The Most Expensive Teacher Contracts
Tuesday, August 09, 2011
Generous sick-day payouts, hidden salary increases, and other additional benefits boost the cost of teacher contracts across Rhode Island well above the simple cost of salaries and regular benefits, a GoLocalProv review of contracts shows.
In an effort to uncover which contracts have provisions that bump up the cost of a contract, GoLocalProv examined four key factors—factors that have been in the news in recent months. Those are—the annual number of sick days, how many unused sick days can be accumulated, step increases in salaries, and co-pays for health insurance. (See below charts.)
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Taxpayer advocates tell GoLocalProv that those costs have spiraled out of control. Anthony Carcieri, a former member of the East Providence School Committee, said that, for years, unions managed to get the most that they could out of contract negotiations while those at the other end of the table—namely, school committees—failed to look out for the best interests of taxpayers.
Bottom line? “It got to an unsustainable level,” Carcieri told GoLocalProv.
“The key cost is salary and benefits,” Carcieri added. “That’s why the schools are falling down … there’s no money. All the money is salary and benefits.”
Lisa Blais, an education consultant, said the rising costs of teacher contracts stems from step increases in salaries, hidden benefits like longevity pay, and health insurance for current employees and retirees, often with co-pays below market rates.
“Teacher contracts have been an adult entitlement system and we have long needed to strike a balance that serves the classrooms needs of students,” Blais said. “The contracts have taken up anywhere from 70 percent to 85 percent of an entire operating budget leaving little … to provide in the way of teaching tools, classroom tools, textbooks, technology.”
A spending or a revenue problem?
However, not everyone sees the costs as a problem. Marc Gursky, a prominent labor attorney, said so-called taxpayer advocates incorrectly frame the issue as a problem for middle-class taxpayers.
“The important question isn’t how much money middle class taxpayers are going to contribute to the cost of education,” Gursky said. “The question is how much is society going to contribute to the cost of education … too many rich people aren’t paying their fair share.”
In other words: “It’s a revenue problem, not a spending problem,” Gursky said.
East Providence showdown
Tensions over the cost of teacher contracts reached a boiling point several years ago in East Providence when the school committee implemented unilateral cuts to pay and benefits for teachers when their contract expired on October 31, 2008.
“We were the first to do something about it in East Providence,” said Carcieri.
The changes included: a 5 percent pay cut, a 20 percent co-pay on health insurance—where there had been none previously, and the elimination of cash bonuses for teachers who opted out of the health plan offered by the school district. Carcieri says all told the changes saved the district roughly $9 million—and he said they were critical to keeping the district financially solvent.
Gursky, who was not directly involved the long court battle that ensued, questions just how effective the school committee was in saving money since it racked up approximately $1.3 million in legal fees defending its actions. Plus, in focusing on the costs, he says the school committee lost sight of its core areas of responsibility—school policies and curriculum.
“The people who ran East Providence—they almost destroyed that district,” Gursky said. “They developed a lot of antagonism between the school committee [and] teachers. … It became impossible for the school committee to do its job.”
Carcieri ended up losing his re-election bid in 2010, along with the other committee members who backed the unilateral cuts. “People want to know why Rhode Island is in the tank?” Carcieri said. “Voters don’t know what’s going on.”
Some of the biggest cost drivers
■ Sick Days: The number of sick days has been under scrutiny after GoLocalProv reported on unusually high rates of teacher absences in Central Falls and Providence. In of itself, a sick day does not necessarily add to the cost of payroll. The cost comes in what the district has to pay substitute teachers, says Sam Zurier, a city councilman in Providence who recently spearheaded a study of teacher contracts for the city. Districts with a higher number of sick days will incur higher substitute teacher costs.
■ Accumulated Sick Days: Separate from the issue of annual sick days is whether teachers can accumulate sick days from year to year. Most, if not all districts, allow teachers to cash out their accumulated unused sick days when they retire, in severance payments that can reach nearly $10,000 per teacher in some districts.
■ Step Increases: Besides normal raises, teacher salaries increase according to a step system. A step is essentially an automatic pay raise that a teacher receives. Typically, a teacher advances from one step to another each year of work, until the teacher reaches the top step. GoLocalProv examined what the salaries are at the top steps across Rhode Island school districts.
■ Health Insurance Co-Pays: Health insurance remains one of the biggest personnel costs in local budgets, but historically teachers have borne a small share of that cost. Only in recent years have school districts begun increasing the premium co-pays for teachers. While most school committees are now pushing for 20 percent co-pays, a number of them still have co-pays at far lesser rates. Also, some districts set co-pays not at a percentage but a fixed dollar amount, which is usually significantly less than the market rate, according to Blais.
About the chart
The below data is presented as a snapshot of which contracts have the greatest additional costs. The four factors—sick days, accumulated sick days, health insurance co-pays, and the top salaries—are meant to be representative, not exhaustive. Data is taken from a database of teacher contracts maintained by the Rhode Island Association of School Committees.
■ For sick days, the maximum number that a teacher can get each year and the maximum number a teacher can accumulate are shown. But it should be noted that in some districts, not all teachers are eligible for the maximum. Also, regular sick days were examined, not extended sick leave, which is usually treated separately in contracts.
■ For health insurance co-pays, a few districts have different rates for different groups of teachers, depending on date of hire or how many years the teachers have been in the district. In those cases, the percentage shown is the most generous rate possible under the existing contract.
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