Merrimack Education Matters

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Contract Wrong for Teachers & Taxpayers

April 1, 2013

Gary G. Krupp

Election Day is just a week away and there are some important issues for voters to consider on the school side of the ballot. One such issue is the teacher's contract. As I have written previously here and here, the teacher's contract represents the single greatest cost driver in the District's budget so it is important we get it right. Teacher salary & benefits represent 43% of the current budget. As I have also stated previously, we need the pay raises negotiated by the School Board to repair deep disparities in teacher compensation over much of the pay chart. The problem is that the Merrimack Teacher's Association's (MTA) distribution of the raises is not in the best interest of teachers or taxpayers. If the contract is approved as is, both parties will be hurt in the long run.

This blog is in two parts. Part 1 summarizes the whole piece. Part 2 is for those who doubt the veracity of my claims in Part 1 and need to see the numbers. Part 2 has links to all of data that proves there is a better pay table solution than the one currently proposed.

Part 1

The bottom line is simple.  I developed pay tables (referred to as “GGK” tables here forward) that provide better pay raises than the MTA tables do to two-thirds of the teaching staff.  Unlike the MTA plan, which caters to the powerful voting block within the union, my plan considers the needs of all teachers.  Frankly, I am scratching my head.  Why teachers are accepting the MTA tables is a mystery to me when more the 60% of them could have better pay under GGK tables.  Furthermore, the GGK tables benefit taxpayers too as they provide for the long-term viability of the District by making early- and mid-career pay grades competitive with peer districts which will save residents money down the road.   The current contract presented to voters is not good for teachers or taxpayers.  The GGK tables would be a win for teachers, a win for taxpayers and most importantly, a win for our kids.  I recommend voting down the contract (Article 6) but voting in favor of Article 7, which allows the School Board to hold an additional meeting to deal with cost items of the contract.  The School Board and the MTA can then fix tables and come back to voters.

Part 2 

In my last article, We Need a Raise in Teacher Pay, I explained the current state of our pay table when compared to peer districts so I won't repeat that analysis here.  In short, there some pay categories where Merrimack leads its peers in compensation but there are many more pay categories that are uncompetitive in the marketplace.  Being the lowest bidder for workers in the early- and mid-career pay categories makes it difficult for the District to attract and retain young teachers.  I compared the MTA and GGK pay tables with peer districts.  Both the MTA data and the GGK data used the same teacher population of 351.6 teachers and both spent the exact same bottom-line pay increase approved by the School Board in negotiations. When put side-by-side, the MTA vs. GGK comparison showed the following:

1.  GGK pay tables benefit more teachers - The GGK tables provide raises to every teacher while providing greater salary to more teachers than the MTA plan does. Click here to view the GGK pay tables and here to see the MTA pay tables. The GGK tables are color coded; green numbers indicate pay categories that are greater under GGK, red numbers for categories that receive more under MTA. Furthermore, the annual pay difference is shown off to the side of each GGK chart. When one considers the current population model of 351.6 teachers in the District, the following number of teachers receive better pay raises under the GGK tables:

  • Contract Year 1 – 227 teachers receive more pay with GGK

  • Contract Year 2 – 206 teachers receive more pay with GGK

  • Contract Year 3 – 230 teachers receive more pay with GGK
            2.  MTA tables do not fix enough pay categories - The GGK pay tables support long term recruiting and retention for the District while offering competitive pay to all pay categories. The GGK tables also promote a more balanced workforce structure, that is a structure where teachers more regularly distributed through the pay table. It is balance that will serve the needs of taxpayers and students long-term (more on this later). To show this is true, look at the GGK peer rankings and then look at the MTA rankings. This is the same kind of peer analysis that the Merrimack School Board used to justify the pay raises negotiated. Take note of how many more compensation categories are green or yellow in the GGK charts (particularly by year 3 of the contract) versus the MTA charts. The GGK rankings indicate a more competitive pay table among peers which promotes balance and is good for the taxpayer.

            Why is balanced workforce important to taxpayers? A couple of charts will help to explain how balance reduces costs. The first graph below is a “sandpile chart” of our current population of teachers (note: vertical axis limited to make it easier to view … click here to see the unscaled plot). Under the current 2012 13 pay table, this distribution of teachers costs taxpayers $19,121,632 for salary and an additional $4,197,198 in retirement and FICA costs. If we look at a hypothetical distribution of teachers represented in the second chart, we can see what a “balanced” structure might look like. Whether this specific distribution is the “right” balance is really a point for another discussion but for arguments sake, let's say we magically shifted our workforce of 351.6 teachers into that shape. That pay distribution would reduce salary cost to taxpayers by $795,544, or a total of $969,052 after considering FICA and retirement. So, we could save taxpayers a million dollars if we had a more balanced workforce. We can't achieve that balance overnight but by setting a pay table that promotes balance in this contract, we start walking the path towards that objective. We will give the District the tools to be competitive in the early- and mid-career pay grades so that the workforce will begin to balance itself through natural workforce attrition over the long term. The MTA's pay charts do not support this.

            What should we do from here? I recommend voting down the contract (Article 6) but voting in favor of Article 7, which allows the School Board to hold an additional meeting to deal with cost items of the contract. As verified by the School District Attorney, this approach would allow the School Board and the MTA to quickly negotiate new pay tables and allow the voters to reconsider the contract without changing the bottom line costs. The parties needn't use the GGK tables (although I would) but those tables prove that better tables are achievable for all parties. If we pass the contract with the current proposed pay tables, we will be in a much worse situation 3 years from now; the pay disparities will be worse and we'll be 3 more years behind in efforts to repair them. The GGK pay tables provide for the viability of the District and save the taxpayer money over the long term while financially benefiting more teachers. Using tables similar to the GGK pay tables would be a win for teachers, a win for taxpayers and most importantly, a win for our kids.

            Copyright 2013. Gary G. Krupp. All rights reserved.

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