By Christian D'Andrea
MacIver Institute Education Policy Analyst
Part three in a series
Earlier, we covered the total savings that school districts stand to save from concessions in their latest employee contracts. We've also covered how big a role selective buying plays when it comes to saving money when shopping for teacher health insurance. Here, we examine one outlier in Wisconsin's educaton landscape.
Milwaukee Public Schools (MPS) are the most embattled and arguably the most dysfunctional entity throughout the state’s educational system. Currently, the district is facing major layoffs due to the combination of both budget cuts and the expiration of one-time Federal stimulus funding. One recent report suggests that the district is $82 million in the hole, and that they’ll have to cut staff just to stay afloat.
However, many of these upcoming layoffs could have been prevented.
Milwaukee’s public school teachers inked a new contract in 2010, ratifying the extension weeks after Scott Walker was elected Governor. The agreement was a four-year pact, which was the longest contract in MPS history. It covers the prior 2009-2010 school year and extends to 2012-2013.
This contract included concessions that would save $94 million in funding over the next two schools years. It also included a groundbreaking concession for the district’s staff – a payment of two percent of each employee’s health care costs. There was no contribution to teacher retirement systems at all.
Milwaukee wasn’t the only district to ratify a new contract or extension before the budget bill was passed, but it is one of the few that failed to take any of the cost saving measures into account. After the increased contributions were announced, many Wisconsin school boards rushed to negotiate their own staff contracts before being legally obligated to play by the state’s new rules. These districts included La Crosse, Wausau, Oshkosh, Superior, and several others that approved contracts by the end of March 2011.
However, the key difference between these districts and Milwaukee is that even though their contracts were signed before the budget bill passed, they still included the debated contributions to teacher benefits. A 5.8 percent salary payment towards teacher pensions (which was matched by the state) and a payment of 12.6 percent of their health insurance premiums, along with wage freezes in many cases, were the norm throughout the list of contracts that had been updated between January and March of this year. Almost all districts included pension payments, and all included significant increases in health care contributions.
But that did not happen at MPS and now hundreds of teachers and other employees in the district have been sent layoff notices.
Milwaukee, having ratified their contract months earlier, did not update their contracts to reflect any additional savings. Throughout the course of the budget debate, the teachers held strong to their commitment to the four-year deal they had signed in November.
Despite MPS Superintendent Gregory Thornton’s request to reopen the contract in order to save jobs, MTEA President Bob Peterson has strongly suggested that the district has no intention of amending the current contract. As a result, 519 layoff notices will hang over Milwaukee Public Schools this summer.
There’s still time for the district to reopen negotiations on the already-completed contract. Milwaukee will have until late September to make moves that could retain over 200 teachers for the 2011-2012 school year. If the district can adhere to the staff contributions that have saved hundreds of millions of dollars statewide, they’ll be able to bring back a large part of their young corps of teachers. Based on our earlier estimate of a savings of $517.12 per student, Milwaukee would be able to save at least $41 million through increased contributions alone. These savings, which is a conservative estimate, still would be unlikely to close the city's budget gap, but they would spare the jobs of hundreds of teachers.
So a solution exists that would save hundreds of jobs and keep teachers in MPS classrooms. Unfortunately, it appears that the union's decision regarding the final two years of Milwaukee’s teaching contract is set in stone. Fortunately other districts are finding the tools provided by Act 10 are potentially helping them save hundreds of millions of dollars and hundreds of young teachers' jobs.