Labor Benefit Costs Choking MPS

Do you wonder why school districts spend so much money?

Last Tuesday night, the school board for Milwaukee’s Public Schools considered a plan to create a “cohort,” a cluster of schools on Milwaukee’s north side to cooperate on a voluntary basis to share resources. The goal was to protect Robert M. LaFollette Elementary School which was on the chopping block because of declining enrollment.

Director Annie Woodward added two more schools to the cohort in the motion to approve. Director Jeff Spence said he was concerned they were running the risk of making a poorer district within the larger school district because the board did not want to make hard decisions.

Board President Michael Bonds replied that this plan showed that the district was willing to fight for the kids in this district. He said that other schools have even lower enrollment than LaFollette, and the passion of the parents in this area is the kind of input the district wants to have.  Bonds also said there was the student population within the area to support the school.

Milwaukee Superintendent William Andrekopoulos replied that the two schools that are smaller are charter schools. After the plan passed 6-2, Andrekopoulos said to the Board they may have to revisit the idea of closing LaFollette later.

Then Andrekopoulos said why: the benefit rate for MPS is now 77%.

The benefit rate is calculated by figuring out the ratio of fringe benefits to the hourly compensation or salary. For example, the average hourly rate for a high school principal in 2009 was $54.71, the fringe benefits were $32.94, so the benefit rate was 60%

Even if the other schools in the district “protect” Robert M. LaFollette by sharing resources such as music and art specialists, the economics of running a school district may force the district to consider closing the school.

As Andrekopoulos would say to the Board later, the schools are where the money is.  (Funny, Andrekopoulos doesn’t look like the bank robber Willie Sutton.)

Later that evening at the committee meeting on strategic planning and budget, the school district considered a plan to try to control costs by recentralizing some personnel decision-making.  Bonds asked the staff during the presentation whether the plan would result in layoffs or the elimination of jobs.

Andrekopoulos took advantage of the “recentralization” discussion to address some broader concerns. He reminded the board of the 77% benefit rate. He then said, “You want all of these things, you are going to have to close schools.”

He also said, “You don’t like to have conversations about laying people off, and you don’t like conversations about outsourcing, but you only have so much money.”

Making smaller districts is not a new idea, and it may even be a good idea. State Representative Leah Vukmir and State Senator Ted Kanavas have proposed the idea at the state legislature of breaking MPS into smaller, more governable districts.

However, the plan of creating a cohort on Milwaukee’s north side was not about improving academic standards and student output. The plan was about protecting a school from closure despite so many parents in the area making a decision to send their kids elsewhere to the point where the school is no longer sustainable.

When a school district is confronted with a benefit rate of 77%, on the same evening when they are told that the five worst schools in the state are all within the district, and the reaction they have to a plan to try to control costs is to ask whether any school secretaries will be laid off, the formula for the taxpayers is higher taxes and more spending.

By James Wigderson
Special Perspective for the MacIver Institute