Tuesday, March 22, 2011

School Budget Deficit

The Express-Times has an article and accompanying poll on the current budget deficit facing the school (read it here).

In the article it notes that the NASD is anticipating with state cuts they will be $2M short. To make up the first million they are looking to cut eight positions for a savings of roughly $800,000 (note this is salary plus cost of benefits).

The article also notes the NASD is asking teachers, custodians and staff to accept a one year salary freeze.

And, it states a new health care plan will result in an employee contribution of 12.5%, then 25%, then 37.5% and finally in year four 50% of plan costs.

The last item surprises me the most. I’m very surprised that the teachers union would agree to this plan. Yes, it is inline with what I’ve seen  at some companies, but it is a huge change from past practice were there was little to no contribution from the employees. The benefits coupled with the 180 day work year are the reason the salaries appeared to be ‘small’ (ie starting teacher salary roughly $40-45,000 range).

This change may be larger than some realize. A typical family healthcare plan probably runs about $1400 per month, depending on the deductible. A single plan would obviously be lower. I also hope that they have offered high-deductible plans for younger, single employees, who rarely need to use the plan.

That being said, the NASD is going to have to take a hard look at its spending and will probably need to do so on a more granular level.

Posted via email from Ross Nunamaker


Clem said...

Having read the story, it appears we are faced with meatball surgery as the solution. Just dump instructors and blame it on the janitor, because the superintendent (and his irresponsible enablers on what passes for a school board) thought the jersey influx and the state/federal gravy train would never end.

The kids and their taxpaying parents are entitled to reasonable class sizes. After all, the taxpayers created the school district to serve and fulfill the needs of the community, not the other way around.

Increased class sizes and eliminating instructors wouldn't even be on the radar, had we not overpaid for everything for so many years. Where are the admin cuts, and perhaps a rollback of the egregious increases awarded in the two contracts of the jersey goldrush? Where is the "Solidarity" now? Watch the union cannibalize as those with seniority throw their "brothers" under the bus, in lieu of shared sacrifice and recognition of the ill-advised greed of the past.

The staff reduction/tax hike/temporary freeze combo is a simple and superficial band-aid for systemic failure. We are paying an awful lot of money (because, we are told, we must to attract and retain such brilliance) for some pretty minor league performance here, don't you think?

Wayne said...

Ross, I believe those %'s apply to increases in the cost of healthcare not the entire cost. I was there, I don't think the ET reporter has it worded correctly in her article.

NewsOverCoffee said...

Agree with Clem, what happens next year? We opt to slash a chunk here and there, but what we really need to do is evaluate how we are approaching education and what impact that has on costs.

Unfortunately, we've created a lot of sunk costs such as the new building, debt, and additional admin via new building. So we have to be even more creative with how we reduce costs while improving education.

To Wayne, if that is the case it is a huge difference. 50% of $1400 versus maybe 50% of a $100 increase while paying 1-2%. I can see the union accepting that deal to keep the very small employee contribution.

The Battle Cry of Freedom said...

Wayne is correct in his statement. Want to see Nazareth's future note that Easton, Bethlehem and Bangor are not only laying off staff, they are getting rid of all day kindergarten, done strictly for working moms, and Bangor is removing block scheduling. Why are they doing that. Methinks it is too expensive. As to class size show me the study that tells me why 25 students is the magic number. Sec of Ed, Arne Duncan doesn't believe that.