PCSD: Fiscal Crisis

It was reported by PCSD officials that health care premiums and pension hikes will add another $800,000 in costs to the bottom line for the next school year. In addition, district officials project that another $75,000 will be needed for salary increases. Many other costs are predicted to increase as well but the primary costs in schools are for salaries and benefits. The problem, at the PCSD and in most public schools, is not the salaries paid to employees but the unsustainable costs of benefits.

The district projects the following increases:

                 2012 -2013      2013-2014         2014-2015      2015-16         2016-17
Salaries    $9 million (M)       $9.1 M          $9.35 M         $9.65 M          $9.9 M

Benefits   $7.15 million        $7.9 M           $8.4 M            $9.2 M            $10M

School officials report that benefits:

• For the current school year (2012-13) are 79% of the salaries. 
• For 2014-15, will be 90% of the salaries.  
• For 2016-17, are expected to exceed the amount paid in salaries (benefits will be 101% of salaries).
• In 2008-09 benefits totaled $6.5 million. This year they are $7.1 million. In four years, they are expected to be $9.9 million. 

Officials report that salaries:

•  Will increase by approximately $300,000 per year from 2014 through 2016. 

The runaway and unsustainable costs lie in the benefits guaranteed to employees through their locally negotiated contracts. One might reasonably predict that since both the Board of Education president and vice-president have spouses in PCSD unions, that there will be little impetus on the part of the Board to do something significant to address benefit costs that in a few years will exceed the cost of salaries. 

What needs to happen?

1. Lobby Legislators and the Governor: The PCSD superintendent was quoted (11/27/12 Watertown Times) as saying that district officials have lobbied the NYS Legislature and the NYS Budget Office for equity in funding for schools. Additionally, he asked the Mandate Relief Council to place a limit on the percentage of Health Insurance costs that public schools must contribute to employees' premiums. Kudos to him for taking on one of the elephants in the room.Tedra Cobb and Rachel Wallace have been leaders in encouraging the public to lobby the Governor and Legislature to end the GEA (gap elimination adjustment), to reform the school aid formula, to use up-to-date data to determine the CWR (combined wealth ratio), and to provide mandate relief to school districts.
2. Lobby Your Superintendent and Board of Education: The local union contracts are negotiated and signed by the superintendent of schools. The Board of Education votes on ratification - which means they vote to release the money to pay for the contract provisions. The superintendent and the BOE need to hire attorneys who specialize in contract negotiations (to handle the negotiations). Since 1992, when I was first elected to the BOE, I have listened to legal experts explain the benefits of using their services to deal with the most significant financial decisions (union contracts) made by local school officials. Even when management in the PCSD made an extraordinary error in the contract it approved and ratified (leaving out ONE word which then guaranteed tenure rights to non-tenured teachers), the BOE and Supt. still could not be convinced to hire an attorney to handle negotiations. While hiring an attorney to oversee contract negotiations seems like common sense, the PCSD will not change its old habits until the public becomes aware of this major problem and insists upon crucial change. Do not believe anyone who states that hiring an attorney would be too expensive. The PCSD has found out that what is really expensive is dealing with mistakes in its contracts...and they have been very costly.  In the education funding problem in NYS, Albany is only half of the problem; the other half is local superintendents and Boards who are incurring extraordinary future costs that are jeopardizing  the long-range fiscal solvency of school districts. The time has come to stop kicking the can down road for others to handle.