School Costs Woes

Author: John Lukach    Posted: April 4, 2014

Over the years school department costs for salaries and special education (SPED) have increased much faster than the revenues available to the town. They continue to be the primary cause of the town’s chronic budget problems, which are now motivating a campaign for an operating budget override. This article shows how fast these costs have risen, and how little school officials have done to manage these costs.

On March 18th, 2014, I presented the following information at the Shrewsbury Board of Selectmen Public Hearing, relative to the problems caused by these unsustainable cost increases for salaries and SPED. Sections marked [Update] discuss subsequent school officials’ remarks in response, followed by my comments.

SCHOOL DEPARTMENT SALARIES

1) Historically, in most years salary increases have been the biggest cost driver in the school budget. The following chart shows teachers’ total salaries and the average salary for each year, and is taken from the State Department of Education (DOE) website – http://profiles.doe.mass.edu/profiles/teacher.aspx?orgcode=02710000&orgtypecode=5&

School District FY Total               Salaries Total          Teachers Average Salary
SHREWSBURY 2004 18,340,025 338.0 54,260
SHREWSBURY 2005 20,554,549 378.4 54,320
SHREWSBURY 2006 21,037,926 366.2 57,449
SHREWSBURY 2007 20,487,515 365.7 56,027
SHREWSBURY 2008 22,112,131 363.0 60,915
SHREWSBURY 2009 23,592,434 369.5 63,843
SHREWSBURY 2010 24,694,434 369.2 66,886
SHREWSBURY 2011 25,523,984 351.9 72,532
SHREWSBURY 2012 27,199,684 378.0 71,957

Key Points from the Chart:

– The 8 Year increase in Total Salaries was $8.9 Million, a 48% increase over a period that included the great recession, when incomes in most other professions were either flat or had declined.

– This chart shows that the average teacher salary in 2012 was $71,957, almost $3,000 higher than the number presented by the school department at a February 26 public hearing. (See Shrewsbury Teacher Salaries, page 8, at http://schools.shrewsbury-ma.gov/egov/docs/1394030021_370056.pdf .)

2) Teachers’ annual salary step increases are too generous. For example, in the Salary Tables in the new teachers’ contract, starting teachers in Step 1 with only a Bachelor’s degree make $43,224 this year. In 12 years their salaries will go up to $74,426, a 72% increase, and that is BEFORE any Cost of Living Adjustments (COLA’s) that will be negotiated over that period of time, and BEFORE any increases resulting from attainment of advanced degrees. In what other profession can a person expect such increases, unless their responsibilities also increase substantially? I certainly don’t know of any.

3) The school department claims that the salary increases it negotiated in the new teachers’ contract are ‘modest’ because the annual cost of living allowances are small, but the total salary increases are NOT modest when both COLA’s and step increases are considered. The new contract continues the old step scales with only one minor change. By continuing these step scales, it significantly increases costs in the current year school budget and for the length of the contract. Evidently the School Committee considers that the step increases in a prior contract are essentially entitlements that are non-negotiable, except for minor tweaking like the new 13th step.

School officials also state that teachers got no COLA increase this year in the new contract. That is true, but it is also true that teachers did receive a small 0.25% COLA increase this year. How is that possible? Because this 0.25% COLA increase was inserted into the LAST teachers’ contract, an unusual arrangement, to say the least!

4) Public school teachers say that their salaries must be ‘fair’, but their definition of fairness is very narrow – they only want to compare themselves to public school teachers in the school districts they choose to be compared with.

But average Shrewsbury teacher salaries:

a) should be compared with the salaries of those in similar professions and fields, which are lower.

b) should be compared with median incomes of single-earners in Massachusetts, which are lower by a significant amount

c) should be looked at in the context of an economic environment that is still struggling with the effects of the great recession.

Looked at in these or most other contexts, teacher salaries have gone up too fast, and continuing these rates of annual increases are not sustainable.

The selectmen’s primary concern should be FAIRNESS to the average taxpayers who pay these teacher salaries!

[Update: At the hearing school officials responded to my comments. On the need to make permanent changes in step scales that would reduce annual school budget increases, they first responded as if I had been saying that step scales should be completely eliminated, which was untrue. Then the superintendent gave an example of an extreme modification of the step scales that could result in a mass exodus of experienced teachers. But again, I did not suggest such an extreme change. Clearly, by using these extreme examples to distort my proposal, school officials show that they do not want to have serious discussions about modifications in the step scales that would significantly reduce the growth rate of teacher salaries.]

SPECIAL EDUCATION COSTS

The following historical chart shows Shrewsbury’s Direct Special Education (SPED) Costs as a percentage of the annual school budgets, compared to the state average. Source: FY2013 School Budget Package and Dept. of Education website.

Shrewsbury   SPED $   Shrewsbury   State Avg.             Variance %

FY             In Millions       SPED %    SPED %           Better/(Worse)

2001          4.3                         13.7                 17.2                 3.5

2002          5.4                         16.4                 17.4                  1.0

2003          5.6                         15.6                 17.7                  2.1

2004          7.1                         17.9                 18.6                  0.7

2005         8.1                         18.5                 18.9                  0.4

2006          8.8                         19.3                 19.1                (0.2)

2007         9.4                         19.9                 19.4                (0.5)

2008        11.6                         22.4                 19.8                (2.6)

2009       13.5                         25.6                 20.1                (5.5)

2010        13.0                         23.7                 20.0                (3.7)

2011        13.9                         24.6                 19.9                (4.7)

2012       14.7                         24.6                 20.6                (4.0)

Thus while the state average percent for direct SPED costs increased from 17.2% in 2001 to 20.6% in 2012, Shrewsbury’s percentage increased much faster, from 13.7% to 24.6% over the same period! These excessive SPED costs have meant fewer resources available to regular education programs and students.

But why have Shrewsbury’s direct special education costs as a percentage of the school budget increased so much faster than the state average? You would think that the school department would have analyzed this situation, identified at least a few of the causes, and taken steps to reduce the rate of increase. But you would be wrong. To my knowledge the school department has never tried to determine why Shrewsbury’s SPED costs went from a much lower percentage to a much higher percentage compared to the state average.

I said that one likely reason was the inclusionary policies the school department implemented about 12 years ago. Why? Well, those policies specified a higher ratio of regular education students to SPED students in pre-school and Kindergarten, compared to many other towns. This made Shrewsbury more attractive to parents with a special needs child who were moving to this area. But whatever the reasons, the school department should have determined the reasons for the sharp increases in SPED costs and developed a plan to bring them more in line with the state average. Doing so would free up resources for other school needs.

[Update: School officials responded to my comments on rising SPED costs at the hearing, but they failed to rebut my key points, namely, that Shrewsbury’s direct SPED costs have risen much faster as a percent of total spending than the state average, that they have shown almost no interest in examining the reasons for this dramatic increase, and that part of the reason is probably some of the school department’s policies. Rather than address the message, the superintendent delivered a personal attack on the messenger, calling my comments reprehensible. But it is the superintendent’s personal attack on me that was reprehensible and unprofessional. And it is his continued refusal to address an obvious issue that points to a management problem in the school department.]

Conclusions:

1) The two cost areas that have historically shown the biggest increases in annual school budgets – salaries and SPED costs – are the two areas that school officials have refused to address in any substantive way so as to reduce significantly the growth in annual cost increases. This is poor management.

2) And rather than insist that the School Committee address these cost issues, the selectmen have decided that it is easier to try to scare residents into voting for an operational budget override. This is NOT leadership.