Anatomy of an "Historic" Public-Sector Pay "Freeze"

One of the reasons why local and state governments everywhere are broke is because they spend too much (yes, it's true).

Here's a concrete example that I'm sure is typical.

The Lakota School District is the second-largest district in Southwest Ohio. It serves about 19,000 students and has just completed a deal that "stipulate[s] two consecutive years of no across-the-board raises for its teachers. It also calls for teachers to pay more for health benefits."

Some relevant facts, supplied by the Cincinnati Enquirer:

The district is facing a $10 million deficit in 2012, despite having cut about $13 million in spending over the past two years. The contract just signed expires in June 2012.

"Since 2004, Lakota has seen four of its five operating tax ballot issues rejected by voters. The last one to win approval was in 2005."

"Teachers will increase their health-care costs in the first year to a 15 percent of the expense and to 20 percent in the second year. Teachers currently pay between 10 to 12 percent of the cost for health benefits."

The contract also suspends reimbursement for tuition if teachers go back to school for an advanced degree.

"Contractual 'step increases' are not affected by the contract but union officials said that 32 percent of the union’s members are not scheduled for step raises during the new contract. Step increases are based on individual teachers’ experience, certification and instructional."

"The average salary among teachers in the 1,190-member Lakota Education Association is $59,000. The statewide average is $55,600."

That's somewhat slim info, but let's break it down.

The taxpayers are slow to increase their tax rates, but not completely against it (one tax increase in the past several years, despite annual attempts to jack rates). There is yet another levy on the November ballot, which would cost about $242 per $100,000 of housing value. The increase will be in place for 10 years.

The district has cut 52 teaching positions over the past couple of years, out of about 1,243 (a 4 percent reduction) to start with, and threatens a "possible reduction of "130+ additional teachers and staff" if the new tax isn't passed, along with "massive" cuts to sports programs and "eliminating some" academic programs and reducing bus-service levels to "lowest levels allowed by the state." According to this, the district currently has a total of 1,725 FTEs, so cutting 130 from that would amount to about 8 percent of total staff.

"Step increases" aren't part of the freeze and based on what's above, fully 68 percent of faculty are in line for bumps upward. So that's a pretty mild frost.

Paying 20 percent for health benefits could represent up to a 100 percent jump from where some teachers are today. For those of you in the private and nonprofit sectors, what percentage of your health benefits are you paying? My experience, perhaps not typical, is 25 percent of the premium is paid by the employee, who then kicks in 50 percent for covered dependents.

Teachers will be expected to fund their own continuing edjumication for at least the next 24 months but, based on contractual "step increases," they will then get pay raises.

The teachers there are paid well compared to their counterparts. The district has consistently ranked in the highest performance category in Ohio yet spends less per pupil than the state average.

There's no mention of pension contributions. Ohio public-school teachers do not pay into Social Security but must contribute 10 percent of their salary to a retirement fund, which is matched by the state at between 12 percent to 15 percent (I've seen various numbers reported) in a defined-benefit plan.

According to this somewhat murky chart (which even comes with alt-text telling you to call the treasurer's office if you can't figure it), it looks as if "per-pupil income," the total money the school gets per student from the state, has risen from $2,331 in FY2000 to $3,325 in FY2008, a 43 percent increase.

Which is another way of saying that, compared to the private sector, the brave folks who crafted this "historic" agreement have yet to start seriously cutting. The overall budget for the school district is over $235 million, so cutting another $10 million from that budget, assuming all the cuts were coming in a single year, amounts to, what, 4 percent? Isn't it about time (or, more accurately, well past time) that schools start cutting sports budgets?

I'd say the teachers signing on to this contract is smart politics. They've consistently delivered a quality product relative to other districts and if they look good by "freezing" two years' worth of cost-of-living increases (but not "step increases"), they can lock in 10 years' worth of new tax revenue, all without cutting any sports (yay!) or any more teachers. Or administrators or janitors or anything.

The real question is whether voters will be tough enough to inflict the same discipline on the public-sector that the recession and general innovations in business have dealt to the private sector. Over the past two years for sure but also over the past 10, 20, or so years, we're all doing more with fewer workers. That's called increased productivity and it ultimately means individual workers get paid more (because they're worth it). What it shouldn't mean is that the public sector gets more overall. As my colleague Matt Welch is fond of pointing out, we take for granted increases in productivity and service in the private sector. There's no reason not to demand it in the public sector as well.

Take it away, Riff Randle, Vince Lombardi High, Class of '79:

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • classwarrior||

    "... it ultimately means individual workers get paid more (because they're worth it). "

    Really? The last three decades have seen steady increases in productivity but virtually no increases in real wages. Nick, as an agnostic you really should be more skeptical about market fundementalism.

  • cynical||

    Except it government, where the opposite occurred. So it all balances out.

  • ||

    Yeah, because believing in the efficacy of the market is just like unreconstructed evangelical Christianity. I mean the parallels are just so obvious now!

    The veil! It lifts from my eyes! I CAN SEE NOW, CLASSWARRIOR! I CAN FINALLY SEEEEEEEEEE!

  • classwarrior, simplified||

    Capitalism = root of all evil!

  • ||

    TRUTH IS ALWAYS SIMPLE ONCE YOU OPEN YOUR EYES!

  • The Gobbler||

    Why is there a Lakota school district in Ohio, given that the Lakota never lived there? That would be like having the Seminole district in New Jersey.

  • ||

    THE LIGHT, GOBBLER! CAN YOU NOT SEE THE LIGHT? THE POOR ARE THE ONLY VIRTUOUS!

  • ||

    Splitters

  • CrackertyAssCracker||

    you are racist for asking that question.

  • x,y||

    Fun fact* time:

    Lakota used to be a massive district. They divided into two, Lakota East and Lakota West. But those are just the names. The actual geographic distinction is North and South. The types of people who get their panties in a bunch over such things believed calling the schools North and South would highlight/exacerbate racial tensions. This, by the way, is in an overwhelmingly white area with no history of racial strife. So, East and West win the day.

    *Vague recollection that this is true.

  • creech||

    "Have yet to seriously start cutting?"
    These school board members are positively draconian compared to my local board. They approved 4% annual increases for next three years and didn't touch the auto step increases.
    Some slight reduction in bus service led to howls from parents, but so far they are holding the line. A pension crisis is looming thanks to gutless Republicans who changed the formula to favor teachers, public employees and - naturally, legislators - in 2002.
    I don't know if teachers can strike in Ohio, but they certainly can (and do) in Penna. Taxpayers will continue to be screwed until some school board stands up and takes a strike, hires permanent scabs, and withstands the ire of parents.

  • Jeffersonian||

    God, I miss the Ramones. How can it be that a generation that listened to them managed to vote in these shitbums?

  • Editor||

    "An historic"?

    This is America. Speak American. "A historic."

  • ||

    I endorse this view.

  • ||

    COME, BROTHER! SHED YOUR FALSE CONSCIOUSNESS LIKE I AND KNOW THE WORLD FOR TRUE!

  • Vermont Gun Owner||

    Actually can we just retire the word "historic" completely? Also the phrase "making history"?

  • Shannon Love||

    As it so happens, right now I am "making history" in the smallest room of my house.

  • ||

    Its actually kinda scary when you think about it.

    online-privacy.it.tc

  • ||

    I'm willing to endorse this view for money.

  • ||

    MONEY IS THE DEVIL'S SEMEN! GIVE IT ALL AWAY AND COME WITH ME TO COMMUNIST HEAVEN! THERE IS MARX REACHING OUT FOR YOU! WHY WILL YOU NOT TAKE HIS HAND?

  • Solanum||

    I'd highly advise against doing business with Russian anon-bots. Once they have their hooks into you, even Lemon Jones won't be able to help you.

  • kilroy||

    Ohio public-school teachers do not pay into Social Security

    Cocksuckers. Why can't everyone opt for this?

  • Rhywun||

    Yeah... WTF?

  • Invisible Finger||

    1725 FTE's for 19,000 students is about 400 FTE's too many.

    If there's one thing unions don't believe in, it's economies of scale.

  • ||

    FULL EMPLOYMENT FOR EVERYONE! IT IS ONLY FAIR FOR ANYONE WHO WANTS A JOB TO HAVE ONE!

  • ||

    I AM PERFECTED FOR I HAVE TOUCHED THE BEARD OF MARXGOD!

    FOLLOW ME! RUN! COME SEE, JERUSALEM!

  • ||

    Okay, please explain.

  • ||

    CLASSWARRIOR HAS SAVED ME. CLASSWARRIOR HAS SHOWN ME THE LIGHT! THE FALSE RELIGION OF THE MARKET IS A FALSE RELIGION THAT IS WORSHIPED BY FALSE RELIGIONEERS!

  • ||

    Oh, I see.

    I just had the sudden urge to send all of my money to the government.

  • ||

    DO NOT FIGHT YOUR URGES!

  • Solanum||

    SMEAR THE CHEESE! SAY THE NAME!

  • ||

    SETTLE DOWN, MS. OATLASH!

  • Mr. FIFY||

    MY HOVERCRAFT IS FULL OF EELS!

  • Raymond Luxury Yacht||

    It's pronounced "Throatwobbler Mangrove."

  • Adonisus||

    SQUATTING MONKEYS TELL NO LIES!!!!

  • Warty||

    I went to various schools in the Lakota district when I was a kid. Just before I moved away, they built two gigantic new fortress high schools, which were going to be called Lakota Ridge (I think) and Lakota Plains. Well, that caused an uproar among parents, because after all, would you want your darling schnugamuffin to go to the "plain" school? Good heavens, no! The high schools ended up being named Lakota East and Lakota West.

    Also, I have no idea why the district was named after a band of Souix.

  • x,y||

    Warthog, see my post above. Funny that we remember completely different things.

  • Warty||

    There are Plains and Ridge junior high schools now, so maybe they recycled the names after the idiocy died down, or maybe I'm remembering something completely different. Doesn't matter.

    My most vivid memory of Lakota is that my junior high was so overcrowded that the traffic in the hallways was only allowed to go in one direction. Liberty Junior School, I think it was called. What a fucking piece of shit place.

  • Smooth_L||

    I'm not so sure why you're so quick to dismiss the positive effects that athletics have on students. Do athletics have anything to do with outrageous defined-benefit plans? Probably not, but they can have a hell of an impact on the personal development of many students, which is really a paramount goal of education. Would you also therefore suggest that vouchers couldn't be used at private and parochial schools that have athletic programs?

  • ||

    ^^this^^, and most athletic programs have huge fund-raising apparatus that dramatically offset their economic impact to the schools' bottom lines. The largest impact today's sports have on school budgets are those associated with transportation to and from events and the stipends paid to those who coach the teams. Even with those costs in place, the benefit of athletics to those that participate far outweigh the cost to the school, and since any student can participate in extra-curricular events in this day and age, be it sports, band or academic (and even flag corp/drill for the fatties that couldn't make cheerleader), the access issue is a non-starter.

  • SIV||

    Siouian languages were spoken in Ohio.
    I don't think that has anything to do with it though. There are schools in that district named after archaeological culture phases: Hopewell, Adena, Woodland so they likely picked it as an Indian sounding name.There is a Lakota in Côte d'Ivoire and a Cherokee in Australia.

  • Spencer Smith||

    "Teachers will be expected to fund their own continuing edjumication for at least the next 24 months"

    Why didn't you just write education? really. I'm serious.

  • Adonisus||

    God, I love that movie. It was stupid, cheesy, plotless fluff....but its SO goddamn politically incorrect for our era.

    I mean, they BLEW UP THEIR HIGH SCHOOL! Can you IMAGINE the shit storm that would happen if you even attempted to do that in a film in today's market? The moral crusaders would have heart attacks! There'd be boycotts!

    .....The soundtrack wasn't too shabby, either.

  • Shannon Love||

    I wasn't a jock in high school and used to resent the attention and resources devoted to athletics but as I have gained more experience in the real world, I've changed my mind.

    I would argue that athletics is the only part of the educational world that prepares students for the real-world of business that most of us will spend our lives in. Athletics is the only part of the educational world that teaches children how to work in real teams (no contrived group history projects don't count.) Athletics is the only part of the educational world that teaches children to deal with failures and setbacks. Athletics is the only part of the educational world that teaches children how to keep working when they tired, in pain or just plain bored.

    Outside of academia, teamwork, persistence in the face of failure and the ability to work hard in adverse conditions with immediate reward mean more in the long run that a grasp of the intellectual fads of our childhood. Athletics alone instills those traits

    There is a lot of crap that could be cut out of "education" budgets before we think about scrapping athletics.

  • ||

    "Teachers will be expected to fund their own continuing edjumication for at least the next 24 months"

    In many places, taking more ed courses bumps you up to a higher salary schedule. So the district may well have been paying people to cost them more.

    It would be worth it if the courses and workshops made the teachers better. But research says it doesn't, and most teachers say it doesn't. Teachers do it because it's a sweet deal financially, or the state requires it.

  • Suprashoesweb||

GET REASON MAGAZINE

Get Reason's print or digital edition before it’s posted online

  • Video Game Nation: How gaming is making America freer – and more fun.
  • Matt Welch: How the left turned against free speech.
  • Nothing Left to Cut? Congress can’t live within their means.
  • And much more.

SUBSCRIBE

advertisement