Manatee schools have waited too long to act. Now circumstances are forcing their hand.
The district finds itself in the same situation as many other school districts in Florida, including Sarasota’s — struggling with a long-term decline in funding from real estate while saddled with well-paid employees given exceptionally generous benefits packages.
And until now, teachers specifically have not felt the pain almost every other sector of Manatee County’s economy has — including other local governments.
Teachers are an important part of society, but they live in a community that is really struggling and they should not expect to be exempted. Change probably should have happened three years ago.
The problem is that the district pursued a misguided strategy on teacher pay that now must stop. There remains one major obstacle, however. Everyone say it together now: the public sector union.
A little history. First, the district discovered that it had the lowest salary structure in the region. Taking its cue from conventional wisdom, leadership chose to shovel mountains of money at teachers with the goal of having the highest teacher pay in the region — which would be a trick considering Sarasota is in the region.
Nonetheless, the starting salary for a Manatee County teacher with the minimum education rocketed up 36% between 2004 and 2010 — averaging a whopping 6% annually, even though the recession that was causing thousands of job losses and pay reductions.
The defense is always that it was all about improving education, that it is for the children. But that’s not really the case, and never is in these situations. It’s for the union members’ salaries. The argument, of course, is that by paying more, you attract and retain better teachers.
That is a bit of a canard. All Florida school systems are operating in the same economy, and almost no one is hiring. Many districts laid off and/or did not fill openings in recent years. So the market for job-seekers is weak, to say the least. They won’t be just lured to another Florida district. So maybe the better pay in other states would lure our best teachers?
Let’s say there is a 10% pay differential between Manatee County and Illinois or Pennsylvania or Maryland. Would a teacher who has been in Manatee for several years, has a home and maybe children with friends, really pack up everything to go from $50,000 per year to $55,000? Oh, and all those states have state income taxes, so it would be even less difference. The question answers itself.
Without the ability to pay more to the best teachers and fire the worst — such as the merit pay bill the governor just signed into law — such overall pay-raise schemes are little more than a transfer of community wealth to unionized government workers who happen to be teachers. The system ensures that all of the worst teachers keep getting pay raises and enormously generous benefits. That’s helping students?
Another question that answers itself.
Further, data correlates student demographics to student achievement far more than teacher pay to student achievement.
The district, now at a crisis point, finally realizes things must change. First, the Manatee County School District is self-insured. Its insurance fund has been losing increasing amounts of money for four consecutive years and will keep losing money well into the future. Healthcare costs have been soaring, but not public employee contributions. Taxpayers keep subsidizing them.
The district is asking, reasonably enough, that employee contributions be “sufficient to ensure compliance with Florida laws.” Remember, the school district is self-insured. There is only one way to get more money
into the fund so it has the money to pay for health care — raise premiums. It’s not rocket science.
Further forcing the district hand is that its contingency fund — the rainy-day pot of money — is at the bare minimum required by state law. The district has drawn it down during the recession to keep pushing money to its employees — you know, so they would not flee to someplace that pays a lot more and is actually hiring.
So high pay, drained reserves and over-generous health insurance benefits have put the district on the brink. Its health fund is not actuarially sound and was criticized by the auditor general. The district must reign in teacher pay and benefits.
“The changes we are proposing is because of the new economy we are living in,” Superintendent Tim McGonegal told a special magistrate at a recent impasse hearing on contract talks. “The current situation is our new reality.”
The union is not exactly embracing this new reality, although it does seem to understand the district’s financial problems and is willing to budge a little more than some.
For instance, the union completely opposes opening up for negotiation in each contract the automatic annual pay increases known as “steps” — which cost the district $1.3 million annually. But in a nod to reality, it is willing to accept increases in employee contributions to healthcare plans, albeit at much smaller levels than the district says is necessary.
Steps have long been one of those sweet gifts for school employees. Each year a teacher is employed, she moves up a “step” to a higher pay level. And the entire step structure increases most years with what is reported as the pay increases.
But if the district institutes a pay freeze — which is unusual — and the media duly notes it, people think teachers did not get a pay raise. But indeed they did by moving up a step. Only if they are already at the top of the step structure would they not get a raise.
The contract issue is with the special magistrate now. Almost assuredly, either way she rules, the losing side will appeal. In Florida, the appeal goes to the School Board as the final arbiter of the contract. That is as it should be; those are the people answerable to the taxpaying, student-sending electorate. Unions simply represent their members, not the public and not students.
A committee of school district officials and residents has done great job putting together a list of possible cuts the district can make to balance a budget gap that will be between $10 million and $15 million this year.
Some of those non-personnel cuts make a great deal of sense, including:
• Selling the parent information building;
• Leasing the large, attractive mid-rise administrative center on the eastern edge of downtown;
• Closing and merging some underused schools with 8,000 empty desks.
The district has made $46 million in cuts in the past three years from a $644 million budget. Those included eliminating reading coaches and cuts to middle-school sports and field trips.
But the district would not have needed to make such deep cuts, or be facing such a budget shortfall for next year, if it had not given teachers such generous pay raises through the recession.
The School Board’s path is clear. It must step back from pushing money at teachers and reign in benefits to make the district whole. It also must look at making cuts that schools do not normally consider. Otherwise, it is abdicating its fiduciary responsibilities to the community.
HEALTH FUND WOES
The Manatee school district’s fiscal year health insurance fund balance.
Year Fund balance
06-30-06 $ 2.1 million
06-30-07 $-0.7 million
06-30-08 $-4.7 million
06-30-09 $-7.0 million
06-30-10 $-8.4 million
12-31-10 $-9.4 million
Source: Manatee County School District
Federal spending insanity
Billions, trillions … whatever comes next for the federal budget. It’s all quite beyond any of us to grasp the size of the wildly out-of-control spending train in Washington, D.C. Sometimes it seems like those folks don’t live in the same reality as the rest of us.
So we brought the numbers to the most local level — a family in Manatee County — to show the insanity of what has been going on and continues to go on with our future.
We took the median family income for Manatee County and showed what household spending would look like if it mirrored the federal government’s attitude toward spending. It tells a striking tale.
In the chart below, family “income” represents this year’s federal budget revenues; “spending” represents federal expenditures; “credit-card” debt represents the federal debt; and the tiny reductions Republicans are desperately trying to get through in the current year’s spending this year are “cuts.” The “new spending” level is what the ever-so-slightly improved mess would look like if Republicans prevail.
The result? If a Manatee family making $38,673 spent like the feds, it would spend $57,700 this year while carrying $232,038 in credit-card debt. Further, the more responsible spouse among the two — which is not saying much in our example — is trying to cut $975, so the family is only spending $56,725. But the other spouse is fighting that cut as unaffordable.
This is what is going on in Congress.
The Republicans are trying to cut $60 billion, which equates to that $975 for our family, and the Democrats and President Obama are fighting it at every step.
They are only up for a paltry $10 billion in cuts, which equates to $163 in our family budget. This is the context in which to listen to the Democrats calling proposed budget cuts “extreme.”
They can’t see to even slow the insanity, preferring to play re-election politics over the good of the nation.
The numbers make the case, and show why doing the right thing must get our support at the polls.
IF A FAMILY BUDGETED THE WAY CONGRESS SPENDS
Income Spending Credit card Cuts New spending
$38,673 $57,700 $232,038 $975 $56,725
Sources: U.S. GAO, U.S. Census Bureau, East County Observer