri Apr 11 14:14:39 2008)
Things are looking up here at FP.
At least someone mentioned the war today as influential on what monies are available to support our education system.
The cautionary note I have concerns corporate contributions for naming rights and other undue influence on the education system: You know, Home Depot High.
The education process should be free of such influence even when comes to negotiating teacher salaries and perks related to the profession.
Lon Ponschock (Fri Apr 11 15:16:43 2008)
Lon, how did you get from a serious (!?) discussion on revenue/expense differentials to Home Depot High? Well, I understand the connection (a non-tax means to increase capital), but it's a stretch for today's topic!
Dave, my turn to go out on a limb. Yes, a number of "caps" work in conjunction with the economy. E.g., the state's Expenditure Restraint Program is based on limiting certain spending to inflation plus 60% of the increase in new construction. Appleton's Tax Levy Ordinance (which I authored, in 1996) uses the same spending increase criterion.
I suppose you could tie the QEO to a similar measure - a % (typically 50 to 90) of the increase in personal income is an oft-mentioned option. However, whatever the increase as capped, it's meaningless if #1, it doesn't include all wage and benefit costs and #2, isn't diluted by the state's mediation-arbitration laws and rulings.
Jo E. (Fri Apr 11 17:35:17)
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