Category Archives: Contract Negotiations

GPPSS Board of Education and GPEA Reach Tentative Agreement

Last night the Grosse Pointe Public Schools Board of Education authorized the administration to enter into a Tentative Agreement with the teachers union, the Grosse Pointe Education Association (GPEA).  Following the Board’s approval, the GPEA subsequently also authorized the Tentative Agreement.

Until the GPEA follows their formalized procedure, details of the Tentative Agreement cannot be shared.  The timeline, as I understand it, is as follows:

  • Monday, May 3 – GPEA General membership meeting to review provisions of the proposed contract.
  • Monday, May 10-GPEA  General membership meeting for questions and answers about the proposed contract
  • Monday, May 17 – GPEA Ratification Election

Following these activities, should the membership of the GPEA agree to the terms of the Tentative Agreement, the Board of Education would formally ratify the Tentative Agreement in a Open Session.  If the timeline above is adhered to, that should be soon following the May 17th vote.

I look forward to keeping everyone appraised of this progress, but again I cannot share details of the Tentative Agreement.  Stay tuned.

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Proposal A Giveth and Taketh Away

The landmark tax and school finance legislation approved by taxpayers in 1994 has been much maligned as of late, but there were less complaints when the state economy was healthy.  A review of the staffing, tax and compensation trends of the Proposal A era may help us make sense of the current challenges.

A Grosse Pointe South teacher’s quote in the paper may sum up the general feeling among his peers:

“The governor, the Republican Party and even school boards have made teachers their whipping boy.  I just don’t enjoy coming to work any more and looking toward that kind of a future.  It seems too many people care more about the cost than the quality of education.”

Was this said a couple weeks ago along the picket lines formed by current members of the GPEA?  Not quite.

It was said 16 years ago by my calculus teacher, the brilliant Frank Ford.  It is sad to think that Mr. Ford felt this way as his career came to a close just as it is sad to think this may be well how most our teachers feel now.  But was Mr. Ford’s dour outlook of the future merited?  Let’s take a look at what has transpired since then.

Using state of Michigan Bulletin 1014 data, GPPSS’ own data, and inflation calculators I compiled the following statistics comparing the GPPSS of 1993 to 2009, a tidy bookend view of the Proposal A era.

Here’s some things that catch my attention:

  • Enrollment is higher now than 16 years ago. Not by much, but higher nonetheless. Despite that, our elementary class sizes are smaller.  This is good data to reflect upon under the shadow of the growing trend to close schools.
  • Our per pupil revenue was 14th highest in the state and 16 years later we rank 49th – evidence of Prop A’s design to smooth per pupil funding differences among school districts.
  • Our average teacher salary in 1993 much more closely aligned with our revenue ranking – 12th in average salary to our 14th ranking in revenue.  Despite our drop to 49th in revenue per pupil, we now rank 1st in average teacher salary.
  • Our administrative costs per pupil ranking has dropped precipitously, down from 56th to 387th in the state.  So not all employee categories have enjoyed the same benefits as others. 
  • Despite being ranked #1 in average teacher salary, in inflation adjusted dollars, our average teachers salaries are 0.9% less than in 1993.  But…
  • In the same inflation adjusted dollars, teacher benefit costs (namely retirement and health care) have exploded by a staggering 76% and 28% respectively.  Prop A shifted the retirement burden to local school districts, a benefit employees enjoy but that comes at a price not always recognized for what it is – a very expensive compensation vehicle.
  • Teacher total compensation in inflation adjusted dollars has increased by 7.6%.
  • Factoring a more favorable student to teacher ratio, the GPPSS total inflation adjusted teacher compensation costs increased by 18.4%, outpacing the inflation adjusted 14.8% increase in General Fund budget.  This also means that other expenditures have dropped substantially to support this imbalance.
  • Teacher and Teacher Assistant staffing increased by 14.5%, a 3.5 multiple of our 4.1% increase in student enrollment.
  • Meanwhile all other employee staff levels decreased by 32.5% with secretaries, custodial/cafeteria, and other non-instructional staff taking the biggest hits.  Amazingly, the total number of employees is essentially identical to 16 years ago (with more students), but the distribution shifted more in the favor of direct instructional employees.
  • Local property tax millage revenues in inflation adjusted dollars have decreased 71%.  This was one of the primary objectives of Proposal A.

Like a gentle breeze at our backs for most of its existence, Proposal A has delivered substantial benefits to most parties – but now the breeze has shifted.

The data shows that no teachers in Michigan have fared better than Grosse Pointe teachers in the Proposal A era in regards to salaries, which in our case have basically kept pace with inflation. 

With no associated compensation reduction to offset the massive increases in other benefits, the compensation package is clearly more rich. In 1993 as now, teachers make no contribution to their health care premiums, despite its substantial cost increase.  By state law teachers do contribute more to their retirement, but this has done little to soften its 76% cost increase to the district.  Throw in more favorable student:teacher ratio and the working conditions, like compensation, have also improved in the Proposal A era.

From 1993 to 2009 no employee category added more jobs to their ranks than teachers.  In the same period of time staffing levels of many other employee categories were reduced dramatically.  Secretaries and plant/cafeteria staff are down 38% and 30% respectively from 1993 levels.  Yes, we will lay off teachers in 2010, but a greater percentage of other employees will lose their jobs as well.

What about taxpayers?  We can’t very well isolate the cost increases from higher sales and income taxes brought about by Prop A, but undeniably property tax burden has been massively reduced.  Meanwhile SEV’s have kept pace with inflation.  Generally these should be viewed as favorable outcomes by taxpayers.

What other reasonable outcomes might the teachers and taxpayers of Grosse Pointe have preferred?  Is it reasonable that teachers should want to be compensated at levels even higher than their current #1 ranking, particularly in light of our drop in our per pupil revenue ranking?  Is it reasonable that taxpayers could want tax relief even greater than what Proposal A delivered?  There’s a pretty good argument here that Proposal A has been a fair and effective piece of legislation…when times were good.

So why has Prop A become the scapegoat for the current K-12 funding crisis?

The Proposal A dilemma is this:  What happens when the same economic forces that enabled increases in revenue per pupil which in turn drove increases in total compensation begin to stall or even reverse?

That’s where we are now. 

Our per pupil revenue has declined yet we have structural expense commitments predicated on the revenue increases that were the norm for most of the Proposal A era.  Gov. Granholm’s renege on 20J funds, a core component of Prop A, only further disrupted the delicate balance.  That’s the problem in a nutshell. 

Proposal A wasn’t particularly maligned as compensation increased and property taxes decreased.  But it’s clear now that the revenue model is not able to keep pace with the established expense pattern, a direct result of the state’s well-documented loss of wealth.  As state wealth rose so did compensation.  State wealth has dropped, but no one wants to acknowledge that perhaps compensation (of varying forms) must shadow state wealth in both directions. 

The potential decrease in income is an unfortunate prospect, but we enjoyed the fruits of Prop A and now we don’t want to taste its vinegar.

The Frank Ford’s of today probably feel much as he did then.  In Mr. Ford’s day the school boards could (and did) go back to taxpayers for property tax increases.  Today we do not have that option.  Mr. Ford probably didn’t like Governor Engler, but at least that governor and legislature had the political courage to bring about sweeping change in 1993’s time of crisis.  And history has proven that Grosse Pointe teachers had more reason to be optimistic than Mr. Ford was.

In 2010, political courage is nowhere to be found in Lansing, tempered in no small part by the well known sentiment of the voters’ distatste for higher tax burdens.  The voters in the state of Michigan have essentially said “we like Proposal A just the way it is.  Thank you very much. Figure out how to make it work with what it delivers.”

The data comparison from 1993 to 2009 shows what Proposal A delivers under good to normal economic conditions.  2010 gives us a glimpse as to what happens when that which had been able to giveth now begins to taketh away.

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MEA Admits It: Spending Fund Equity is a “Band Aid”

The Michigan Education Association’s official position on spending Fund Equity in response to the K-12 funding challenge says it better than I could.  They acknowledge it is a “band-aid.”  The leadership of the Grosse Pointe Education Association would be well served by not cherry picking the position of the MEA and taking a long-term view for the well-being of the Grosse Pointe Public School System.

I’ve written about Fund Equity previously and we need to revisit the topic now.

The topic got statewide attention last week when the House Education Committee Chairman, Rep. Tim Melton, sponsored legislation that would not allow K-12 school districts to maintain fund equity levels greater than 15% of their budget.

To provide some context for Grosse Pointe Public Schools, our Fund Equity is about 17% of our $105,000,000 General Fund budget.  So this bill would require us to spend $2,500,000.  To put THAT into context, our projected budget shortfall for next year is about $7,500,000.  So this would amount to Lansing “helping us solve” 1/3 of our problem.

So in the grand scheme of things, is this that significant?  After all, we DID spend $2,600,000 of our fund equity in October 2009.  Did our problem go away?  Of course not.  Spending more to mask rising salary, health care, and retirement costs never solves the problem.  But here is the significance of these discussions:

  1. By taking this action, Lansing is acknowledging that 15% is an appropriate level of Fund Equity.  The leadership of the Grosse Pointe teachers union, the GPEA, disagrees.  They have publicly advocated that Grosse Pointe’s Fund Equity levels should be reduced to 7%.  This provides their justification to fund additional annual raises (on top of the standard steps and lanes) of nearly 6% over the next three years.  Why would they think this way?
  2. The GPEA is an affiliate of the Michigan Education Association (the MEA).  The MEA’s lead economist, Ruth Beier, testified in Lansing in support of this bill.  This is no surprise.  But what is more significant? The MEA thinks 15% is too high. They believe 5% is the right amount.  So the leadership of the GPEA is more fiscally conservative than the MEA…by2%.  So we’ve got that going for us.
  3. Of greatest significance is that the MEA acknowledged that even spending fund equity is not a long term solution.  The direct quote from Ms. Beier is, “While we (the MEA) support this bill, we know that this is a short term solution.  It is a band-aid rather than a cure.  We caution against relying on this one time fix, and urge the legislature to come up with a way to close the structural deficit in the School Aid Fund.”  Ms. Beier, you and I could not agree more on that point.

So the GPEA leadership is dutifully singing from the MEA hymnal locally, but conveniently ignoring the second leg of their proposed “strategy” – one that is dependent on Lansing  to solve the long-term problem.  The leadership of the GPEA wants the taxpayers of Grosse Pointe to fund nearly 6% of additional raises to those on the top end of the salary scale by using fund equity when the leadership of the MEA acknowledges that without other structural change from Lansing, spending Fund Equity is nothing but a band-aid.  How many taxpayers in Grosse Pointe want to buy a $10,000,000 band-aid?

Lansing politicians haven’t shown the skill, will, or resolve to address the K-12 budget problem.  The politically convenient solution for them is to kick the can down the road, as they’ve been doing for years.  I’m not willing to bet the future of the Grosse Pointe Public School System on a sudden transformation in Lansing.

I’ve asked before and I will ask again.  How many of the taxpayers of Grosse Pointe have any faith that Lansing will address the structural deficit in the School Aid Fund that the MEA acknowledges exists?  The fact is they either don’t know how to do it, don’t have the will to do it, or are content to let the local school districts solve it on their own.  Until I see a shred of evidence to the contrary, I’m betting we need to solve this on our own.

I’ve been saying this for my nearly five years on the Board.  This problem is real and it is all ours.  There is no back door.  There is no way to avoid it.  Ignoring it only makes it worse.  The responsible school board takes a long-term approach to this problem.  Spending $10,000,000 of fund equity to fuel escalating salary, retirement, and health care costs without a pre-identified and agreed upon long-term solution would be nothing short of irresponsible.  I believe the taxpayers of Grosse Pointe want the school board to take the long-term view. I’ve written about it before.  This is the New Normal. We had better be able to deal with that.

Kudos to my friend and Birmingham Public School’s school board trustee Rob Lawrence for raising this issue in his blog.  Rob was able to get the documented testimony on this bill and posted it online.  You can see it below with Rob’s comments typed in red within it.

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