Comparing the Proposals: Money

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And so Hinsdale High School District 86 and the Hinsdale High School Teachers Association (HHSTA) have now published their proposals for all to see (view them at http://hinsdale86.org/Negotiations%20Documents/District%20IELRB%20Response%209%2016%2014.pdf and  http://www.hhsta.org/wp-content/uploads/2014/09/HHSTA-Proposal-9-16.pdf).  But these publications are in the form of explanations rather than just laying out the details; that way, theoretically, the uninitiated get some guidance in understanding the ins and outs of what’s being proposed.  Unfortunately, those explanations can lead to even more confusion as it’s challenging to separate factual analysis from pure propaganda, especially when most of the presentations fall somewhere between those two extremes.  Plus, both sides have carefully selected data which support their views best, leaving out things that they believe would cause observers to see their proposals more negatively.  And that’s where I can offer some assistance.

Yeah, I know:  you have every right to be skeptical of somebody who was a teacher for thirty-three years (25 of them in District 86) and has written several essays critical of the current board majority.  Yes, I was a union activist for most of my career and regularly clashed with both administrators and school board members.  There’s no doubt that my sympathies lie with my ex-colleagues in this mess and that I have a clear bias in their favor.  But you also have to keep in mind that I negotiated nine different teachers’ contracts in two districts (a couple of times as chief spokesperson for the teachers of District 86) and made it my business to learn state education code, contract language, and school finance so that I could adequately represent my colleagues when negotiations time came.  So you can (and should) question whether or not I’m up to being fair in analyzing the two proposals, but you’ve got to concede that I do know a little about this process.

The key to any contract, of course, is money.  Unlike most negotiations, however, this one turns on the salary schedule.  Most of the time in high school districts around here, the key debating point is how much the base salary (the pay for a first-year teacher with a Bachelor’s degree) goes up.  Once that percentage has been determined, the index numbers of the salary schedule take care of the rest.  (If I’m already losing you, you might want to take a quick look at https://jamescrandell.wordpress.com/2014/08/10/teacher-salary-schedule-background/, which contains an explanation on how salary schedules work.)  Recently, poor financial situations in school districts have led teachers in some districts to agreeing to forego a year or two of steps (increases in the salary schedule based on experience), but in general, the base salary has been the key element to resolving contract negotiations, with the steps being a given.

But that’s not the case here at all.  In this instance, the board is offering a base salary in the first year of $54,000, which is more than 3% higher than 2013-14’s $52,397.  The HHSTA has proposed a first-year base of $53,002, which is less than 1.2% higher than last year’s base.  Both sides are proposing a portion of the consumer price index (CPI) for the next three years, 75% for the board and 85% for HHSTA’s counter offer.  Using an assumed CPI of 1.5% for the last three years of the contract, the board is actually offering a higher base all four years of the contract.  But that doesn’t factor in the salary schedule, or each teacher earning a full step, which is anything but a given this time.

After initially pushing to eliminate the salary schedule completely, the board has now proposed increasing the salary schedule’s steps from nineteen to thirty-five.  The steps determine how long a teacher has to work in a district to reach the top salary, which last year’s schedule would take a teacher nineteen years.  With the board’s new schedule, to reach the same dollar amount would take thirty-five years.  No teacher would reach peak earnings until very near the end of his/her career.  The board is proposing that teachers be placed on the salary schedule based on the step that is nearest to what they made last year (2013-14) and then move to the next step for this year (2014-15).  The board has also included language that would make sure that everyone in 2014-15, when the raises could be uneven for teachers based on how they would match up with the new steps, would get at least a 1.7% increase.  But from then on, their increase for having taught another year would be roughly half of what it had been under contracts that went back, with some minor adjustments, over 30 years.

HHSTA’s proposal keeps the old salary schedule with nineteen steps, but does make some changes.  One of the columns (Bachelor’s degree plus fifteen hours of graduate credit beyond a Bachelor’s) is phased out, with no teachers being able to enter that column unless they are in it as of this school year.  Several steps have been eliminated in the Bachelor’s column as well.  Both these moves push teachers to get their Master’s degree and would save the district some money.

The district would also save cash with the insurance coverage proposals.  The board proposed increasing teachers’ contributions for the cost of health insurance from 13% (for single coverage) or 12% (for family) to 15% in year one, 18% in year two, and 20% in the last two years of the contract, and the HHSTA has agreed to this.  How much this increase will cost teachers overall is difficult to say because District 86 is self-insured, meaning that it pays for employees’ medical costs directly instead of buying a policy from an insurance company.  So insurance costs vary from year-to-year based on the number of claims filed. Teachers’ contributions to the costs are determined at the start of each calendar year and are based on the the claims history of the previous year.  So as of January 1, 2015, coverage for a single teacher would go from $68 per month to $218, and family coverage would increase from $180 to as much as $437.22.  In the first calendar year (2015) of the contract, then, teachers would pay $1800 (single) or up to $3,085 (family) more for their insurance than they will have for 2014. Included in that $3,085 is an additional charge the board has put  into its insurance proposal, a “spousal” charge.  This is a new concept to me, but apparently, teachers who are married would pay an additional $100 or $200 per month based on whether or not their spouses have insurance available through another employer.  Spouses who did not have insurance available would be subject to the $100 monthly charge while those who did have insurance options at their place of work would pay $200.  The HHSTA has not agreed to this unusual spousal surcharge.

Other money issues include retirement incentives being lowered by half (the HHSTA proposal) or phased out (board), and retiree insurance contribution being raised from 50% (first five years of retirement) and 70% (second five or age 65, whichever happens first) to 70% for all ten years (this has been tentatively agreed to).  Additional stipends for coaching, sponsoring an activity, teaching summer school, or working an event by taking tickets or supervising would be frozen at 2013-14 levels for the term of the contract (board proposal) or increased by the same fraction of CPI as the base salary (HHSTA).

Those are the money issues.  Now, when you analyze offers from a negotiator’s perspective, you look at things as either an improvement for your group or a concession that helps the other side.  And from top to bottom of the teachers’ proposal, the HHSTA has made significant concessions from previous contracts.  There’s not a single element of their money proposal that is better than what they’ve had before, and virtually all of it is worse.  The base increases are all less than CPI, the salary schedule has been degraded by losing an entire lane plus some steps, insurance payments will go up significantly, and all extra stipends will again be losing ground to inflation by anywhere from 15-25%.  Hey, unless I had complete faith that this was the best my negotiators could do (which I do given the current HHSTA negotiators), I would vote against the HHSTA proposal if I were still working there.

The board’s proposal, on the other hand, contains nothing but gain after gain for the district.  By increasing the number of steps from 19 to 35, every teacher except those just starting out and those who have already reached the end of the schedule will earn signficantly less than they would have with the old schedule (which is about a ratio of 67% worse off to 33% okay).  To illustrate, let’s take three teachers—Teacher 1 just starting out with a Bachelor’s degree, Teacher 2 with five years of experience and a Master’s, and Teacher 3 with ten years in the district and a Master’s plus 60 graduate hours—and see how they would fare under both contract proposals over the four-year term of this contract.

Year Teacher 1Board

Salary

Teacher 1HHSTA

Salary

Teacher 2Board

Salary

Teacher 2HHSTA

Salary

Teacher 3Board

Salary

Teacher 3HHSTA

Salary

2014-15 $54,000 $53,002 $74,423 $75,087 $97,575 $99,322
2015-16 56,519 55,742 77,575 79,141 100,721 104,022
2016-17 59,155 58,545 80,307 83,286 103,973 108,963
2017-18 61,914 61,400 83,137 87,524 106,954 114,158
Totals 231,588 228,689 315,442 325,038 409,223 426,465
Difference +$2,899 -$9,596 -$17,242

So if the board’s schedule is adopted, the bulk of teachers in District 86 would have a strong incentive to find another place to teach—the longer they stay, the more money they lose compared to their old schedule, not to mention the schedules of every other high school district in the area.  Yes, they would still be ahead (in the short term) of high schools in unit districts (like Naperville or Indian Prairie), but Lyons, Downers Grove, Willowbrook, and even Rick Skoda’s old school (Morton) would offer signficantly better pay.  Oh, and so would Stevenson, New Trier, Glenbard, Glenbrook, Libertyville, Mundelein, Highland Park, Schaumburg, Hersey, Wheeling, Arlington Heights, Proviso, Niles, Leyden, Homewood-Flossmoor, Reavis, Oak Lawn, Lake Forest…well, you get the idea. As you see from the chart above, every year the board’s new 35-step schedule goes on, the larger the pay differential would become.  And it gets even worse the more education the teacher has.

And that’s not even taking into account the additional insurance payments the teachers will have to make under either proposal.  From a monetary perspective, the teachers’ proposal has already made significant concessions and is a large step in the board’s direction.  The board proposal, on the other hand, gives the teachers virtually nothing compared to their previous contract and will definitely lead to a district that offers significantly less salary than all other high school districts in the area.

Finally, any monetary analysis has to take into consideration what the school district in question can afford.  District 86 is in excellent financial shape, beginning the current fiscal year with over $22,000,000 in reserves, despite the board’s refusal to increase its levy by that which the law allowed (1.7%).  Knowing it was limiting its revenue in advance of contract negotiations and then claiming that it can’t afford to give its teachers a modest raise would lead many to the conclusion that this board is intent on “winning” this negotiations to the point where it severely weakens the teachers union.  As a veteran of many contract negotiations, I would never recommend the board’s proposal to my teachers, especially given the significant concessions already included in the teachers’ offer.

As the possibility of job action by the teachers moves closer, it’s clear from the financial side of the proposals that the board can either graciously accept the teachers’ proposal to minimize the considerable damage already done to District 86’s reputation, or brace for an ugly strike.

Next time, we’ll look at the items in the proposals that don’t involve cash.  If you would like to learn more about how unions and school boards interact, check out James Crandell’s eBook, Snowflake Schools, excerpts of which can be found at http://www.snowflake-schools.com/snowflake-schools-the-book.html.

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3 comments

  1. Pingback: Comparing the Proposals: What to Do? |
  2. Pingback: Comparing the Proposals: Language |
  3. John Czerwiec

    James:

    I really like your honest analysis. It is also helpful to remember that there are lots of folks that find appeal in the sorts of easy slogans like “cut government spending” without considering the necessity of dealing with the realities that would come from really changing things.

    For instance, there are lots of people that look at the average wages and benefits of teachers, which in affluent communities are overwhelming supported by property taxes, and respond with not just the hard-to-argue “that is unsustainable” but will go farther and state bluntly “they are overpaid”. To be fair one should look at more detailed analysis that are available — http://www.washingtonpost.com/news/volokh-conspiracy/wp/2014/02/07/are-public-sector-employees-overpaid/ Even if one includes a lengthy analysis of hours worked / flexibility / work environment it is probably fair to say that teachers working in public schools in affluent areas receive considerably greater compensation and benefits than the most similar teachers working in private schools.

    In the context of disputes about contract negotiations the question then becomes what is a realistic way forward.

    I would argue that there are just a few paths. The path suggested initially by the D86 majority, of abandoning the traditional schedule of annual increases and opportunities to advance one’s career through additional coursework, holds appeal on a simplistic level — folks in nearly all private sector employment have had to face this sort of stagnation for many years now.
    The counter argument is that the mobility of talented private sector workers, and even opportunity for entrepreneurial employment, is drastically different than the highly regulated environment that public schools operate in. Persumably the challenge of being so far outside the mainstream was what forced the D86 to abandon this fantasy.
    Another way forward that is perhaps described as “business as usual” ,and for many people that includes anything that essentially relies on “baseline budgeting” where the assumption is that annual increases are inevitable. Unfortunately even many otherwise reasonable, moderate, fiscally savvy people see this as too dissimilar to the realities that folks have had to deal with in the wake of the financial melt down precipitated by the collapse of subprime lending in autumn of ’08 — teachers in our area really have not seen any meaningful declines in take home pay, while many bright highly compensated folks in the private sector have indeed seen things turn for the worse.
    Between these two paths there would seem to a range of concessions that I believe could be part of a set of creative solutions to both the crisis in pension funding and the seemingly endless reliance on ever increasing wages / property taxes — sadly it may not be feasible to archive any such changes in the current polarized legislative environment. Solutions that would treat higher paid employees more like is done for “executive compensation plans” in the private sector where annuities and other delayed compensation are beneficial to both the recipient and payer would probably need some incentives beyond the corporate and personal income tax advantages in the private sector because government units are not “profit making” — perhaps for affluent districts the legislation could be based on measures of financial health or something similar that would reward districts with a more long term focus with freedom from onerous state requirements. Another approach might be some sort of “carrot and stick” of local income taxes that target specific income levels with a more graduated / granular tax than the current flat rate of Illinois. That approach would of course need changes to the Illinois constitution, an option that the Democrats that control Illinois have vehemently opposed…

    I know there are many teachers that consider themselves “fiscally conservative” and certainly do not wish to see their own property taxes rise continually. There also many teachers that sympathize with the challenges of neighbors in the private sector that have seen their incomes decline/ stagnate for an extended period. Breaking out of the cycle of overly partisan legislative action that further drives a wedge between teachers and the broader community seems not to have been a concern at all of the D86 majority and I fear the divisiveness they’ve fostered will not really help in either making meaningful changes to the burden felt by local property owners NOR giving people incentives to understand the core issues that need to be solved to fix fundamental problems in how public sector employee pensions are funded.

    Perhaps the worst aspect of the current struggle in D86 is the inherent lack of logic in the BOE’s approach — in the face of crowded meetings and petitions that have quickly garnered hordes of signatures they claim there is not broad support for the teachers. Instead of being a collection of community members of modest incomes, the majority seems to have benefited from unusual combinations of large guaranteed income, rich compensation from executive / ownership stakes in firms and /or generational wealth. In contrast, even the most senior of the teachers across the negotiating table very likely are closer philosophically to the majority of the community members with more typical financial concerns. Folks of more mainstream views that have a better understanding of the frustrations inherent in true negotiations are more suited to the elective office that the extremist ideologues that managed to gain office on their crypto-ticket…

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