Saturday, February 23, 2008

Olentangy Levy: the simple solution

Public school districts in Ohio must file a Five-Year Financial Forecast [1]with the state department of education each October, with an update in May. This forecast lists revenue and expenditures for the current fiscal year, as well as the next four fiscal years. In addition, the district must list the assumptions used to create the forecast.

Fair enough.

So, the district files its forecast in October 2007 stating that it will have a $2 million deficit at the end of FY09. The assumptions show that the assumed increase in base salaries is $1.93 million. On top of that, the district pays an additional 14% of employee salaries to the state retirement systems. This means that the increased salaries also increase the district's employee retirement contribution by $270,000. Therefore, the total cost for FY09 salary increases is more than the FY09 deficit. Got that?

So, negotiating a zero percent salary increase clears the deficit. [2]

Isn't that onerous? Not really. Keep in mind that teachers will still see an average increase for next year of 3.7%, based on step and education increases. Given that an average salary increase of 3.7% is above the standard for the private sector, and given that the district assumes it will fund an additional 12% of employee insurance costs -- well above the private sector, it's obvious that a levy failure and the implementation of this simply plan will keep things business as usual; not the catastrophe that the superintendent claims it is.

A simple solution.


[1] The district's Five-Year Financial Forecast is here.
[2] Or, the district could control healthcare costs and still provide a salary increase, in addition to the step and education increases.


Anonymous said...

Great string of posts, Jim. I hope that you can work with the local media to get some of these facts more out in the open. The district is presenting facts, but only those that back up their case. They seem to be holding back a bit on the analysis of the numbers. Again, great job. Scott

Anonymous said...

I urge everyone to review the 5 Year Financial Forecast. I just spent an hour calculating forcasted percentage cost increases in several key areas and I found some to be "interesting."

For example, when I calculate cost per student, using 2008 expenses (line 4.5) divided by 2008 total enrollment(students)it equals - $9,027. This number differs from the OFK figure of $8,507.

However, that revised amount is still lower than our nieghboring districts, according to state records.

The biggest areas of concern are Salary Increases, Health Care Cost / Increases, and Supplies Costs.

As a "wealthy district" where internet access has a high likelihood of penetration in every home, why can't the district implement a "green initiative" and eliminate the amount of paper documents that are sent home every week? They have the infrastructure to do it...

Anonymous said...

Teachers continue to be underpaid in comparison to most other professions. We are often disrespected and looked down upon by other professionals. The general public take not only teachers, but also education, for granted. Even with a yearly raise, the amount of time teachers put into their jobs outside of the normal work day is not compensated. Please do not bring up our "free summers." We spend our summers preparing for the following school year or taking courses so we can renew our license. The raise teachers receive for furthering their education is very minimal and does not compare to the debt they've created from taking college courses or attending pricey workshops. Most professionals receive overtime pay and/or annual bonuses. If the solution to a deficit is to cut salaries and decrease benefit payments, you can guarantee the hard-working, dedicated teachers the school system is used to will be no more. Teachers are hard-working professionals. We go the extra mile because of our genuine love for children and education. Why are we the enemies???

Jim Fedako said...

I think the past few years have shown that a number of teachers in Olentangy are evil. These are folks that want to put filth in the minds of all parents.

I will assume that you are not one of them. Yet, I will assume that you also kept quiet. And will keep quiet.

Of course, to condemn a group of INDIVIDUALS such as teachers is wrong -- I say it's kind of like saying nurses are the evil (an absolutely false statement).

But, collectively, teachers are unionized. And, your unions are evil. Plain and simple.

As far as complaining about licensure requirements, etc.: Your unions fight for these so that the pool of available employees are limited. Folks have no idea the power that the unions have at the statehouse.

Also, you can strike. And, from what I have seen, striking teachers are not the caring individuals you claim they are in the classroom.

As far as salaries, no one deserves a fair wage -- as a fair wage is undefinable outside the market. No one deserves guaranteed employment either. Yet, your unions seek the vary same.

And, you salaries are paid by everyone in the district. Your increase means that the child on the margin with go without dinner, a doctor's visit, etc.

The unions never address that part of the puzzle. They simply assume that scarcity doesn't exist, or, worse, they look at the seniors working extra jobs to make tax payments and think, "Let them eat cake."

The solution: Let the market guide teacher salaries. Then, you will know that your salary in competitive and commensurate for the work performed.

Hiding behind unions and demanding salary increases at the expense of all others is not the right thing to do.