By Christian D'Andrea
MacIver Institute Education Policy Analyst
On Thursday, the Milwaukee Public Schools School Board will take some of their first significant actions in addressing their 2012-2013 budget. After approving over $976 million to be spent in the coming year and potentially saving 75 jobs slated for layoffs, the district will look at new employee programs to move in a direction that will divert more money to the classroom rather than employee benefits.
Thursday's meeting will be a hefty one. It will tackle issues like renewing instrumentality charter schools like Community High School and reporting on data from the city's Parental Dispute Resolution System. However, the biggest items on the agenda will all deal with how money is allocated within the district in 2012-2013. While many general fund decisions were agreed on earlier in the month, tomorrow's agenda will begin the process of putting that funding to work.
The district has plenty of ground to cover in order to address the reduction in state funding in the 2011-2013 Wisconsin budget. Other districts in the state have been able to make up for these shortfalls by using the tools of Act 10. These allow school boards to require contributions from staff members for benefits like health care and pension plans. Act 10 also removes collective bargaining between the state and public sector unions for all matters unrelated to salary increases tied to inflation.
MPS and the Milwaukee Teachers Education Association chose to stick to the contract they signed in 2010, which is outside the scope of the new reforms. However, it also prevents them from benefitting from the savings that employee contributions would have given them - savings that are estimated between $40-50 million each year. As a result, the district has had to work to balance their budget. While MPS will find some wiggle room through changing their third-party health insurer, they still have to take other steps to produce modest savings in light of their inability to use the state's recommended employee contributions.
The agenda for Thursday's meeting includes some of the measures that MPS will take in 2012-2013. This includes reining in benefits to part-time employees. The district's action list is frank about the costs of non-salary benefits and their effect on taking funding from the classroom:
"One of the district's largest cost drivers is providing employee benefits, specifically health cafe [sic]," according to district documents, "which continues to increase two to three times greater than the general rate of inflation."
However, because of the union's recalcitrance, the district is limited in its scope of asking full time staff members for contributions thanks to their 2010 contract. Therefore, this benefit reform will impact only part-time employees. Specifically, the bar for health insurance eligibility will be raised from 20 hours per week to 30. To adjust for this switch, current employees that fall short of that mark will be grandfathered in for an additional year of benefits with the hopes that these team members will be able to transition to qualifying positions.
This could be a look into what 2013 may hold for the district when their teachers' contract expires. MPS, unable to approach teachers and administrators for concessions to balance their budget, is instead relying on reform amongst their part-time employees. Is this the start of benefit reform that could provide a financial boost to the struggling district in time for the 2013-2014 school year?
Tomorrow's action items will also include the creation of a new protocol for limited-time employee (LTE) hires. These positions would be introduced in order to deal with a rising rate of retirements within the district. While some of these retirements may be related to the stress and strife related to the state's recent budget process, it is also important to note that 41 percent of the district's workforce is aged 50 or older. According to MPS's documents, that rate is considerably higher than the national average of 26 percent.
These LTE positions would come with a lower pay and considerably less benefits than the open positions that they are replacing through retirement. The theory behind these new positions is that they will allow new employees to enter the workforce and work their way up to better positions. Many of these slots would also be filled by recent retirees who want to continue working with the district on a part-time basis and who also would not be discouraged by the limited benefit structure thanks to the retirement benefits that they already receive. Employees with LTE tags would be considered for better positions down the road, but would also be subject to being terminated from their jobs at will.
Elsewhere, the district will vote to approve payments to vendors. This includes payments to tech firms like Hewlett-Packard and Apple Computers, educational staples like World Book, Scholastic, and Follett, and local educating authorities like the Milwaukee Area Technical College. The specifics of the services rendered by these contracts weren't clearly defined in the district's agenda.
While Milwaukee won't be able to make any sweeping changes in 2012 thanks to their overarching contract and lack of political will, they'll be able to take some steps that will provide financial relief. These steps may also provide a rough guide for what we may be able to expect next year when their current contract expires.
Milwaukee Public Schools have had a difficult path to travel in the past two years thanks to a combination of expiring Stimulus funds, a tight 2011-2013 state budget, and a teachers' union that has refused to back down from its original contract in order to make concessions that could save tens of millions of dollars. Tomorrow's school board meeting will take another step down that path, and depending on how the district votes, it could either be stepping further into the darkness or inching, ever so slowly, towards the light.