Chapter 7 – Where has all the money gone? Part I and II

Almost every time I told someone I was writing a solutions-based book called “Why We Failed: 40 Years of Education Reform” they asked the same question: Where has all the money gone?

The American public knows we’re spending more on education than we have in the past, but they’re not seeing good results written about in the newspaper[i] or reported about on television and they want to know why.[ii]

They’re right about the fact that we’re spending more – way more.

In 1970, the average annual cost per pupil in New York State was $1,327, according to the National Center for Education Statistics.[iv] Factor in simple (Cost Price Index – CPI) inflation (6.46) and that number today should be $8,572. But the actual median expenditure per pupil in New York State in 2014-15 was $22,552[v]; that’s 163 percent or $13,980 more than inflation (with a CPI of 6.46 from 1970 – 2015, 1,327 X 6.46 = 8572) can explain.

We’ve reached a cost-per-pupil crescendo that started really gaining steam in the 1990’s, one that rose steadily during most of my 45-year career.[vi] [vii]

States without strong public unions – states like Utah, Idaho, Arizona, Oklahoma and Mississippi, the five lowest education spenders in the nation – have consistently spent more than inflation as well. In 1970, they were spending $610 per pupil per year.[viii] In 2015, they spent an average of $7,490 per pupil; that’s 89 percent or $3,549 more than inflation (assuming a CPI of 6.46 from 1970 – 2015, 610 X 6.46 = 3941, 7490 – 3941 = 3549) can explain.[ix]

So that’s 163 percent more than inflation in the high cost states and 89 percent above inflation in the low cost states.

So where has all the money gone?

(Sections in italics are composites of multiple actual experiences.)

Like herding bees

In 2013, I interviewed with the Mt. Mason School District school board for a one-year position as interim superintendent. Before heading out to meet them, I read several online news reports and viewed a few television news stories about the bitter feud between the school district and its three unions (teachers, support staff and administrators) over long unsettled labor contracts.

As I drove into Mt. Mason I was greeted by a “Welcome to Mt. Mason, NY State’s Friendliest Small Town” sign that belied the news reports I had read and seen on television which featured picket signs and an angry public.

As I drove around the town in the hour I had to kill before my interview the word that came to my mind was “sleepy.” A few small shops, a diner, two gas stations, a car wash, two liquor stores and a large grocery store dominated the “downtown” area. There were very few cars on the road at 7 p.m. Several suburban housing developments directly off the two main roads into town had well-kept lawns and homes. Most of the residents apparently commuted to work in Albany or Schenectady.

I spotted the three elementary schools and the nearby middle school and high school that served the 2,100 students in Mt. Mason’s schools. The 1960’s and 70’s era school buildings looked good from the outside and there were no ongoing major construction projects.

My online check of Mt. Mason’s schools and their test scores showed them as average performers in comparison to other school districts with similar demographics. This was interesting only because the bitterness generated by extended union contract talks, now stalled for five years at Mt. Mason, can frequently push student test scores down over a period of time.

When I arrived to the interview, I was greeted by Mt. Mason’s five school board members and the BOCES (Board of Cooperative Educational Services) regional school district superintendent, Paul Johnson, a colleague I had known for 20-plus years. Everyone was cordial and positive in demeanor and tone.

Again, this contradicted the scenes I had seen on television and read about in the paper. I knew from other superintendents and news reports that this board had two bitter factions and that BOCES superintendent Paul Johnson had weathered several contentious arguments with them over previous superintendents who had not been successful, according to the board. They blamed Paul who, as BOCES superintendent, had helped with their superintendent searches.

I based my answers to their questions on my previous experience in districts with difficult employee contract negotiations where I had to repair damage caused by long-standing contract negotiations.

Through information from news reports and colleagues I trusted, I understood the two perspectives of the school board factions. One group, the apparent board majority with three members, feared a contract settlement that “gave away the store” with higher salaries for employees and inadequate give backs from the unions on benefit costs and work rules.

The second group, the board minority with two members, feared that continuing strife from the unsettled contracts would tear the district apart, damaging academic results and exacerbating a negative climate in the schools for students, teachers, parents and administrators.

My experience taught me there were two things that would be the biggest impediments to resolving these negotiations: pride and saving face.

I was pretty sure all involved feared being viewed as the “losers” in the never-ending negotiations battle. My answers to their questions emphasized three key points:

  1. The school board needed a simple set of negotiation goals for each unsettled contract.
  2. The best way to identify compromises we could all live with was with data showing how Mt. Mason compared with the other school districts in the area.
  3. The school board members needed to get out of the way so the interim superintendent could settle the contracts.

Mt. Mason was much too small to drive the local employee labor market. Bigger districts do that and then only to a limited degree. The best Mt. Mason could do was make certain their settlement reflected or at least moved the district closer to the norms in the region.

The interview was brief and I assumed when it ended quickly that I had somehow missed showing those present the key ingredient they were searching for so I was surprised when the next day Paul Johnson called me to offer me the position.

The offer came with a warning.

 “I’m not supposed to tell you this but you and I have worked together for many years and I want to be honest with you so you know what you are getting into,” Paul said. “They are still bitterly feuding and they are exhausted. In your case, the majority ruled.”

I had worked with split school boards before and it was very difficult. 

“Okay,” I said, “let me meet with them and discuss what I want to do. If they still want to hire me when we’re done, I will take the job. If not, I’ll tell you, ‘no thanks,’ and we’ll go our separate ways.”

My next meeting was set for the following Monday night at 7 p.m.

When the school board showed up for the meeting session minus Paul Johnson I came prepared with some large poster-sized sheets of paper and some magic markers, some blank sheets of 8 ½” by 11” copier paper, some pens and six copies of the existing teacher contract the superintendent’s secretary had graciously provided to me.

“I know this school board has a long-standing disagreement about the unsettled contracts,” I told them, once we settled in. “I also know your board is split on the issue of whether I can successfully help you settle the contracts and run your district effectively for the next year.

“I also have some doubts about whether I can do this successfully given the level of friction between the factions on the school board I’ve read about in the newspaper and seen on television. And given the disagreement you have about whether I’m the right person for the job.”

Then I proposed a 90-minute session that would help both of us decide whether or not to move forward.

At first there was silence. Then three of the school board members said they would be willing to work with me for 90 minutes. One of the two reluctant board members who didn’t immediately agree to my request, a big grey haired man in a red plaid flannel shirt, wanted to know what we’d do for 90 minutes.

“I don’t want to waste an hour and a half if you’re not going to be our superintendent,” he said.

“I’m going to try to get all of you to agree on some goals for the teacher negotiations. Whether I am here or not those goals will be helpful for the school board,” I said.

The other reluctant member, who had not agreed to my request, a young woman with long black hair and large tortoise shell eyeglasses, spoke up.

“We already know what we want from those negotiations and we haven’t been able to agree for several years. How are you going to get us to agree in an hour and a half?” she asked.

“Whether we can come to an agreement on these goals in a reasonable amount of time will reveal if a full year working relationship and an effort to resolve these unsettled contracts makes sense — for you and for me,” I said, as calmly as possible.

“Okay, let’s get this over with,” the man in the plaid shirt said. The woman with the tortoise shell glasses followed with a nod.

I asked the board majority (three members) who shared concerns about the financial costs and work rules for teachers in any potential contract settlements to sit together in one corner of the room and the board minority (two members) with concerns about the negative climate in the district to sit together in the opposite corner of the room.

When the chairs and tables were rearranged, I handed each of the five board members paper and a pen and each group a marker and poster-sized paper. I also gave each school board member a copy of the existing teachers’ contract, which expired five years earlier but still remained in effect due to New York State laws and supporting court decisions.

“It’s 7:15 p.m.,” I told them. “For the next 10 minutes I want you to individually write on the sheet of paper the three most important goals you have for the teacher negotiations.

“Feel free to write more than three as you are making up your mind but when 10 minutes are up I want your three in priority order with No. 1 being your most important goal and No. 3 being your least important goal.

“Please don’t talk to your fellow school board members while you do this task. I want these to be YOUR teacher negotiations priorities not someone else’s.’

While the board members completed the task I wandered around like a high school math teacher checking my students’ classwork. A pattern began to emerge.

The majority members had more specific numerical goals about salary increases and benefit costs and about prep period times and class loads for high school teachers. The minority group had more goals about getting the contract settled quickly to repair the damage that had been done by protracted negotiations. 

Neither group had any goals about saving face or looking like they were “winning” and not “losing” the negotiations, but I could read between the lines.

Winning or at least not losing negotiations is paramount to most school boards and many superintendents. By getting the board members to write down their goals I was forcing them to put their cards on the table. Like most, this group did not want to appear shallow so they skipped writing down the goal of winning. But I knew we’d have to face this issue (fear of looking like they lost) head on before a final agreement on the contract could be ratified by a positive school board vote.

Every negotiations I’ve participated in included personal animosity and issues related to ego. Many school board members and superintendents try to make themselves look important by verbally promising unrealistic unachievable negotiations goals. But they hesitate to put unrealistic goals in writing.

When ten minutes were up I asked one member of each group to record the three goals of each board member on poster-sized paper while the others took a short break. This task was finished in five minutes and the majority group had nine goals listed and the minority group had six goals listed.

Then I asked the groups to put the lists on the wall and to edit, combine and simplify their goals as concisely as possible and to shorten the goal list to the shortest comprehensive list possible that included every board member’s priority goals. 

The room was instantly buzzing with what any teacher would call “good talk” about the key issues and their importance. When I stopped the conversations I asked one member from each group to print in large letters their final goals so that everyone could see them. The group of three had consolidated their nine goals into six. The group of two board members had consolidated their six goals to four.

I gave them the next 15 minutes to discuss these goals and advocate for their own point of view within their group regarding which goals were most important and why. When the 15 minutes of discussion ended I had them tack their lists of six and four goals to the bulletin board at the front of the room and prioritize the goals on their group’s list by using six small stickers.

They were to affix three stars next to their first priority goal, two stars next to their second priority goal and one star next to their third priority goal.

I made certain the goals that didn’t make the cut in the final priority list for both groups were visible to members of the other group. I wanted everyone to know that sacrifices had been made by their “opponents” to reach this shorter priority list. Goals that didn’t make the cut included those about repairing damage that had been done to the school district’s reputation as a result of protracted negotiations, teacher class loads and work schedules and the school year and day length.

I asked them to move their desks and chairs back into a rough class-like formation. When the desks were back in order I moved the two completed goal sheets up side by side on the bulletin board at the front of the room and I told them to read the two sheets for the next three minutes and identify the surprises and the anticipated items they saw in the list created by the other group. This is what they were looking at (excluding the goals that didn’t make the final priority list).

Board majority group’s priority goals for teacher negotiations:

  1. Teacher raises of less than 1 percent new money in total per year including incremental steps; no more than inflation; and no retroactive raises.
  2. Teacher contributions for health insurance increase from zero percent to 40 percent.
  3. Retirement incentive to clean out some of the deadwood teachers at the top of the salary schedule.

Board minority group’s priority goals for teacher negotiations:

  1. Settle teacher contract negotiations this year.
  2. Give teachers a fair salary increase to reduce negative climate in the district.
  3. Teachers should contribute something toward health insurance.

All five school board members understood that the cost of “increment” (teachers moving up the salary schedule from step to step) meant most teachers would receive a built-in raise of zero percent to almost two percent.

These amounts varied due to the anomalies of one or more previously negotiated contracts. (For example, the raises on steps 8 through 11 were 0 percent likely due to the fact that the teachers on the negotiating committee were NOT on those steps, a common practice that causes some annual budgets to balloon.)

Increments cost Mt. Mason district an additional 1.2 to 1.8 percent of the total teacher salary cost each year. Teachers receive step raises even after contracts expire, a requirement based on New York State labor law and supporting court decisions and one that makes it easier for teacher unions not to let unsettled contracts continue for years.

Mt. Mason teachers received no raises beyond step raises over this five-year period of stalled negotiations, and I knew the majority board members wouldn’t ever agree to retroactive raises.

I asked the five school board members what surprised them about the list created by the board members in the group they were not part of.

“I‘m surprised they listed health insurance contributions as a priority goal. They never said that before,” said the gray haired man.

“We have always supported health insurance contributions just not at 40 percent,” said the young woman with the tortoise shell glasses.

What surprised you about the board majority’s goals?” I asked the minority group.

“Both groups have goals about salary and health insurance,” said a quieter man in his thirties, who I later learned was Mike Testa.

“That’s right,” I said. “Let me see if I can get both groups on the same page on those two goals.”

I realized later that Mike Testa could be helpful to me. He was thoughtful and his soft spoken manner was less antagonistic than that of the grey haired man with the plaid shirt. Mike could also get the black haired woman in the tortoise shell glasses to soften her approach so that better communication took place.

I turned to the board majority seated to my right. “You have set one percent total new money and no retroactive raises as your salary goal. Do you know what your teachers are paid relative to other districts in the area?”

The grey haired man I now recognized as school board president Harold Smith spoke. “Our teachers are paid too much already,” he said. “They only work ten months and they get all those school vacations. We shouldn’t give them any raise at all.”

When he finished speaking an older grey haired woman seated to his right, who I later learned was Helen Anderson, spoke up. “To answer your question, we have heard our teachers make more than those in Amsterdam and Gloversville which are nearby and comparable to our district.” she said.

“But have you seen an actual salary comparison on paper of all the local school districts?” I asked.

“No.” she responded. 

“Have any of you seen a written summary of all the local district’s health insurance costs per teacher and contribution rates teachers make for their health insurance?” I asked the entire school board.

“We have heard that the teachers in the same two districts contribute 20 percent toward the cost of their health insurance, but we have not seen a written summary of all the local districts,” Helen Anderson said.

“If the other districts paid their teachers more or paid less for their health insurance with teachers paying a higher percentage of their health insurance costs, would that alter how you see these issues?” I asked the three members of the school board majority.

“Yes, we don’t want to be taken advantage of by the teachers’ union, but we want to be reasonable,” Helen said. “We should look at that data and make sure we’re headed toward the average for the area, no more and no less on salary and health insurance.”

During this entire conversation the third member of the school board majority, a big man dressed in blue jeans and a rumpled black sweatshirt, who I later found out was named Doug Allen, said nothing.

“What do you think about the teacher salary question?” I asked him in an effort to involve him in the discussion so I could better gauge his viewpoint. Doug looked confused.

Harold jumped in to protect his friend. “He thinks our teachers are paid too much and should contribute more for their health insurance; same as me.” Harold said.

Doug smiled and pointed to Harold. “What he said.”

I found it amusing the first time Doug said “what he said” after Harold said something. About the tenth time I found it annoying. It was pretty much all I heard Doug say the entire year I worked in Mt. Mason except when he talked about his red pick-up truck, his obvious pride and joy.

I turned to the two member board minority group. “Your group said you want a fair salary increase for the teachers. How would you measure whether the salary is fair?” I asked.

“I see where you’re going with this,” said the woman with the tortoise shell glasses who I later learned was Tabitha Conner. “We’d have to look at our district’s salary in comparison to other local districts and I think we can live with that on both salary and health insurance.”

“I think a compromise you can both live with can be made, I told them.

I grabbed a Sharpie and wrote out:

  1. Teacher salary increases (step plus raises) and health insurance savings in comparison to projected health insurance costs and salary costs without a new teacher contract settlement when combined (a) should not exceed one percent of the 2015-16 salary base per year for the period of the contract. And, (b) should move the district to within two percent of the average salary and health insurance costs per teacher for local school districts.

I placed my newly minted goal on the bulletin board beside the other lists of three priority goals and asked if everyone could live with it.

They were intent as they studied the proposed negotiations goal. They asked several questions. How would we determine who were the local comparison districts? How would we determine the salary base? Who would put together the comparison data? How soon they would have this data? How would the teachers’ expectation for retroactive raises figure into this goal? I answered each question carefully, explaining what I knew and what it would take more time for me to figure out. After ten minutes of questions, they were silent.

“Can you live with this?” I asked. They all nodded, in a few cases looking very surprised.

“What about our other goals?” Tabitha asked.

“I have no problem with them. We should make them goals two and three,” I said.

Our final list of three goals was:

  1. Teacher total new money salary increases (step plus raises) and health insurance savings in comparison to projected health insurance costs and salary costs without a new teacher contract settlement when combined (a) should not exceed one percent of the 2015-16 salary base per year for the period of the contract. And, (b) should move the district to within two percent of the average salary and health insurance costs per teacher for local school districts.
  2. Retirement incentive for teachers.
  3. Settle the teacher contract this year.

I looked at the clock. “It’s been 90 minutes. I think we’re done here,” I said and smiled.

They all smiled and began to chat with each other as I packed up. Harold Smith approached me.

“Look, you did what you promised and we all want you to stay on as our interim superintendent if that’s okay with you?” he asked, almost apologetically.

“I believe I can settle these contracts and achieve these goals, but you have to let me do the negotiations my way without the school board directly involved and without making inflammatory public statements,” I said.

I knew from conversations with the BOCES superintendent, Paul Johnson, that Harold Smith had inserted himself directly into the negotiations in previous years. His yelling and rants at board meetings and in the press had added immeasurably to an already acrimonious relationship between the teacher union leadership and bargaining team. If he stayed out of the way, I could get this done. If he stuck his nose in as he had in the past, nothing good would happen.

Harold looked sheepish: “I’ll leave it to you. The other approach hasn’t worked. I’ll trust you. I promise,” he said. We shook hands and both smiled.

“I’ll work out the salary and start date details with Paul Johnson and your outgoing superintendent and I’ll be back in touch once we have a signed contract,” I told him.

“I know you think I’m the problem here based on what you’ve seen in the news, but you haven’t dealt with Sally Anselm, the teacher union president. She’s a bitch on wheels and she’ll make your life more miserable than you can imagine,” Harold said.

“Harold, I have a bit of experience dealing with unions. I’m certain Sally and her negotiating team will be tough, but I feel confident we can find a way to make things work out.” I said.

This was not my first rodeo.

FDR was mostly right

Soon after becoming a teacher in 1970 I remember reading that Franklin Delano Roosevelt, the famous Democrat and depression era and WWII president, did not believe in public union negotiations for salary and benefits.[x]

This confused me. Weren’t the Democrats supporters of unions? Didn’t FDR help to establish the National Labor Relations Board and support private unions? Why this stance on public unions?

FDR apparently concluded that the city, county and village legislators, state legislatures or Congress should set wages and benefits for public employees and that while the public sector employees should be free to join unions their involvement in negotiations with their government employers made no sense.

After 45 years working with public unions I’ve come to the conclusion that FDR was mostly right. The situation in Mt. Mason is typical of the teacher and public employee negotiations that distract us from the critical task of making our public institutions more responsive and effective while wasting enormous amounts of precious leadership time and public tax dollars.

Frequently, these negotiations in the strong public union states pit David, played by the local public employer, against Goliath, played by the local public union and its state level partner, where the negotiating field is tilted in favor of the teachers. And it’s not just the teachers union, it’s the bus drivers’ union, the administrators, the support staff union.

As a result of laws and court decisions, public union employees are guaranteed annual raises based on seniority steps, continuing high cost health insurance sans teacher contributions and high employer contributions to state control pension plans.

When a school district sits down at the table with them, they don’t have much to work with, and their fighting an uphill battle against a well-funded state level opponent.

These restrictions created by law and court decisions only apply to state, local government and school district employees in strong public union states.[xi] Public unions in these states gained an unfair advantage through campaign contributions and endorsements provided to members of both Democratic and Republican parties.[xii], [xiii]

The public unions received paybacks in the form of a ratcheting up of negotiations advantages over the decades of the 1960’s through the 1990’s. In New York State, Democrats received the majority of this largesse, but the Republicans took their share as well. The union contributed millions to their campaigns and continue to contribute to this day.[xiv]

To make these negotiation contests less lopsided, school districts, towns, villages and cities try to arm themselves with the best slingshots available (expensive labor attorneys)[xv] who have developed an extremely well-funded cottage industry that grows into a more expensive and debilitating barnacle on the public school district ship every year.

While private worker union influence has shrunk over the past five decades due to the impact of globalization and technology,[xvi] public unions have become even more pernicious, particularly in states that made strategic errors by passing laws that tilted negotiations toward unions.

Public employee unions gained negotiating power primarily in blue states like New York, Rhode Island, Massachusetts and California. States like Ohio and Wisconsin, where Republicans have taken over control, have tried to create a more equitable balance.[xvii] The U.S. Supreme Court in 2016, short one member due to the death of Justice Antonin Scalia, tied 4-4 on a crucial case that could have negative impacts on public union finances.[xviii] But entrenched power seldom slinks away quietly, especially when serious money is on the table.

In Albany, NY, where I served as a school superintendent for six years, extended and acrimonious negotiations with our teachers’ union, our support staff union and our school administrators’ union included several incidents that illustrated the bitterness that can come from these public union conflicts.

  • My mailbox was destroyed by early morning explosions on three separate occasions during these negotiations.
  • Someone banged on my door at 2 a.m. waking and frightening my teen-aged daughter and my ex-wife while I was working at extended night time negotiations session with the teacher union.
  • My car was “parked in” by a vehicle belonging to one of the district’s teachers who parked his car one inch from my vehicle in an attempt to make it impossible for me to drive home after a negotiating session that didn’t end until 4 a.m.
  • At the height of these negotiations a disgruntled and ineffective payroll employee who was also a member of the support staff union leadership was involved in several conflicts in the office and had repeatedly been uncooperative with her supervisor. This employee was transferred to a different job in a different building at the same rate of pay. I had investigated the possibility of terminating this employee, but the school district’s attorney told us that given her union leadership status firing her would probably result in a reinstatement by the Public Employee Relations Board that oversees challenges on such issues.

The day the employee left for her new work assignment the entire payroll file for our district was deleted from our computer system. This delayed wage payment to 1,200 employees and required several employees to work overtime on the weekend to hand write checks for the impacted employees who received their paychecks one to three days late.

Despite the fact that we could trace the payroll file deletion back to the specific computer used by this employee our attorney strongly advised that our evidence was insufficient and we should take no further disciplinary action against her due to her union leadership status and the PERB rules and decisions regarding union animus (retaliatory actions by public employers toward public union leaders).

“Permanent status,” which is like tenure for non-teaching employees, also can protect bad behavior, illegal acts and just plain poor performance, particularly for union leaders because they will claim union animus.

  • A confidential negotiations document I had given to the school board describing my plan to begin to replace the existing high school educated teacher aide staff with lower paid and more highly qualified teacher assistants with teaching certification or at least a bachelor’s degree through attrition was pilfered from my desk and altered to say my plan was to immediately lay off all these employees (over 100).The altered version (I had no plans to lay off anyone during this process.) was distributed to all the members of the district’s support staff union. Imagine my surprise when over 150 members of this union showed up at our next school board meeting with altered documents and no warning.The employees, who attended the meeting as a result of theft and deception, were armed with picket signs calling for my firing and they chanted repeatedly “Palmer must go” for the benefit of the television and newspaper reporters they called in advance of the meeting.
  • During the acrimonious negotiations with our support staff union I visited one of the district’s elementary schools to check on the progress of summer cleaning and maintenance work. When I returned to my car I found I had flat tire. I pulled into the adjacent gas station and asked them to fix the tire while I got lunch in the diner across the street.When I returned from lunch the mechanic said, “Well, I can fix the two holes in the tire tread but the 14 holes in the sidewall are another matter. You’ll need a new tire.”
  • When I was the interim superintendent in Troy, NY, I made decisions that reduced unnecessary overtime for custodians. Several of those custodians were making more in yearly wages than my newer school principals due to “boiler” time where they “watched” the steam boilers in the high school and the middle school at night, supposedly for safety reasons. No safety issues had ever been noted during these overtime shifts and I had previously worked in other school districts with steam boilers like those in Troy that did not pay overtime for steam boiler supervision.Shortly after I ended “boiler babysitting” a bullet hole mysteriously appeared in a window in my office, the air conditioning in my office did not work and wasn’t fixed for several months (this resulted in severe allergies I struggle with to this day) and a key supervisory custodial employee took a leave of absence of more than one year in duration for an unspecified illness creating significant operational issues for the district and for me.

I don’t need to be convinced that public unions are a menace, but I had to put aside my distaste for public unions and find a way to work out the contracts that had expired in Mt. Mason. Fortunately, I knew where to find the money needed to resolve these long standing disputes given my experience in the intricacies of teacher salary and benefit costs.

It’s a simple salary schedule, right?

When public union contracts expire the assumption is, moving forward, that teachers, support staff and administrators won’t receive raises. For most teachers and many support staff members this is not the case. Most teachers (and support staff to a lesser extent) are paid according to a salary schedule with yearly steps.

If the contract expires and negotiations have not yet produced a new agreed upon contract, existing law and court decisions (in New York State this is called the Triborough Decision[xix] because the original decision that impacted public workers on the Triborough Bridge in NYC) requires teachers continue receiving step raises even without a new contract.

The Triborough Decision removes much of the incentive for public unions with contracts that include salary schedules with seniority steps to settle new contracts for fear of losing something,

The state legislature in New York could tilt the negotiating field back toward public employers by passing a law that said unions negotiating expired contracts will not receive any step raises nor will they receive retroactive raises. Don’t hold your breath waiting for the New York State Assembly and Senate to pass such a law, however. They’re too much under the thumb of the public unions to consider it.

When a teacher contract is settled the percentage raises teachers receive are most frequently, but not always, applied to all the steps on the salary schedule equally. For example, if teachers received a 2 percent raise on top of their step increases, a $40,000 starting (step 1) salary would increase to $40,800 with the $800 added to the original starting salary (0.02 X 40,000 = 800). Similarly step 2 salaries would increase by $820 to $41,820 and step 3 salaries would increase from $42,000 to $42,840.

Note: when the same 2 percent raise is applied to the larger salaries for the later steps the dollar value increases.

A teacher moving from step 24 to step 25 with this same contract settlement would see a salary increase from $63,000 to $65,280 or a gain of $2,280. In other words, the highest paid teachers receive the biggest raises.

Over many years and multiple contract settlements this effect widens the salary schedule so that now on Long Island and in other high cost areas near New York City there are multiple school districts where teachers start their careers at about $60,000 per year and 30-year teachers are earning $120,000 to $140,000. This effect is much less notable in the states with weak or non-existent public unions where many teachers presently start their careers at or near $30,000 to 35,000 and end their careers with salaries of roughly $60,000.

The increment raises in states with stronger unions are part of what I refer to as the “union premium” paid by states with stronger unions. And it’s one of the places where the money has gone and it directs most of the money to older, more experienced teachers rather than directing it to new teachers to attract new talent.

Rather than setting up the raises so that everybody gets a $1000 raise, the veteran teachers who are most frequently the leaders in the teacher union and the representatives on the teacher union negotiating team, push for a percentage. Two percent of $80,000 is more than 2 percent of $40,000.

Many teachers’ union negotiating teams also “play games with the salary schedule.”

The teachers on the committee will create bigger step raises for steps 12, 13 and 14 because they’re on those steps and make smaller step raises for steps 8, 9 and 10 because those teachers are not on the negotiating committee. It’s all the same to the school district; that is until they hire a bunch of new teachers in the same year.

They’ve built into their salary schedule that teachers at step 12 receive a huge raise and sure enough 12 years later they have to make a kindergarten class 26 students instead of 20 because they’re have a big unplanned payout. It’s a practice that makes it very difficult to plan.

While we may deplore the ethics of this action, few school districts fight hard to stop it from happening because it will make reaching a settlement that much harder to achieve and fighting it will not create any immediate savings for the district. A shortsighted mistake.

If the district leaves the setting of step values to the teachers’ union to decide they will inevitably give the smallest raises to the brand new starting teachers because they are not yet on the staff to defend themselves. This is why starting teacher pay has not gone up more than inflation in Albany, NY, or across the country.[xx]

The extra raises go to the most experienced teachers who have paid union dues the longest. The next largest raises go to mid-career and later career teachers. Not surprisingly, the biggest raises go to the top end teachers and those on the negotiating team.

How do I know new teacher salaries haven’t gone up?

When I signed my first teaching contract as a non-certified junior high school science teacher in Albany, NY, in August of 1970 I couldn’t believe my good luck. My annual salary was $8,200.

With an inflation factor of 6.36, my $8,200 1970 teacher salary would translate to an expected salary for a starting teacher with a bachelor’s degree in 2016 of $52,152 (6.36 X 8,200 = 52,152). The latest data (2012-13) I could find on the Albany City School District showed beginning teachers were paid $51,146.[xxi]

Starting salaries are still at the same place as they were in 1970. Meanwhile, big raises for senior teachers adds significantly to the district’s cost per pupil while creating only marginal or non-existent improvements in teaching quality.

Multiple successive contract settlements that give in to these lopsided negotiating teams can produce salary schedules with step raises all over the map (some years $3,000 and some years $0).

This adds to the school district’s long-term financial problems as invariably a year arrives where a large number of teachers are due to receive that $3,000 increment and this blows an enormous hole in an already stressed school district budget.

Management 101 for school districts

Frequently. when negotiations with public unions are long and cantankerous, as they were in Mt. Mason, there is a good bit of misinformation afoot and lack of understanding of the basic issues on the part of all the participants.

Shortly after I started as interim superintendent at Mt. Mason, I met with Tom Garrigus, the district’s long-time business official. Tom was tall and gangling and given to fits of nervous laughter. He had a great sense of humor that made my time in Mt. Mason much more enjoyable. Tom made it clear he would do whatever he could to help me but he wanted nothing to do with dealing with our fractured school board that had caused him difficulties on many occasions in the past.

I asked Tom for a graph summary of the salary schedules of Mt. Mason and 10 nearby school districts that showed their teachers’ salaries from when they started with the district until they reached the district’s top step on respective salary schedules. I wanted to compare what those ten districts paid their teachers at each step and what Mt. Mason paid its teachers at each step to two things:

  1. The average step-by-step pay for teachers for the 11 districts
  2. The average of the districts’ step-by-step pay for teachers plus four percent

I picked four percent because I was thinking the other districts in the area would probably raise their salaries by about one percent per year for each of the next four years. Regional salary settlement data told me my 1 percent estimate was a good guess based on all the most recent teacher salary settlements in our area of the state.

So our “target” four years out would be the present teacher salary average plus four percent.

Since Mt. Mason’s salaries overall were slightly less than the area average this would translate to roughly a one percent mid-year raise for Mt. Mason teachers during our present year and roughly one percent per year raises over the next four years of a five-year contract settlement.

I knew the contract would have to include a one-time off contract payment to the teachers, a “signing bonus,” that wouldn’t increase the salary schedule. This signing bonus was the norm for the state on long expired contracts. It was not a retroactive raise that changed the salary schedule just a one-time off-schedule payment to the teachers. I knew this off-schedule signing bonus would have to be explained carefully to the school board and would also have to fit within the 1 percent total salary schedule cost goal the school board had agreed to. 

The Mt. Mason school board struggled for years to settle the teacher contract. They needed a longer term settlement – five years – to bring stability to the district.

I knew recent contract settlements in the region included incremental raises plus 1 percent per year. So if the contract we settled with the teachers’ union gave them a 1 percent raise during the present school year and went out for four additional years, a settlement with 1 percent “new money” each year on top of the district’s 1.4 percent average incremental raises would keep the total salary cost (excluding any savings we could create with health insurance) at around 2.4 percent per year (1.4 percent increment plus 1 percent raise equals 2.4 percent total salary cost to the district). If we could create some health insurance savings to offset the new salary costs, we could meet the school board’s goal of 1 percent new money each year for the four future years of the contract.

For this plan to work and to meet the school board’s agreed upon goal of no more than 1 percent of new money each year of the contract, the health insurance savings would have to more than offset these salary increases. We had some work to do.

When Tom, the business official, came to me with the Excel spreadsheet graphic in less than a week I was very pleased by what I saw.

Mt. Mason School District Teacher Salary Comparison with 10 Neighboring School Districts


Mt. Mason’s teacher salaries (represented by the wide blue line on the graph) tracked mostly below the wide black line, which is the average of the 11 districts plus four percent.

Mt. Mason’s teachers were not overpaid in comparison to other teachers in surrounding districts, despite the contrary opinions of some school board members. The goal: A salary agreement near the black line would achieve the goals of smoothing out the salary schedule and adding only one percent new money beyond increment each year.

Yes, there were some expected anomalies due to the teachers’ union steering higher step raises to teachers on the negotiating team who, again, tend to be higher on the pay scale. The anomalies showed up as the horizontal flat places on the blue line graph – the places where the step raises were $0.

Typically, there are between 20 and 35 incremental steps in a teacher salary schedule. The most noticeable anomalies in Mt. Mason’s salary schedule were:

  • At step eight the present salary is more than the average for the region plus four percent.
  • There were no increment raises between steps eight and 11 and again between steps 18 and 21.
  • Between steps 22 to 27 Mt. Mason’s teacher salaries are well below the average for the region (represented by the green line).
  • The Mt. Mason teachers at the top of the pay scale were being paid significantly more than the average top end teachers regionally.

I knew I’d have to address the facts that teachers on step eight were overpaid, based on the average in the region, that teachers well into their careers (steps 22 to 27) are underpaid and that teachers at the top of the scale were overpaid based on the regional average.

And who will I be sitting with at the negotiating table? Teachers who were already at that overpaid top end and wanted more. That’s one area where too much of the money many school districts spend is going.

Harold, like the public, thinks teachers make too much money and has some grandiose idea that he is going to rein in these teacher salaries. You’re not going to do that as a school board member in small town. 

A Mt. Mason teacher who stayed in the district for an entire career would end up making about the same or a little less in total career wages as an average counterpart in other nearby districts. If we gave the teachers one percent new money per year for the next five years, counting the present year, and worked on reducing the anomalies in Mt. Mason’s salary schedule, we could smooth out the jagged Mt. Mason salary line and move our teachers’ pay closer to the average for our particular region of New York State.

It’s hard for the teachers’ union or school board to argue with a new contractually agreed upon salary schedule that moves the district closer to the norm for the region.

Ultimately, this was a math problem with a solution. But egos and turf warfare usually supersede mathematics and experience had taught me that I am much better at math than I am with egos and turf problems.

At the executive session preceding our next school board meeting I showed this complex graph to the school board. I was proud of what we created. I explained what the lines and data behind the graphs meant and waited for questions. It didn’t take long before Harold Smith erupted.

“What are you trying to do? Confuse us? What are all these lines? We can’t offer the teachers more than increment plus 1 percent per year. That’s our maximum amount. Don’t you have any idea how to negotiate?” he bellowed.

I sighed, this was going to be a long year. “I’m sorry Harold. I think I made this graph too complex. Give it back to me and I’ll simplify it. This is not for the teachers. It’s just for us. I’m just trying to get our goals straight and to show what we’ll need to do to achieve those goals.”

I said this as calmly as I could to avoid a pointless confrontation. Harold realized he’d stepped over the line we had agreed to both honor about his leaving the negotiations to me and he nodded. I collected the graphs and acted as if nothing had happened.

The next day in my office I simplified the graph to three lines and stapled three pages together with the three-line graph on top, the 13-line original graph next and the salary data for all the districts on the third page. This is what the simplified three-line graph looked like.

Mt. Mason Teacher Salary Comparison with 10 Neighboring School Districts


I called Harold Smith and left a message requesting that he stop by my office so that we could review some negotiations data at his convenience. Harold arrived in my office within 45 minutes. And after I closed the door I sat next to him at my conference table just as I’d sat next to struggling math and physics students in my high school teaching days. I showed him my new three-page creation starting with the simplified three-line graph.

I knew Harold’s ego wouldn’t allow him to speak the truth. The fact is he didn’t understand the graphs and his fears prompted his executive session outburst. He was afraid I was going to try to trick him with some kind of scam. I was going to have to individually coach him through every bit of math required by the negotiations to keep him on my side. And I would have to do this coaching before I presented it to the whole school board to avoid having him railroad the process because he didn’t understand the math.

This individual coaching strategy should be part of a required course on being a school administrator because it trips up many fledgling principals and superintendents.

I knew my best bet was to invest this enormous amount of time to get Harold on my side. Also, Harold’s questions and misconceptions about the graphs were helpful to me as they gave me insights that honed my explanation skills for the next executive session when I had to explain it to the whole school board. Within a half an hour Harold was relaxed and not only understood the three graphs, he was claiming credit for simplifying the graphs so that everyone could understand them more easily.

At the next school board executive session the simpler graph became part of a co-presentation to the rest of the school board with Harold and me sharing the explaining of the graph and answering the other board members questions. All the school board members indicated a willingness to use these graphs as a guide to a potential salary agreement with the teachers that achieved our target of 1 percent new money plus increment for the settlement.

The 1 percent total new money raises beyond increment each year for five years if applied correctly to smooth out the anomalies in Mt. Mason’s salary schedule would allow our salary schedule to line up with the average plus 4 percent line on the graph in five years, which is where we expected the other local districts average to be in five years. 

Now we had to work on the more difficult issue of health insurance. We had to identify our specific goal for health insurance and we had to do it before I met with the teachers’ union bargaining team. The legal restrictions on bargaining with employee unions prevent adding new issues or “changing the goalposts” with adjustments to financial or other targets after the negotiations have commenced.

“How much will the 1 percent in additional salary costs total each year? Is it more than we’ll save with health insurance?” Helen Anderson wanted to know. I chose my words carefully because I didn’t want to offend anyone. I knew the district was wasting far more on health insurance than they were saving on salary increases by not settling this contract.

The total annual teacher salaries for the district were about $12 million. One percent of $12 million is $120,000 so for us to come out even we have to save at least $120,000 a year on health insurance plus the cost of this year’s mid-year raise and any one-time off-schedule payment and I’m certain we can do that,” I replied.

As we ended our executive session conversation on salaries for teachers I knew it was a good time for a discussion about another key aspect of our negotiations strategy.

“We need to settle salary and health insurance with the teachers first then we can work out the same basic things with the support staff and the administrators. Their unions are the tail to the teacher union dog. They won’t hold out for larger raises or a better deal on health insurance once they see the teachers’ settlement,” I said.

Setting realistic goals for teacher contract provisions on health insurance would require research on the costs and teacher contributions for health insurance from the same 10 neighboring school districts we were using to measure teacher salaries

It’s the health insurance, stupid

When I started my first job as school superintendent in Albany, NY, in 1997, like many rookies who gained their primary educational leadership experience as principals, I knew next to nothing about school district budgets, school labor contracts and employee health insurance costs and options.

I had lots of experience in all of the intricacies of academic requirements and improving student test scores, developing teacher classroom effectiveness, school schedules and school building budgets. Unfortunately, I had to learn a whole new set of financial skills in short order and in the hardest way of all, while under the gun in multiple difficult labor negotiations with entrenched and politically powerful unions. Any mistakes in my journey along this tricky path would potentially result in financial catastrophe or major labor unrest for our school district.

One thing that helped me immensely as I moved along this precipitous and dangerous learning curve was an outstanding (and expensive) school attorney, named Jeff Honeywell.

As we stumbled our way through a complicated and confusing thicket of information that few school superintendents understand when they take on their first position as superintendents, we became as much good friends as we were work colleagues. I sought and valued Jeff’s advice for 20 years after our initial time together in Albany. (And still recommend him today when I know needs legal help.)

Jeff Honeywell is a one in an army of high priced attorneys specializing in school district law located all over New York State and in the other high cost-per-pupil states.[xxii] These attorneys and their firms are frequently organized into groups of super specialists: one who handles complicated special education issues; another who handles environmental issues; another who deals with charter schools; another who handles school construction; another who handles school district bonds.

Every one of these specialists charges several hundred dollars per hour for their services and in a districts the size of the City School District of Albany in 2016 with a school district budget of roughly $200 million, the total legal fees approach $400,000 – $600,000 or more annually.

So when we think of the extra costs associated with public unions that serve school districts we should not forget the money we pay to lawyers who give superintendents essential help in resolving labor contracts and other thorny legal issues that are much more complicated in states with strong public unions.

To my knowledge, gains in student learning have never been shown by research to be positively linked to increased legal expenses for a school district.

When I arrived in Albany in 1997, the teacher union negotiations had broken down and there was a total lack of trust on both sides. Our school district negotiating team consisted of myself, Jeff Honeywell, our excellent school business official, John Paolino, and two effective school board members, Theresa Swidorski and Barbara Gaffuri.

All were honest to a fault and professional in all their interactions as members of our bargaining team. However, every time our school district team provided carefully researched salary and health insurance data to the teachers’ union negotiating team, the teachers challenged the data as inaccurate and inflated.

Despite the fact that our data was based on actual payroll data and verifiable health insurance bills, the teachers’ union representatives on the negotiating team or their NYSUT (New York State United Teachers, state level union) labor relations specialist challenged the data and called it untrustworthy.

After extended arguments we were able to resolve our concerns about salaries, but we could not find a strategy whereby the union team would accept our data regarding health insurance without a challenge.

The stumbling block was the existing and expired teachers’ contract that continued in force at that time due to the Triborough Decision. The existing teacher contract required that the teachers make zero percent contributions toward their health insurance and provided teachers with a very expensive “Cadillac” Blue Cross Blue Shield Matrix plan. The Triborough Decision meant the teachers’ zero percent contributions for their expensive Blue Cross health insurance would continue until a new contract was settled.

The annual health insurance price tag for members of the teachers’ union stood at $10.2 million per year and was expected to go up by more than $1 million for the next school year. With more than three quarters of the teachers getting step raises and all teachers contributing zero percent for the expensive health insurance they expected to keep, the teachers’ union had little incentive to settle a new contract.

The teachers’ union bargaining team had drawn a line in the sand at zero percent contributions on Blue Cross Blue Shield for teachers and refused to believe it was really costing us as much as we said it did.

They wouldn’t back down and we couldn’t afford to continue with no contributions by teachers given the annual expected health insurance inflation rate of five to ten percent a year at that time. We were requesting teacher contributions of five to ten percent on these premiums, but we couldn’t even hold a realistic discussion about contributions until we agreed on the actual cost of health insurance.

For many months in our negotiating sessions the teachers’ union claimed they didn’t believe our health insurance numbers no matter what we did to reassure them at the negotiating table. They continued to “disbelieve” our numbers long after such disbelief became clearly untethered to any version of reality.

In New York State, public unions and their employers are supposedly required to negotiate in “good faith” which means lying, stalling and changing your demands during the negotiating process are verboten.

Of course PERB (Public Employees Relations Board), the government unit charged with implementing this cumbersome system, is in my view, a toothless tiger. The worst I’ve seen them do is issue a judgment that becomes a bad public relations piece in the newspaper and then goes away.

So they could do nothing to make the teachers’ union stop saying our numbers were wrong.

In any case, our school district bargaining team decided on a new strategy. We called their bluff. We would give the teachers’ union the $10.2 million we were spending that year on teacher health insurance and they could buy their own insurance with a bid by local health insurance providers.

If they really believed what they were saying about our health insurance numbers being inflated, they should be able to buy the insurance they wanted to keep (their very expensive Blue Cross and Blue Shield Matrix Plan) and still not have to require a health insurance contribution from the teachers. If we were right (and we knew we were), we could pocket the inflationary savings in lieu of a teacher contribution toward the cost of their health insurance.

Finally, the contract settled with this provision in place. A few months later we held the bid for teacher union member health insurance. Two local providers, Blue Cross Blue Shield and a local network called MVP submitted bids. Blue Cross Blue Shield bid $11.4 million, $1.2 million more than MVP’s $10.2 million. To keep their zero percent contributions by teachers for their health insurance the teachers’ union would have to switch all their members to the less expensive and less desirable MVP plan. I was feeling good about the fact that our cost numbers had been proven honest, that we had saved $1.2 million and that the teachers’ union would be eating some well-deserved crow when they told their members about this difficult choice.

Then I received a surprise call from Blue Cross Blue Shield. They were reducing their bid amount by $1.2 million to $10.2 million. My reaction: “Can they even do that?”

I immediately called Jeff Honeywell who explained to me that yes they could reduce their bid and that I should accept this lower bid because not accepting it would just make all of our teachers change health insurance plans with no financial gain for the district.

It was then that I realized that Blue Cross Blue Shield had always been charging our school district far more than the fair market price for our teachers’ health insurance. Later I received a call from the MVP representative who said she expected things would go this way all the time. I was the only one in the dark on how this bid would play out.

Blue Cross Blue Shield knew our teachers didn’t want to switch plans. They understood the difficulty of the school district’s negotiating position with the teachers’ union. They padded the insurance bills for years because of our weak bargaining position.

This pattern exists in all school districts and particularly school districts in states with strong public unions. The school districts pay top dollar for almost everything from bank services (local politics requires the selection of a local bank) to school construction (better work out a project labor agreement with the construction unions, which will mean higher construction labor costs and construction bid prices to avoid costly delays) to fire and liability insurance (better give the bid to a local firm) as local politics, legal fees and union pressures come to bear on almost every item in the school budget.

Lesson learned: It’s just as important to look at the specific health insurance plan and what you’re paying for it as it is to focus on the percentage employees are contributing toward the plan. That was true in Mt. Mason as well.

An above average school district

When Tom Garrigus came to me with a summary of the health insurance costs for the 10 area school districts, I had already received some data from the local BOCES (Board of Cooperative Education Services) that made me suspicious. Our real problem, I realized, came from the district’s very high health insurance cost and not the teachers’ salaries which were close to the regional average.

The 25 school districts in the local BOCES consortium included some smaller urban districts with 3,000 to 5,000 students, some smaller suburban school districts with 1,500 to 3,000 students and some very small rural school districts with between 500 and 1,500 students. In this 25 school district mix, the highest per pupil cost for health insurance belonged to Mt. Mason at $3,924 per pupil.

Mt. Mason was 43 percent above the average for these 25 school districts. The average per pupil spending on health insurance for these 25 school districts was $2,750 per pupil, which meant $2,750 of the cost per pupil went to district’s health insurance bill. If Mt. Mason was spending the average amount per pupil on health insurance, the overall budget savings would be $2.5 million per year (15 percent less on the local property tax rate).

In fact, my paper copy of old state level figures from two years earlier had Mt. Mason listed at the 99th percentile in health insurance expenses per pupil among school districts in the state. With Tom’s summary I was able to easily diagnose why:

         Teacher Health Insurance Costs for Mt. Mason and 10 Neighboring
School Districts based on 2015 numbers

District Total Cost for Family Plan Total Cost for Individual Plan Cost per Teacher Including mix of Individual, 2 person and family plans Teacher/Employer Health Insurance Cost share split Health Insurance Cost per pupil including retiree health insurance
District A 18896 7369 15595 20/80 2611
District B 16448 6415 13576 15/85 2461
District C 17755 6924 14680 15/85 2611
District D 16448 6415 13576 20/80 2317
District E 16257 6340 13441 15/85 2437
District F 17755 6924 14679 12/88 2754
District G 18211 7102 15056 20/80 2568
District H 19224 7497 15894 18/82 2780
District I 20156 7860 16665 15/85 3020
District J 17405 6787 14390 10/90 2762
Mt. Mason 22179 8649 18338 0/100 3924
Average for 11 Districts 18248 7116 15087 14.5/85.5 2750

Checking the math on the figures in Tom’s chart I found out that if we could get just the teachers to shift to a new health insurance plan that cost the region’s average of $15,087 per employee from the very rich plan they had now which cost the district an average of $18,338 per employee we would save the district (18,338 – 15,087 = 3251, 200 X 3,251 = 650,200) $650,200 annually.

If the teachers moved to this new health insurance plan and contributed 15 percent of the cost of their health insurance the district would save (200 X 15,087 X .15 = $452,610) $452,610 annually.

That meant we needed to go after both. We needed to move the teachers into a cheaper plan and get them to contribute toward their health insurance, as both would be important to the long-term financial health of the school district and would create an annual savings of $1.1 million ($650,200 + $452,610 = $1,102,810), money that could be invested into a results-oriented academic program and offset the increase in salaries we had to offer to get the health insurance change we needed.

If we could get the support staff and administrators to make these same changes with their 100 employees, we could save another $551,405. And if we could get future retirees to also switch to the cheaper plan and contribute toward their health insurance we could recover the $2.5 million.

Existing retirees will eventually die and be replaced by new retirees who will have the less expensive plan, projecting savings for the district. The economics of actuarial science.

Anyone who has dealt with these issues realizes that convincing employees to shift to a new and less expensive health insurance plan is not easy. Employees (especially those who will soon retire with health insurance fully paid for by the school district) are understandably concerned that in an effort to save money the school district leadership team will push them into a lesser health insurance plan that won’t provide the coverage they need.

In the strong public union states, most employees who retire from the school system including teachers, support staff and administrators are guaranteed health insurance in retirement (this health insurance becomes a supplement to Medicare when the retirees reach age 65), and the cost for this retiree group is a significant factor in the district’s health insurance cost equation.

By law in New York State the quality of the health insurance for retirees cannot be unilaterally changed by their employer once they have retired. And the contribution rates for retirees toward their health insurance cannot be unilaterally changed. A different health insurance plan can be provided to retirees but it must be substantially the same as the plan it replaces.

In Mt. Mason the two other groups of individuals who received their health insurance from the school district besides the members of the teachers’ union included 150 retirees and 100 support staff and administrative employees. We would have to consider their concerns and involve them in the discussion.

By law we could not force the retirees who had retired with zero percent health insurance contributions to contribute. That horse had left the barn and would not be back.

I knew I’d need help with this complicated effort so I made three phone calls. First, I called a labor attorney I knew I’d need to help me with negotiations. I had already mentioned the need for this attorney in executive session with the school board, and they knew I’d be making this call. The attorney I called, Alice Donnelly, was a school district attorney I worked with multiple times in the past. She was professional, reasonably priced and lived near Mt. Mason. I asked her if she was interested in helping me with the union negotiations in Mt. Mason.

“With any other superintendent, no way. I read the papers and I know Mt. Mason is a mess. But with you there, how can I say no.” she said.

I told her Mt. Mason was receiving bad advice on health insurance. I asked her to recommend two or three health insurance consultants who could help us broker the best deal on health insurance for the school district.

“We’ll need a consultant who can talk to retirees and the support staff and administrator unions, plus the teachers,” I said. “I know the law says we can’t change the retiree health insurance quality even if we decide to change the provider so I want your advice on how to proceed without becoming embroiled in contracted legal issues,” I said.

She paused, thinking: “I’ll email you contact information for three consultant groups that have multiple experiences at making this kind of change with unions and retirees,” she said. “They’re groups serving big enough numbers of participants to command good prices from the insurance companies and providers. Who are you presently working with?”

“Alex Karrel, from Summit Insurance Consultin,” I replied.

Alice informed me that Summit had a reputation for taking consulting payments from both the school districts and the insurance companies they’re supposed to be negotiating with on behalf of the school districts. They have lost clients. “As their group size has shrunk, their health insurance prices have increased dramatically,” she said.

I had heard this from other sources. Because the contracts hadn’t settled for five plus years the situation just grew worse over time. The amount Mt. Mason spent on health insurance added up to more per pupil than any other district within 100 miles.

With what we could save in health insurance we could more than pay for a reasonable teacher salary increase with money left over to reduce tax increases and pay for some necessary academic improvements.

“We’ll have questions about pricing and options for community-rated insurance (a rating based on a community’s usage of health insurance) products and pricing rated on our specific group so we’ll need someone who fully understands that part of the business as well,” I said.

“Our group including the retirees is probably younger and healthier than the average school district so pricing rated on our specific group might be the way to go. I’ll send you the school board negotiations goals and the data we have on health insurance and salaries. I’ll also set up a time for us to talk with the school board in executive session as soon as possible. The school board has decided to let me handle the negotiations, but you might have to convince them to add you.”

And, yes, every school district in New York State (733) is doing this kind of negotiations all the time. Imagine every individual Starbucks negotiating its own health insurance contract. Rest assured your cup of coffee would cost a lot more than it does now.   

After Alice and I hung up I called Sally Anselm the teacher union president and set up a time for the two of us to meet to discuss negotiations. She wanted to bring her entire negotiating team.

“Let’s just the two of us meet so we can set a date for a formal negotiations session with everyone including all of our team. I want to give you some data we’ve assembled that will hopefully be helpful for us as we move toward a settlement,” I said.

She paused: I knew this wasn’t what she wanted or had expected to hear. “Alright, but no surprises. I’ll set it up with your secretary,” she said.

Then I phoned Harold Smith and asked him to come to my office so we could review the health insurance data.

“You want me to clean up the data again before you give it out to whole school board?” he asked.

“That’s right,” I told him. “That way we won’t have to do it twice and I’ll get it right the first time.”

Harold came to my office within the hour. After he and I reviewed the health insurance data I made two small adjustments he suggested and put aside copies for our next executive session.

I also explained to him my thoughts regarding the need to change the school district’s health insurance consultant and my suggestion for an attorney to help us with negotiations. Harold hesitated and I could see the wheels turning. He had run the school district negotiations for the past five years. They had accomplished nothing. Now he was relinquishing control of this process to me, a new lawyer he hadn’t met and a health insurance consultant we had yet to hire.

“What if I invite Alice Donnelly to an executive session with you and the other board members where we can discuss the health insurance data and you can get her recommendations. When she leaves, we can discuss whether we should hire her and follow her advice?” I said, sensing his concern.

Harold smiled. “That sounds good as long as we get to meet her first before we decide to proceed,” he said.

When Sally Anselm, the teacher union president, arrived in my office I thanked her for coming and handed her the three-page salary summary sheet and the health insurance summary data. She looked surprised. Sally was a high school English teacher in her fifties with short gray hair and glasses that hung on a lanyard around her neck.

“It’s two summaries. One on salaries and one on health insurance for neighboring districts. Tom Garrigus assembled it,” I told her. “Feel free to ask Tom any questions you have about it. Also, feel free to check Tom’s data by calling your teacher union colleagues in any of the neighboring school districts.

“You should share this with your negotiating team in advance,” I said, “so they understand it. I’d like to get started with negotiations sessions as soon as possible. We should all be working off the same data. I’m only here one year and I want to settle a reasonable contract both the school board and the union can support.”

I handed her a separate page identifying Districts A-J. “These districts agreed to give us all this data on the condition that we not release their names publicly as some of them are also in negotiations,” I added. “I’ll have my secretary get to work on setting up a few negotiations dates.” I said, expecting Sally to leave.

But she had a question. “Who will be on your negotiating team? If Harold Smith is on your team it will not work. We’ve been down that road too many times before,” she said emphatically.

“Harold will not be part of our negotiating team and there will be no school board members on our team,” I said. “We hope to have our team set by next week and have our first negotiating session by October 1st. I am meeting with the school board next week to share this data with them and finalize our plans.”

Sally smiled. “Look, I know we need to make some kind of health insurance change and we’re willing to be reasonable. That health insurance is our only bargaining chip in these negotiations. All we’re asking for is that we’re treated with respect. We’re willing to give these negotiations another try, but I have no patience for Mr. Smith or his loud-mouthed, nasty public attacks on teachers,” she said and turned and left my office.

Health insurance 101

Every school superintendent (and mayor, and town manager, and public university president, etc.) is forced to complete a brand new crash course about health insurance purchasing every few years. Failure to completely digest all the essential assignments in this crash course in a timely manner results in the school district (or city, village, university, etc.) paying much more than is necessary for health insurance for employees and retirees. As the complexity rises a few principles re-emerge with every re-teaching of the health insurance course.

  • First, if you try to do this as one small school district, city, village or university you will have little bargaining power due to your small numbers of employees and retirees. You will need to be part of a larger group.
  • Second, you cannot navigate these choices without professional help in the form of a health insurance consultant who represents a large insurance purchasing group of employees and retirees, knows the players, has their respect and has successfully negotiated recent agreements for clients like you.
  • Third, these consultants make their living by negotiating the best rates with professional negotiators who represent the insurance companies and providers. The health insurance consultants can just as easily turn their negotiations prowess into a big gain for themselves and a small gain, no gain or even a big loss for the school district that is their client. Or the initial big gain for the client can turn, over time if not monitored and adjusted, into a big gain for the consultant and no gain or a loss for the client. The health insurance consultants need careful monitoring and regular audits and checks.
  • Fourth, because of changing laws, prices, and contracts the target of the best health insurance at the lowest cost is always moving. Sitting still means health insurance consultants, health insurers and health providers will take advantage by raising rates more than health insurance purchase prices and actual health provider price inflation requires. Any school district like Mt. Mason that stuck with one health insurance provider and consultant arrangement long past its expiration date is certain to be paying top dollar for a defective product. The providers, insurance companies and health insurance consultants know this and make a lot of their money off unknowing school districts.
  • Fifth, the employees and especially the retirees will not want to change their health insurance to follow the moving target. Changing health insurance is guaranteed to be a huge hassle for employees and retirees and always brings the understandable and all too frequently reasonable fear that quality will decline and doctors and other providers and essential drugs will disappear from approved lists or become too pricey to purchase. Making the necessary changes in health insurance will require lots of education for all the participants and sound selections regarding health insurance consultants and health insurance plans. And it will take enormous amounts of patience and school district leadership time.
  • Last, a key to getting this education to work effectively with employees and retirees is to have them share substantially in paying for health insurance. If they have “skin in the game” they will be more interested in learning all the intricacies and be willing to shift insurance companies when necessary.

So the superintendent who decides to do the right thing and look at the options for a new health insurance arrangement is stepping into a gator filled Florida pond. But s/he has no choice unless s/he is willing to let her school district pay more and more and more for lower and lower quality health insurance.

The lawyer sets the stage

I met Alice Donnelly over a simple sub shop dinner for half an hour in advance of our school board session and I told her about the obstacles she could expect to encounter.

At the session, I started handing out the health insurance data and explaining it with the help of Harold, doing my best to keep his ego in check by sharing the stage with him. I had created a small packet that included the school board final goals for the teacher negotiations, the three-page salary comparison graphs and data and the health insurance comparison data.

When I explained the health insurance data, Harold jumped in to note his preferences. “See those districts with 20 percent contributions by their employees. That’s where we should be.” Harold said.

“The average for these 11 districts is 14.5 percent contributions,” I told them. “Remember, our goal is that we get a health insurance contribution close enough to the area average that our total cost for teacher salaries and health insurance, including the teacher salary increment cost of 1.4 percent average, increases by no more than 1 percent of the salary base cost per year.”

Immediately after this I introduced Alice to the school board, but before I could describe the key role I foresaw for Alice, Harold interrupted, as much to show his manliness as to ask a real question.

“Alice, why do we need to spend $200 an hour for you to get involved in negotiations? Why can’t Lonnie do this himself with the help of our local attorney who costs half as much?” Harold barked, as his sycophant supporter Doug sat smirking beside him.

Alice smiled at the obvious attempted provocation. “Lonnie is very experienced and will lead your district to a successful negotiations conclusion. I’m a contracts expert, and if someone with my skill set is not there at the negotiations table the final agreement will probably miss some of the critical details in the actual contract writing and the grievances and continued labor strife will follow. Also, I have a lot of experience settling contracts in districts with a history similar to Mt. Mason’s. I’m certain that experience will be helpful.”

Harold stopped and considered this new information.

Harold’s pause gave Helen Andersen, the gray haired woman on the board majority, time to jump into the conversation. “Why can’t our regular attorney, Jack Bulloch, complete this as part of what we are already paying him to do?” Helen asked.

“Excellent question. I know Jack. He’s a great guy and good attorney, but he has never settled a teacher contract like this and he has tried to help you do that repeatedly over the past five years. I spoke to Jack before this meeting and he thinks as do Lonnie and I that a new face for the district at the negotiations would help get a fresh start and move toward a conclusion faster and more amicably.”

“Given your experience do you think we can achieve our negotiation goals in the packet we just received?” asked Tabitha Conners, the obvious leader of the school board minority.

“I think your goals can be achieved, but it may take some time. Probably several months.” Alice answered.

Then came a question Alice and I had rehearsed during our sub shop dinner.

“After looking at the health insurance data and getting our history on health insurance how do you think we should proceed so that we can get a better price on health insurance for our employees and retirees? “ I asked.

Alice looked around the room. “When we had a similar problem in Allenville we created a formal Request for Proposals from health insurance consulting firms to manage the health insurance purchases of the school district.

“We invited all the unions and the retirees to a session with the school board to participate in interviews of all the responding firms. Then after interviewing all the participants and discussing the interviews with all the unions and retirees the school board selected one firm from the group they had interviewed for a contract.

“The firm met separately with the school board and superintendent and also separately with each union and separately with the retirees to understand the concerns of each stakeholder group. Then they made recommendations to the school board at a public meeting regarding changes in health insurance for the school district,” she explained.

Harold Smith pounced immediately. “So, you’re recommending we hire another high priced consultant for health insurance?” he asked, shaking his head.

Alice, remained calm and her voice showed no emotion. “Your school district is already paying a health insurance consultant. The company is Summit Insurance Consulting, and I believe you’ve met their representative, Alex Karrel,” she said.

Harold was not taken aback by his obvious error. “Yeah, we met him. Another empty suit as I recall and you and Lonnie are telling us he hasn’t been doing his job, right? How do we know another one will do any better?” he asked, obviously frustrated and just as obviously play acting his Grumpy Old Man routine to impress Alice and the other school board members.

“You’ll get to interview all the RFP respondents and listen to all the input from the unions and retirees and hear my recommendation and Lonnie’s before you decide who to choose from among the firms. Summit Insurance will most likely submit a proposal so if keeping them makes the most sense you can do so at that time.” Alice answered.

“Well, we better not do anything to hurt those retirees. They’re important people in our community,” Harold said.

Many of Harold’s votes in the school board member election came from senior citizens including retired school district employees. Harold like many school board members railed about both health insurance company rip-offs and high school property taxes AND about not hurting retired employees who enjoyed their expensive health insurance benefits. The same retirees voted for Harold to protect their over-priced benefits.  

Harold decided he needed to be on stage again. “How much will this cost us? We know that you’re expensive at $200 an hour. Jack only charges us $100 an hour. How many hours of your time will this take?” he asked.

Alice had expected this question and her answer was smooth and confident. “In Gloversville, we settled in six months and it cost the district 60 hours of my time or $12,000. In Rome, it took two years and 125 hours of my time or $25,000.

“Your situation has been difficult, but Lonnie is only here one year. We need to get this done promptly. Both sides are motivated to settle and this data on salaries and health insurance plus the school board’s goals which are reasonable give us a good chance for a relatively quick settlement,” Alice said.

Alice left and immediately after she was gone Tabitha Conners turned to the other school board members. “She’s a professional who knows what she’s doing,” she said. “She’ll help us get this done properly and quickly. I told you it was a mistake to hire Jack Bulloch. He’s a real estate attorney.”

Harold rose to the bait instantly. “Jack Bulloch is an excellent attorney and he’s saved the district money every year with his lower fees. These school district attorneys charge way more than they’re worth,” Harold said with equal contempt.

I jumped in hoping to return to the task at hand before we had an explosion of egos. “We can talk about long-term attorneys some other time. For now, let’s agree to hire Alice for negotiations at $200 per hour?” I asked.

The board members all nodded with Harold glowering and Tabitha chuckling.

“I’ll put it on the agenda for our next public meeting,” I said. “Let’s move on to the health insurance data discussion and how we should proceed with that issue.”

Tabitha Conners held up the health insurance summary sheet. “If I’m reading this right, we would save even more if we could convince the teachers union to agree to a cheaper plan than we would by increasing employee contributions for health insurance,” she said.

“If the 200 members of the teachers’ union switched to an average cost plan, the district would save about $650,000 per year. If we can convince the 100 support staff and administrators to make the same switch, we could save another $325,000 a year,” I said.

Tabitha hesitated while doing some quick math in her head and Helen Anderson jumped in. “What about the retirees, can they switch plans?” she asked.

“The retirees must be allowed to keep the same insurance or be offered an equivalent insurance plan at the same price. We can’t force them to switch. Offering them a different but equivalent plan would require legal advice and help from the health insurance consultant Alice mentioned earlier. It’s tricky but doable. If we work all that out and if the retirees switched to an average cost health insurance plan, we would save another $487,000 per year. So, the answer to your question is – yes!” I said.

Harold couldn’t stay out of the conversation for long. “Yeah, but what about contributions for health insurance from the employees? That’s what we really want,” he barked.

“If the teachers contributed at the average rate in our region, 14.5 percent, the district would save an additional $550,000 per year. The support staff and administrators contributing at this rate would save the district an additional $225,000 per year. We can’t ask the present retirees to contribute because by law their contribution is set at the rate it was when they retired which is zero percent. But we should work at getting future retirees to contribute at these same rates,” I said.

Tabitha’s calculations were complete in her head. “So if we get the unions to agree to all these health insurance changes and we get them to agree to the salary raises of one percent plus increment, we’ll save about $1.5- $2 million a year on health insurance and we’ll be spending $150,000 more each year for teacher salaries? Nice work Harold. Why’d we wait five years to do this? That was really stupid,” she said with glee.

Harold immediately went on the offensive. “Those damn teachers wouldn’t agree to change their health insurance or accept reasonable wage increases,” he barked. “We offered them and they said – no! I told this board and three different superintendents these unions were killing us with their health insurance and nobody did anything. So don’t blame me,” he bellowed. 

I tried to cool things down by speaking softly. “Listen, we can’t let these issues or the unions divide us. We have our goals and if we stick to them we can be successful with these negotiations. There will be no gains made by trying to blame each other for problems in the past. We need to move forward.” 

The room was silent. Tabitha was smirking. Helen was trying to suppress a smile and Harold was scowling. The other school board members didn’t make eye contact with me or with each other.

I wrapped it up. “I will let you know when we’ve scheduled our first negotiating sessions, and you’ll see our contract with Alice and the dates for the health insurance consultant RFP interviews she discussed in your next school board packets for action at our next public meeting,” I said. And we adjourned.

“Working with a school board is like herding cats,” a school superintendent colleague of mine once told me.

“More like herding bees,” I told him. “And eventually one of them will sting you.”

As I drove home that night I couldn’t help but think of all the wasted money that had gone to health insurance providers and health insurance consultants from Mt. Mason and many other smaller and larger school districts across the state and the country. And it wasn’t just health insurance that gobbled up the critical funding that should be going toward improving educational outcomes for students.

Where has all the money gone?

Measuring the impact, Part II

The United States has increased the amount we spend on K-12 education exponentially[xxiii] and yet we’re bombarded daily with news articles and opinion pieces highlighting the fact that almost all academic testing and other school performance data (National Assessment of Educational Progress, SAT, high school graduation rates, state Common Core test results, etc.) has remained flat.[xxiv]

Where has all the money gone?

It’s gone to teaching employees and more important to their health insurance and pension benefits, especially in high cost, union-strong states.[xxv]

The U.S. average ratio of pupils to teachers has increased 40 percent since I started my career in 1970 from 22.3 pupils per teacher then to 15.9 pupils per teacher now, according to the National Center for Education Statistics.[xxvi]

In 1970, there were almost four and a half (4.483) teachers or other professional educators for every 100 students. In 2013, there were more than six (6.289) teachers or other education professionals for every 100 students. ((6.289-4.483)/4.483 = .403 (40 percent)).

  • States with stronger unions (NY, NJ, MA, IL, CT, RI, NH, DC, and VT) – high cost states – have the lowest pupil-to-teacher ratios, with 12.0 pupils for every teacher.[xxvii]
  • States with weaker unions (UT, SC, AZ, ID, NV, OR, TX, and AL) – low cost states – have higher pupil-to-teacher ratios, with 18.4 pupils per teacher.[xxviii]

High cost states have 84 percent more teaching employees per pupil today than they did in 1970. (Forty percent increase in teachers is the average between low cost and high cost states.) In 2013, the strong public union high cost states had 8.3 teachers per 100 pupils ((8.3-4.5/4.5) =.84), up from 4.5 teachers or other professionals per 100 pupils in 1970, an 84 percent increase.

States with weaker unions had only a 20 percent increase in teachers – growing to 5.4 teachers per 100 pupils ((5.4-4.5/4.5) =.20).

Yes, the test scores in low cost states are lower but not that much lower.

One might assume more teachers were added due to increasing enrollments in the schools, but the total K-12 enrollment (46 million K-12 students at the height of the baby boom) dropped significantly in the 1980s. It’s rebounded but, today, isn’t much higher than it was in 1970 (48 million).[xxix]

And pupil-teacher ratios are not impacted by the number of students if the number of teachers changes comparably.

The real reason for the lower pupil-to-teacher ratio is we’ve added teachers in special education; English as a second language; the arts; remedial education; and vocational education. We’ve also added teachers to reduce class sizes.

And the frequently publicized increase in special education programs, in general, underestimates the expansion in the true cost of special education which is significant. Those expenses are part of the overall operations budget and aren’t included when we see a normal break-out of special education expenses. Those costs are considerable when you factor in salaries, health insurance and pensions for teachers, teaching assistants, teacher aides, school bus drivers and school bus aides, school bus purchases, maintenance and operations expenses and expanded private program tuition for students with severe disabilities.

Special education expenses for teachers, teacher aides and teacher assistant salaries and for tuitions for special education students placed in programs outside the school districts grew from 4 percent to 17 percent of a typical school budget between 1967 and 1991, according to the Economic Policy Institute.[xxx] And, the cost per pupil was much higher in 1991 than it was in 1967.[xxxi]

And special education expenses didn’t stop growing in 1991. A better estimate with all the changes is that special education costs account for 25 percent (my estimate) of school districts’ much larger budgets in 2015. If special education employees are 25 percent of the district’s total workforce, they comprise 25 percent of the district’s entire health insurance bill. The same applies for pension costs, the employer’s share of Social Security costs, etc.

Our lack of progress in improving test scores means it is imperative that we put our money into things that improve student achievement. We have 30 of 40 years of experience that shows that special education expenses have not had an impact on academics, results proving that greater investments in special education will not improve academic results.[xxxii]

Special education has become more of an academic crutch and a financial anchor for schools than anything else. All heart and no head.

In fact, districts that spend more on special education show the worst results. And as we put more and more resources into special education it becomes self-perpetuating; the “solution” for students who can’t read becomes – put them in special ed.

As the number of special education teachers, teacher aids and teaching assistants has increased so have the number of students identified as needing special education services in the U.S. (Which came first, the chicken or the egg?)

Between 1976-77 and 2009-10, the number of students identified as needing special education services grew from 3.7 million to 6.5 million while the number of students classified as “learning disabled” grew from 800,000 to 2.8 million during the same years.[xxxiii] The total student population stayed roughly the same during these years.

In 1969-1970 there were 57,000 teacher aides in schools in the US. By 2009 this had grown to 737,000 teacher aides in U.S. schools.[xxxiv]

Teacher aides work as one-on-one aides for special education students who need toileting, feeding and help with mobility in classrooms and on the bus.

Meanwhile, teaching assistants, who in New York State are now required to complete two college courses, also have been added under the special education banner.

More subject specialist teachers (computers, art, music, vocational education, Advanced Placement, etc.) at the elementary, middle and high schools have also contributed to lower pupil-to-teacher ratios. Also, most districts decreased class sizes initially at their elementary schools and later at their middle schools and high schools. Lastly, many districts added English language learner programs and additional staff to accommodate programs to better serve immigrant students.[xxxv]

Some of the additional staffing was retrenched slightly during the 2008 financial meltdown and the resulting hard times for school districts as many districts lost state financial aid. But recent trends show the additional staffing coming back to schools as the states again add to their budgets with restored state aid lost during the recession.[xxxvi]

Again, the addition of these jobs hasn’t produced any significant positive impact on academics as measured by internationally recognized tests.

You can put as much money in that special education pot as you want but you won’t get any better results. When medicine changes its procedures, surgeons are not viewed as though they failed. The surgeon did the best s/he could with what s/he knew. If there’s a better way to do it, there’s a better way to do it.

Today vs. 1970

Everything related to adding more teaching staff has added to the unsustainability of school district budgets in more ways than one. In 1970, a typical family health insurance plan cost about $700 annually in a high cost state and $400 or less in a low cost state. Employers in high cost states paid the full amount. In low cost states some school districts paid the full amount and others paid as little as nothing toward health insurance.

With the normal inflation factor of 6.46 between 1970 and 2015 the high cost state $700 policy would be expected to increase to $4,522 in 2015. In low cost states the average district health insurance expense of $250 per employee with normal inflation would be expected to increase to 6.46 X $250 = $1615.

But as close as I can estimate after looking at several sources, the cost of the same typical family health insurance plan without deductibles and with smaller co-pays (similar to those in place in 1970) today is $20,400[xxxvii] in high cost states. In low cost states school districts have generally opted for lower cost high deductible/high co-pay plans that cost about $14,000 per year for a typical family plan.

And health insurance is sometimes more expensive in low cost states. Many rural areas have limited health insurance competition and few health care providers so – supply and demand drives prices upward even more sharply.

Fewer options mean school districts in many rural areas see a greater percentage of their budgets focused on health insurance. While more expensive and elaborate health insurance plans are found in school districts in the high cost states, some school districts in the low cost states are paying high rates for much less comprehensive coverage.

Most school districts in low cost states have moved their employees and retirees to high deductible/high co-pay health insurance plans similar to those found in the silver or bronze level on the Affordable Care Act websites.[xxxix]

Not so in the high cost states where schools like Mt. Mason are still paying for Cadillac plans.

Negotiations 101

When we exchanged our negotiating proposals and sat down for our first negotiating session with teachers in mid-October, I was a little uncertain what to expect. I felt good about our team: Tom Garrigus, our business official and numbers guy; Alice Donnelly, our professional negotiator; and myself.

I felt confident about our proposal, which included the graphs and data for salaries and health insurance comparing Mt. Mason with ten neighboring school districts.

Our proposal included:

  • the school board approved salary offer (1 percent new money each year above the step raises built into the existing salary schedule for a five-year contract with no retroactive raises for the five years the district had been without a contract)
  • moving the district’s teacher salary schedule closer to the 11 district average line plus 4 percent over the five-year period. (This extra percent per year meant we would be aiming to hit the area average teacher salary five years out assuming the region continued to give teachers raises averaging 1 percent.)
  • shift the active teachers into a new and much cheaper health insurance base plan (the old plan would remain available at an extra cost to teachers who wanted to keep it by paying the entire difference)
  • teachers contribute toward the cost of health insurance in increasing increments of 5 percent for each of the last 4 years of the contract (5 percent, 10 percent, 15 percent and finally 20 percent).

The latter was designed to work out so that in all years, all teachers’ raises in salary would exceed their increased contribution to their health insurance.

Our proposal also suggested we form a committee with all the unions and the school board to select a new health insurance consultant the school board would appoint. This mutually agreed upon consultant would help us select our new health insurance base plan.

My uncertainty came from what to expect in the teachers’ proposal. My concerns about Sally Anselm’s reputation as a difficult negotiator was partially put to rest when I saw that the NYSUT (New York State United Teachers union) representative assigned to help with these negotiations was Charlie Stafford a NYSUT representative I had a decent experience with in the City School District of Albany.

Then I looked at the teachers’ proposal. They were asking for 5 percent new money per year (that would mean 25 percent more over five years), no changes to health insurance and in place of a retroactive raise for the five years the district had been without a contract a lump sum payment equal to 10 percent of each teacher’s salary.

The five teachers on their team smirked almost in unison when I asked Sally Anselm, the teachers’ union president, if I understood their proposal correctly. We were miles apart. I asked for an opportunity to caucus and discuss their proposal with our team while they did the same with their team and our proposal.

Once we were alone I asked Tom Garrigus if he could add the final year salary the teachers’ proposal projected to the simpler graph we had proposed in their packet which showed the teacher area average salary plus 4 percent. Tom said it would take him a few minutes and when he was done 15 minutes later we went back and showed what he had created to the teachers’ negotiating team.

Mt. Mason Teacher Initial Salary Proposal

  no. 4

We shared the graph, explained what it meant and shared the data behind the graph.

“Mt. Mason is too small a school district to set the labor contract norm for teachers in our area,” I told them. “I’m here for one year and you are not obligated to settle your contract with us in that time period. But given your history there’s a good chance that if this contract isn’t settled this year it may not settle for many years to come.”

I explained to them that Mt. Mason teachers shouldn’t be paid significantly less or more than neighboring district teachers. Their health insurance plan also should cost about the same as other districts in the area. And they should be contributing towards their health insurance at about the same rates as other teachers in the area.

Then I spoke with the best sincerity I could muster. “I’ve convinced the school board that we need to look at the local norms to settle this contract,” I said. “If you want a significantly better deal than the local norm on salary and health insurance you’ll need to wait for the next superintendent to tackle this negotiations process. Your salary offer is clearly well outside the parameters we have for these negotiations. Please reconsider it. I suggest we adjourn for today.”

As I gathered my papers and we broke up the NYSUT representative, Charlie Stafford, signaled me silently to follow him to an adjacent room.

“Look, these guys are used to playing hide the ball and dealing with a school board that lies to them and treats them disrespectfully in private and in public,” he said. “I think we can work this out because your offer is reasonable. Give me a week or two and I’ll call you about another meeting.”

I nodded and smiled. “Charlie, I’m sure you’ll try to do your job, but we need to move quickly. I have two other contracts I need to settle this year.”

When the school board met in executive session the following Tuesday, Harold was just about singing when he heard what had happened.

“See, I told you these teachers were real bastards,” he said. “They’ll never settle this contract. You’ll see,” he said with a combination of venom and joy.

The following day, Charlie Stafford called. “We have a new salary proposal for your team to review. How soon can we meet?” he asked.

Eight days later we were all around the same table again, and Sally Anselm handed me a copy of our proposal with handwritten notes on the side. The notes said:

  • increment plus 2 percent per year on salary
  • okay to hiring a new health insurance consultant
  • okay to health insurance base plan idea as long as teachers have some control over what new plan we buy
  • active teachers move to new base health insurance plan or they pay the difference in cost from the base plan if they stay with BC/BS
  • retired teachers don’t have to make any changes
  • health insurance contributions of 2 percent, 4 percent, 6 percent and 8 percent for active teachers
  • zero percent contributions in retirement for teachers who retire during this contract
  • a one-time payment in place of retroactive raises equal to 3 percent of salary.

We all looked at the notes and I realized our team needed to agree on how best to respond. I wanted to hear what Tom and Alice had to say.

“This is a good starting place. I want to meet with our team separately to discuss how we can best respond. This may take us an hour or so,” I said, as respectfully as possible.

When the three of us were in Tom’s cramped office with the door shut, Tom spoke first. “This is the best proposal from that union we’ve seen in six years. The health insurance concessions in their proposal will put us in the black for sure even with lower contributions and 2 percent plus increment salary increases. This is a huge gain for the district,” he said.

Alice was sober and thoughtful. “I think we can stretch their health insurance offer a bit. I sense that they would bend more as long as we link it to the area average. They should be contributing more for health insurance, and we need to get the retirees contributing for their health insurance also.

“Let’s go back with 4, 8, 12 and 16 percent, and retirees contribute at the rate in effect when they retire,” Alice said. “This becomes a bit of a retirement incentive. It also shows movement on our part so they know we’re listening to them. It also moves us closer to the area average.”

“With the base plan we want and the contributions by teachers that I’m suggesting we’ll be saving $2,500 per teacher per year compared to what we are spending. The extra 1 percent on salary they are asking for beyond what we offered amounts to about $600 per teacher per year above what we offered.” Alice said.

I knew we could hit the school board’s target if we accepted their offer, but I thought we could do better.

“Even with the cumulative effect of adding salary raises over five years we were still well ahead. The problem was the top step teachers. Two percent per year for them for five years will make that right hand end of the graph, which is already too high, stick out like a sore thumb.

“And our school board does not want retroactive raises and this one-time, off-schedule payment smells like a retroactive raise but it won’t affect the salary schedule,” I said.

We all sat quietly. “What if we said to them that we can agree with increment plus 1.75 percent so that it moves every step on their schedule as close as possible to the area average line,” Tom said. “That would force them to face the fact that their top step teachers are paid more than they should be. And it would force them to do the math which I am not eager to tackle.”

I laughed. “I knew there was a reason I brought you along on this team. Sounds good to me. Alice?” I turned to Alice. She smiled and nodded.

“The one-time off-schedule payment is the way NYSUT has been handling districts that haven’t settled for a long time around the state. In the end, we’ll have to give in on that to some degree. If Tom can find the money in this year’s budget to pay for it, I suggest we go back with 2 percent instead of the 3 percent they proposed.” Alice said.

“I’m okay with that,” I said.

“Tom, do we have the money?” I asked. Tom nodded and Alice went to work typing up our counter proposal on Tom’s computer. Tom printed copies for members of both negotiating teams.

After an hour we returned to the negotiating room and the teacher team members were scattered about the room, reading their phones, gossiping over coffee and reading the newspaper. After they reassembled Alice handed out a sheet summarizing our counter proposal:

  • Employees pay the difference for any plan more expensive than the base plan for health insurance.
  • They contribute 4, 8, 12 and 16 percent in years two through five for active employees and future retirees (retire with the contribution rate in effect when you retire). Note: We specified years two through five because it’s too late to get this new health insurance plan in place for the present year.
  • 75 percent plus increment on salary distributed so as to best match the area average plus 4 percent line on the graph in year 5 of the contract
  • 2 percent off-schedule one-time payment in place of a retroactive raise.

Alice added in her written counter proposal that the agreement (1) must be approved by positive votes of the school board and the union (2) the new health insurance consultant must be approved by the school board with input from all the bargaining units (3) the base health insurance plan to be in effect for year two to five of this five year contract must be agreed to by the unions and the school board (4) the one-time payment and any retroactive raises the teachers would be getting for the school year that had just started (the first year of this five year contract) would be paid within two weeks of the completion of steps one, two and three in a separate check.

Sally and her team members read our counter proposal carefully. “We’ll need some time to digest this and think about it. We also need to meet and discuss how we should respond. I will call you when we are ready to talk further,” she said in a very formal manner.

It’s the pension costs, too

Health insurance costs for retired employees are as much a concern as they are for present employees when it comes to budgeting. New York State law doesn’t allow school districts, cities, towns, villages or counties to unilaterally reduce the health insurance benefits provided to a retired employee and these costs have increased dramatically as have the number of retirees – and their lifespans – and their spouses are frequently provided with health insurance.

Many school districts are rapidly approaching the point where they are paying for nearly as many retiree health insurance plans as they are employee plans. While retirees over 65 receive Medicare, the insurance plans paid for by the public employers are frequently supplemental to the retiree’s Medicare with retirees’ supplemental plans costing approximately $10,000 a year or more in high cost states. Many districts also pay for all or part of the retiree’s spouse’s supplemental health insurance.

Rising employee pension costs also contributed significantly to the 163 percent of increased per pupil expenses beyond simple inflation in New York since 1970.

In New York State, when I began my career as a teacher my employer, the Albany City School District, contributed a percentage of my salary toward my defined benefit pension. I was not required to contribute anything to this pension system.

I worked in the system for 35 years and I earned 2 percent per year toward my retirement (2 percent X 35 years = 70 percent) so that when I retired, at 55 years of age, I received a pension equal to 70 percent of the average pay I received in my three highest consecutive years of service. The pension monies paid into the system in my name by the four different school districts in the state where I worked were invested in the stock market by a state oversight committee. With the stock market ups and downs this resulted in wildly fluctuating payments into my pension account by the school district where I worked that guaranteed I would receive this “defined benefit.”[xl]

In good years when the pension fund stock market investments were growing rapidly the contribution rate was near zero percent for my employer. In an average year the contributions were approximately 8 – 10 percent of my salary. When the stock market tanked the school district’s contribution rate would soar to higher than 20 percent of my salary.[xli]

After a few years the legislators who had enacted this system in the 1960’s realized they were funding a nightmare and an overly rich pension plan they could never sustain and their solution was to make the employees start contributing a portion of their salary toward retirement but under public union pressure they maintained the defined benefit aspect of the pension plan.

My 1970 plan with zero employee contributions was designated Tier 1 and the employees who followed with ever greater employee contributions became Tiers 2, 3, and 4. Today, the New York Teachers Retirement Fund is totally solvent as are the other support staff and municipal retirement funds operated by the state.

However, the wildly fluctuating employer retirement payments continue to be a planning disaster for all the school districts, counties, cities, towns and villages in New York State.[xlii]

In low cost states the pension contributions have increased but much less rapidly. Most of these states offer defined contribution plans similar to a 401-K plan private employers and employees can utilize. The ups and downs of the stock market and its resultant impact on the future retiree fall on the employee not the employer in these defined contribution pension benefit plans.

It’s a simpler and cheaper system for school districts. The unions that lobbied for and received the richer “defined benefit” plans like the one I have hold on tightly to their hard won benefit.[xliii]

Today, the school districts in states with “defined benefit” public pension systems like New York are contributing up to 21 percent of employee salaries into these pension funds to make up for the stock market pension fund losses during the most recent recession.[xliv]

Some New York state school districts have entered extended payment plans that allow them to reduce these immediate onerous costs by spreading the pension payments out over multiple years in hopes that the employer contribution rates will again decline.[xlv]

In Illinois and New Jersey where the payments to the defined benefit public employee pension funds are by law made directly out of the state budget by the state legislatures and the governors, the recent recession and the political difficulties of raising taxes have resulted in underpayments to teacher pension funds and the threat of pension fund insolvency.[xlvi]

In states where school districts pick up the costs of employee pensions the increases in pension fund expenses has added a cost equal to at least 3 percent to 15 percent of employee salaries for all positions on staff since 1970, according to my best estimate.

In low cost states this pension contribution amounts to approximately $2,000 per employee per year above and beyond simple inflation for positions already on staff in 1970 and approximately $3,000 per employee per year above and beyond simple inflation for all positions added since 1970.

In high cost states with higher salaries and larger employer pension contributions to cover the defined benefit pensions these numbers increase to an average of $5,000 for positions on staff in 1970 and $10,000 per employee for positions added since 1970 above and beyond simple inflation.

Increasing salaries for teachers, support staff and administrators is a factor in the extra increase in per pupil expenses above and beyond CPI inflation found in all states and especially in high cost states, but it is a smaller factor than most of us might expect.

As I noted at the beginning of this chapter starting salaries for teachers in low cost and high cost states are roughly in line with CPI inflation expectations. Median and end-of-career teacher salaries are slightly higher than CPI inflation would predict in low cost states (approximately $5,000 average per teacher higher).

Median and end-of-career teacher salaries in the strong union states are significantly higher than CPI inflation would predict (approximately $17,000 average per teacher higher). But this impact pales in comparison to the 84 percent increase in the number of teachers-per-pupil and the increased cost of health insurance and pension benefits.

Still, none-of-the-above have had any discernible positive impact on student achievement.

Mt. Mason gets a new supporter

Three weeks passed since we exchanged demands with the teachers’ negotiating committee. In the interim I had to listen to Harold excoriate me.

“You’re giving away the store with big raises and no real concessions on health insurance. You have no idea who you’re dealing with here. These people will lie to you right to your face. We never should have brought you to Mt. Mason. This will be a disaster. You’ll see. You promised us increment plus 1 percent; now we’re already up to increment plus 1.75 percent and with a big retroactive raise you said we wouldn’t have to pay. And that won’t be the end. Mark my words.”

Near the end of this interminable three-week hiatus in negotiations, school board member Helen Anderson (typically on Harold’s side) showed up in my office without an appointment.

I was about to leave with my coat on and my briefcase in hand but I invited her into my office and we sat at a small conference table.

“I just wanted you to know that regardless of how Harold votes I will vote to approve this teachers’ contract if you recommend it to us,” she said.

“I joined this school board two years ago when Harold asked me to. He said we needed to make sure these administrators didn’t give away everything to the teachers’ union because it would send our taxes way up. I believed him.

“The dummies on the school board with Harold and the superintendent here at that time were disrespectful to everyone who dared to raise a question. They didn’t have a clue what they were doing. But now I can see Harold is just a big bag of wind who doesn’t know anything. I just want this to be over with so I can get off this school board,” she said.

“I appreciate your support,” I told her, “but remember we have two other employee contracts with the support staff and the administrators that need to be negotiated and settled, a budget that needs to be approved and a new superintendent that will need to be hired when I leave at the end of this school year. I’m hoping I can talk you into staying on the school board until your term ends in June,” I said.

Helen sighed. “I’ll try. But as soon as Harold finds out that I’m on your side he’ll make my life miserable. He can’t let this contract be approved. His whole life revolves around playing with this school district like a cat plays with a half dead mouse and drinking beer with his buddies at the Elks’ lodge where he tells tall tales about what a great leader he is.

“I’m sure you realize he creates all these conflicts to make himself look like a hero who repeatedly saves the day for Mt. Mason. And his buddies wind him up every night like one of those toy cars that run on springs.”

According to Helen, Harold’s buddies laugh when they read about another school board conflict in the local paper.

“I used to think it was funny myself but not now,” she said. “I just don’t want to be part of it anymore. Unlike Harold, I actually have a life and a husband I like to spend time with and hobbies to keep me busy. I’ve had more than my share of this.”

I knew Helen’s perspective was accurate. Her life would be miserable when Harold realized she wanted to settle this contract. Only a sense of common decency and maybe a bit of guilt for Helen who had helped perpetuate this unnecessary drama for the past two years could convince her to hang in there for the rest of the school year and allow me to bring these contracts to some kind of settlement.

Finally, a response from the teachers’ union

The next day Sally Anselm called. I held my breath when I picked up the phone. Were our negotiations about to come to a full stop?

Sally sounded reassuring. “I’m sorry it took so long for me to get back to you, but we’ve been sorting through the math on the salary schedule idea you gave us,” she said. “We had to bring in the high level financial types at NYSUT, but I think we have a solution. The upper end of the schedule for the most senior teachers gave us the most headaches.”

“We struggled with that as well. We weren’t sure how best to solve it. That’s why we left it to you.” I said laughing.

“When do you want to meet?” I asked.

Sally chuckled also. “Our team is available next Thursday after school,” she said.

When our third negotiating session with the teachers began, Charlie Stafford started things off by handing out a three-page summary of their new response to the district’s proposal from the last meeting. It included a graph that looked much like the one we had given them with a big change in the teacher salary request that matched much more closely to the area average salaries plus 4 percent and included raises of increment plus 1.75 percent new money each year for the contract.

The teachers’ new graph looked like this:

Mt. Mason Teachers Contract, 2nd Teacher Salary Proposal

second salary    

 Sally explained the new graph. “Our proposed salaries track the area average plus 4 percent all the way out to end of the schedule where tracking that line would mean our teachers would lose money. With this contract settlement we’re proposing teacher contributions for health insurance and we made sure this new proposal gave them real raises after their health insurance contributions at every step except the top step.

“The raises for top step teachers we are proposing are less than what those teachers will be contributing toward their health insurance. This proposal will bring our top end teachers closer to what we think will be the area average teacher salaries four years out – the area average plus 4 percent line – than they are right now,” She told us.

Tom Garrigus had a question. “So essentially you’re proposing salaries equal to the area average, plus 4 percent, plus an extra $250 for all steps except the last five steps where the where the red line goes significantly above the black line to make certain top end teachers aren’t losing money?” he asked.

“Yes.” Sally replied.

Alice Donnelly jumped in. “If I am reading your proposal correctly you are anticipating health insurance contributions by teachers in years two through five of the contract as 3.5, 7.5, 11  and 14.5 percent, correct?” Alice asked.

“Yes, that brings us to the area average and we would agree to the base plan idea, the new health insurance consultant and your proposal to make retirees contribute in retirement at the rate they were paying when they retired,” Sally said.

“And you are looking for an off-schedule one-time payment in place of retroactive raises equal to 2.5 percent of teachers’ present salaries to be paid this year. And the one-time payment will be made two weeks after we’ve settled on the health insurance base plan and we have formal  approval from the school board and the teachers’ union, right?” I asked.

“Yes.” Sally said. 

Once we were in Tom’s office for our private caucus Alice smiled broadly. “This is a very good proposal. It gives us 90 percent of what we wanted. The raises they’re proposing will put Mt. Mason teachers slightly ahead of the area average. An extra $250 raise per teacher over five years per is very little.

“Their extra ask on the one-time off-schedule payment is only about $300 more than what we offered. With the health insurance give backs they need to be able to claim victory somewhere and this will give them that cover. They can say Mt. Mason teachers are being paid better than the area average.

“The health insurance givebacks are much larger and are very close to our proposal. I think we have a deal unless Tom can’t find the extra $60,000 we’d need for the bigger one-time payment in this year’s budget,” she said, looking at Tom.

“I can find it and I agree this looks like an agreement to me,” Tom said, as he turned toward me expectantly.

“I can buy this as an agreement,” I said, “but my hard sell will be with the school board. They’ll will hate the bigger one-time payment, the raises for top-end teachers and the lower health insurance contributions. I wonder what made this union come around so quickly.”

“They knew it was now or never,” Tom said. “You’re only here one year and you’re the first superintendent they have dealt with who has some level of control with this school board. This was their first chance to negotiate with Harold Smith out of the room and they wanted to get this done before he wormed his way back into the negotiations.”

“And they wanted that one-time off-schedule payment as soon as possible. Those teachers stuck on steps that don’t go up haven’t had a raise for five years. That offer and Harold’s absence sealed the deal,” Alice said.

We went back in to meet with the teachers again.

The public union premium

Any business dominated by personnel costs like education (lawyers, architects, medicine, etc.) has increased in per employee cost much more than CPI inflation since 1970. Health insurance costs have skyrocketed. Pension costs have jumped upward every time the stock market dropped.

With 70 to 85 percent of a typical school district’s costs associated with personnel costs it’s easy to see where the extra money has gone.

The data below assumes the following rough school budget expense distributions based on a detailed analysis of fifty 2015-16 school district budgets found on line at websites for schools in New York State and around the country in high cost and low cost states:

Area of Expense  of total budget in high cost states  of total budget in low cost states
Teacher/Professional staff salaries 30 percent 45 percent
Support staff salaries 7 percent 9 percent
Administrative salaries 3 percent 3 percent
Employer Health Insurance costs 20 percent 22 percent
Employer pension costs 7 percent 3 percent
Employer share of Social Security contributions 3 percent 4 percent
Special/vocational Education Transportation and Tuition Costs 4 percent 3 percent
Other including technology 7 percent 7 percent

(Note: The “of total budget” chart does not include 100 percent of school district expenses. I’ve excluded those expenses which tracked more closely to CPI inflation like utilities, supplies, equipment, bus purchases, etc.)

To ameliorate rapidly increasing costs low cost state school districts purchased less expensive health insurance plans with greater deductibles and co-pays paid for by their employees. They also contributed less toward employee pensions with defined contribution pensions. On average the school districts in low cost states added 20 percent new teaching staff, 50 percent new support staff (mostly teacher aides and special education school bus drivers) and one third new administrator staff to meet these expanded needs. These school districts also gave salary raises to their employees that were modestly more than CPI inflation. This process increased expenditures in salaries and benefits and created the $3,549 in extra per pupil costs beyond CPI since 1970 in low cost states.

100% = $3,549 total increase beyond CPI in per pupil costs in low cost states 1970-2015 went to:

  • Teacher salaries for new positions (15.9 percent) and for raises beyond CPI inflation (7.9 percent) total 23.8 percent
  • Support staff salaries for new positions (6.3 percent) and for raises beyond CPI inflation (1.3 percent) total 7.6 percent
  • Administrative salaries for new positions (1.6 percent) and for raises beyond CPI inflation (0.3 percent) total 1.9 percent
  • Health insurance costs for new positions (13.9 percent) and for HI inflation beyond CPI inflation (26.5 percent) total 40.4 percent
  • Pension costs for new positions (1.5 percent) and for contributions caused by extra raises and increased contribution rates (2.7 percent) total 4.2 percent
  • Additional employer Social Security costs for new positions and raises beyond CPI 1.6 percent
  • Special and vocational education tuitions and transportation 6.3 percent
  • Other 14.2 percent (includes technology growth)
Do the math

Let’s look at two examples.

Example 1. How were the salary numbers calculated? Using the example of low cost state salary data: the low cost states added 20 percent more teachers since 1970 that means 16.7 percent of these school districts’ teacher salary costs are from new teachers. (0.20/(1.0 +.0.20) = 0.167)

This represents 7.5 percent of per pupil costs (0.20/1.20 X 0.45 = 0.075) or 7.5 percent of their budget that pays for teacher salaries) or $562 (0.075 X 7490 = 562) in per pupil expenses. This $562 is 15.9 percent (562/3549 = 0.159) of the $3,549 in additional expenses beyond CPI in low cost states since 1970. In addition, these teachers received raises beyond CPI over this 45 year period equal to approximately $5,000 or 10 percent of their present median wage of $50,000 which for the 83.3 percent of the present teaching staff which is not new and not counted above amounts to $281 of the $3549 (0.833 X .45 X .10 X 7490 = $281) or 7.9 percent of the total above CPI during these years (281/3549 = 0.079).  

Example 2. How were the low cost state health insurance numbers calculated? Health insurance cost increases beyond CPI inflation come in part from newly added employees. In low cost states 20 percent of teachers, 50 percent of support staff and one-third of administrators were added. In a typical school district between 1970 and 2015. This means 30 percent of the health insurance contracts the district pays for including retiree health insurance costs are additional contracts. This amounts to $494 (0.30 X .22 X 7490 = 494) or 13.9 percent of the $3,549 in total costs beyond CPI (494/3549 = 0.139). In addition, for the 70 percent of health insurance contracts not added to the district since 1970 81.6 percent of health insurance expenses represent expenses above and beyond CPI inflation (7185/8800 = 0.816). This amounts to $941 (0.70 X .22 X 0.816 X 7490 = 941) of the $3,549 total in beyond CPI cost increases since 1970. $941 represents 26.5 percent (941/3549 = 0.265) of the total $3,549 in cost increases beyond CPI in low cost states. 


School districts in high cost per pupil states like New York State have spent a total of $22,552 per pupil or 163 percent ($13,980) more than CPI inflation since 1970. Expenditures above and beyond the type of increases seen in low cost states are attributable to the union “premium.” (Note: If the high cost states had implemented the exact same changes as the low cost states their costs would have increased more than $3,549 beyond CPI increases seen in low cost states because everything in the high cost states costs more.)

Low cost states added 20 percent new teachers since 1970. High cost states added 84 percent new teachers since 1970. The salary and benefit costs for the extra 64 percent new teachers in high cost states beyond the 20 percent added in low cost states are part of the “union premium.” These extra teachers represent $2,354 per pupil (0.64/(1.0 + 0.84) = 0.348, 0.348 X 0.30 X 22552 = $2354) of the “union premium.”

Similarly, high cost state school districts have purchased more expensive health insurance plans ($1,591 added to per pupil expenses) and added more teaching employees obligating the school districts to pay for more health insurance plans for employees and retirees ($1,019 added to per pupil expenses) than low cost states. This is more of the “union premium.”

The cost of everything purchased by school districts in the high cost states is higher than it is in low cost states. This fact applies also to the expenses that would have come to the high cost states if they had dealt with cost increase pressures from 1970 to 2015 as the low cost states did.

If high cost states had used the same strategies as low cost states to deal with special education population growth, health insurance, salary increases and resultant pension and social security increases, new transportation and special education tuition needs, technology and other cost increases they would have increased their costs to $15,058 per pupil. The “union premium” is represented by the difference between the actual cost $22,552 and that $15,058. This difference is $ (22552 – 15058 = 7494) the total union premium.

100% = $7,494 per pupil beyond the costs expected if high cost states had employed the same cost containment strategies as low cost states.

  • Teacher salaries for extra new teaching positions (31.4 percent) and for additional raises beyond CPI (5.9 percent) total 37.3 percent
  • Support staff salaries for additional raises beyond CPI (2.2 percent) total 2.2 percent
  • Administrative salaries for additional raises beyond CPI (1.1 percent) total 1.1 percent
  • Health insurance costs for extra new teaching positions (13.6 percent) and for more expensive HI plans (21.3 percent) total 34.9 percent
  • Pension costs for extra new teaching positions (4.6 percent) and for increased employer contribution rates (4.6 percent) total 9.2 percent
  • Additional employer Social Security costs for extra new teaching positions and for raises beyond CPI 4.0 percent
  • Special and vocational education transportation and tuitions 4.6 percent
  • Other 7.0 percent

As to the “other” category on the charts, consider this: when school districts renovate or build new schools they add to their debt service costs in their budget. If the district has added special education teachers, music teachers, AP History teachers, etc. they will be adding classrooms in their renovations and new schools. This adds to the school district’s cost increases above and beyond CPI inflation.

Similarly, more teachers will mean more copier and paper expenses, more classroom supplies and textbooks and more heat, AC and lights expenses. In the end more teachers will mean more expenses in many categories of the budget.

It’s also worth noting that the total “union premium” of $7,494 represents precisely one-third or 33 percent of the total cost per pupil in NY State (0.33 X 22552 = 7494).

Back to the negotiating table

“I think we have a deal,” I said to both negotiating teams, when we returned to the negotiations. “Of course I’ll have to convince the school board and we all know that will take a bit of work. And we have to select the new health insurance consultant and choose a new health insurance base plan. But I think that can all be done over the next few months.

“I’ll talk with the school board in executive session next Tuesday and put the approval of this contract on the agenda for the public school board meeting scheduled for the second Tuesday in November. I’m assuming Charlie and Alice can finalize the language November 12th so I can deliver it to the school board in time for them to review it before our meeting.”

Charlie and Alice both indicated they could complete the final contract language by the 12th.

“How soon can you have the teacher union vote?” I asked Sally.

“Oh, no. we’ve been down that trail before. The school board votes first and then we’ll vote within a week after they’ve approved the contract. They backed out at the last minute after we approved a contract extension four years ago. We’ll wait for them this time,” Sally said.

“Okay, Tom will prepare for the one-time payment before the February break along with a retroactive check for this year assuming we can pull together the health insurance consultant and base plan selection before then,” I said.

With everyone smiling we shook hands all around and adjourned.

After five years of acrimony we had come to a potential agreement in three negotiating sessions and less than six hours of total meeting time. Something didn’t make sense here. I had a feeling I’d find out what that something was in my next school board executive session. 

A stormy executive session

Alice and I carefully prepared for our executive session meeting with the school board to explain the proposed contract agreement. We had 90 minutes. We attempted to anticipate the school board members’ questions and misconceptions and we decided how best to explain the information. We discussed the roles we would take in the conversation.

Alice convinced me that I should explain the math and the numbers and then step back. Alice would answer the questions, particularly Harold’s questions. She noticed that when I answered questions from Harold he used the exchange as an opportunity to appear the dominant male by interrupting and attempting to distract me from providing clear and convincing information and logic.

She thought he might be more likely to listen to what was being said if she answered the questions, and the other school board members were less likely to be distracted by the back and forth between Harold and me.

Alice and I also discussed some simple strategy for handling our conversation with the school board that would hopefully make the session more productive.

We agreed I should call Tabitha Conners in advance of the executive session and request that she refrain from engaging Harold in heated verbal exchanges that wasted time, created unnecessary animosity and made for confusion.

When I spoke to Tabitha on the phone to make this request she was reluctant. “He’s such an asshole and has created havoc in this school district for five years. I just can’t stand to let him say these stupid disgusting things and not react,” she said.

“I understand completely how you feel,” I told her. “But if you give Alice and me the first hour of our 90 minute meeting then you’re free to say whatever you please in the last 30 minutes,” I assured her.

She finally agreed.

Harold’s reaction when we handed out the summary was predictable. First, he asked for 10 minutes to study the pages we’d distributed before we said anything. We agreed.

Harold studied the proposal for 10 minutes scribbling furiously with his pen in the margins of the document while the other school board members read the pages and waited for the explosion. 

Here it comes.

“This isn’t an agreement this is a surrender. The health insurance contributions are down to 14.5 percent. There’s a huge retroactive check for 2.5 percent of each teacher’s salary. The top end teachers who are already overpaid are getting a $3,000 raise. And the language in there about a health insurance base plan is so weak I bet there’ll never be a new cheaper base plan and all this ‘health insurance savings’ will be a smoke screen that never happens,” he bellowed.

Alice immediately answered calmly and professionally. “Let’s all go through this step by step and make certain everybody understands all the details before you react,” she said. Harold stopped for a few seconds to consider what Alice had said.

I entered the conversation to explain the details of the salary portion of the proposed agreement. Harold interrupted about half way through my explanation of the two graphs showing the huge change from the teachers’ union’s initial salary request to their second much more reasonable salary proposal.

“Why are those top end teachers getting a raise? They’re already overpaid?” he barked.

Alice answered Harold’s questions as we had planned. “We had to give them some kind of raise or they would never approve this contract. They’re the teachers on the negotiating team. If you look you can see that the red line at the right end is closer to the black line than the blue line is to the green line. That means over the five years of this agreement Mt. Mason’s teachers’ salaries will move closer to the area average than they are right now. We can’t totally solve this problem in teachers’ salaries in one negotiation but we’ve improved.

“Also those teachers’ raises will be less than the $2,600 per year average because each of them will be contributing toward health insurance at the end of this agreement,” she said as calmly and succinctly as possible.

Harold again was stymied and squirming and this gave me a chance to continue my explanation of the proposed contract provisions.

I quickly finished my explanation of the salary graphs and continued with the health insurance base plan and contributions. Again Harold interrupted.

“We were promised 20 percent teacher contributions toward health insurance and now we’re down to 14.5 percent. Where did they come up with that crazy number? This is awful.” He spat the words out, red-faced and puffing.

Again, Alice answered calmly and professionally as though Harold had not even raised his voice. “I believe the goals the school board adopted were that the combined impact of the health insurance savings and the salary increases were not to exceed 1 percent of the salary base in new money per year.

“This proposed agreement actually saves the district money because the health insurance savings increases each of the last four years of the contract to about $5,000 per teacher per year, in year five, and the total new money in the salaries increases to about $3,000 per teacher per year, in year five, counting each year from year one. The district will save more in health insurance than you’ll give away in salaries.”

I could see Tabitha was ready to pounce and rub salt in Harold’s open wound with this last bit of information. She realized she could say again that not settling this contract for five years had cost the district millions of dollars and it was Harold’s fault. I gave her a look that said clearly, “Not now, please wait.”

She understood my look and appeared to physically bite her tongue.

“The 14.5 percent health insurance contribution is the area average for teachers, which is where the negotiations ended.” Alice said this last with a smile. Harold was stymied again.

While he licked his wounds and plotted his next interruption I jumped back in to explain the one-time payment of 2.5 percent of this year’s salary we negotiated in place of a retroactive salary raise. I emphasized that making this a one-time payment meant it did not raise the salary schedule and therefore helped to keep future salary payments lower.

“Whatever you call it, it’s a retroactive raise and we said no retroactive raises,” Harold shouted. “This is bullshit. You guys are all the same. Empty suits with no ethical standards. You tell us one thing and as soon as our backs are turned you sell us out. I’ll never vote to approve this contract,” he said, emphatically.

Again, Alice answered calmly and professionally “This off-schedule one-time payment is the way NYSUT teacher unions have been settling contracts that expired several years ago around the state. This is roughly the norm for how these long expired contract settlements have gone statewide. And Tom says we have the money to make this settlement in this year’s budget without creating a shortfall.

“In addition, even with this one-time payment we’re still well within the board’s goal of a total of 1 percent new money per year with the health insurance savings in the mix. This agreement will save the school district about $500,000 per year for each of years two through five of this contract and this one-time payment the first year of the contract will only cost the district about $500,000. Overall this contract is a $1.5 million net savings for the district as Tom’s summary sheets show.” 

Harold was steaming. He rose from his chair in a menacing stance and snarled. “This contract will never be approved.”

Turning toward me he continued to spew venom. “And your days in this school district are numbered. You’re the worst excuse for a leader I’ve ever met. I’ll make sure you’re out of here before Christmas.”

              Only one thing kept me in the room: the boy in the blue parka.

The rest of the school board watched wondering what might happen next as Harold stomped out of the room with Doug two steps behind. Harold stopped at the doorway when he realized Helen hadn’t followed.

“Helen, are you coming or not?” Harold barked. It wasn’t a question. It was an order.

Helen looked like a deer in the headlights. “I’m staying,” she said. “I have some other questions I need answered.”

Harold’s growl was audible as he turned and strode purposefully toward the parking lot and his big black pick-up truck which was parked next to Doug’s red pick-up truck.

After Harold left Helen sighed and looked like she might cry. “Will the teachers get their one-time payment before the February break if we approve this contract at our next meeting?” She asked.

“If we can nail down the new health insurance consultant within the next few weeks and get the new health insurance base plan selection process completed by February 1st – — yes,” I told her.

“Will the new health insurance base plan go into effect during this school year?” Tabitha asked.

“No, not until next fall,” I replied.

“So that’s why you’re figuring on health insurance savings only for years two through five in the new contract?” Mike asked.

“Yes, that’s correct. So, this year with the one-time, off-salary schedule 2.5 percent payment to teachers and their raises for this school year, the district will have a net loss this school year but will more than make up for that in future years with the new health insurance plan and the teacher contributions for active teachers and future retirees,” I explained.

“And those graphs and the health insurance data information which we can update when this contract expires should make our next negotiations with the teachers a lot easier,” Tabitha said. 

“I certainly hope so,” I replied with a smile.

Then I realized that with Harold gone this group was behaving like a real school board. They were asking the right questions, being respectful of me and each other, following up on other members’ ideas and showing their own intellects and ideas. It made me wonder how much could have been accomplished in the Mt. Mason school district if Harold Smith had never decided to run for the school board.

The school board’s public approval   

The day of the next scheduled public school board meeting with the teacher contract vote on the agenda Helen Anderson called me at 4 p.m.

“I don’t know what Harold is up to. But he’s planning something. He hasn’t talked to me except to call me a traitor at the lodge in front of all his buddies when I was there with my husband, John, over the weekend,” she said.

“My husband told me Harold was going to show you up good at the meeting tonight and make sure everyone knows you’re lying about the numbers. He’s also been telling people this contract was going to raise everyone’s taxes big time. John is trying to get me to vote against the contract because all of our friends are backing Harold. But I refused to budge and so now we’re not speaking.”

“Don’t worry Helen. Our numbers are right. Harold is just grasping at straws because he’s about to lose his toy and he’s going to lose his position of importance with his buddies at the lodge. Tom and I will handle whatever Harold throws at us,” I replied as reassuringly as possible.

At 4:30 p.m., immediately after Helen and I spoke on the phone, I held a meeting with the reporters from three local newspapers covering the school district. I handed each a press release detailing the results of the teacher negotiations and the summary sheet regarding the new teacher contract the school board would be voting on that night.

I showed them the line graphs and the health insurance summary data. I carefully explained where Mt. Mason fit into that data with the old contract in place and where it would fit when the proposed contract was approved. I answered every one of their many questions to be sure they fully understood what the school board would be voting on later that night.

It was important this be communicated correctly to the public. I knew if I didn’t take the time to meet with them before the public meeting of the school board their reports would be all about whatever scene Harold planned to create and they’d miss the real story about the details and advantages of this contract.

The school board meeting started on time and the room was full with 40 audience members including several teachers, the teachers’ negotiating team, the three reporters and several of Harold’s buddies from the lodge. After about 15 minutes of routine actions we arrived at the point in the process when the school board would first discuss the proposed teacher contract one at a time and then act on the contract.

“I am the school board president and I will take the option of speaking last on this topic before the school board votes,” Harold said.

I made certain all the audience members had in their hands the press release I had discussed with the reporters earlier in the day and Tom Garrigus’ summary sheets that showed the line graph of the regional teacher salaries and the health insurance data for all the neighboring school districts. I had also distributed all this information to the school board on Friday before the public meeting. 

Tabitha spoke first emphasizing the long and acrimonious negotiations and the fact that with this settlement the district and the teachers were both “winners” financially and that now the district could get back to concentrating on improving academic results for Mt. Mason’s children and improving the working relationships that had suffered during the years with an expired teachers’ contract.

Mike spoke second and emphasized the health insurance savings, the expanded teacher contributions toward health insurance for active teachers and future retirees in the new contract and the teacher salaries that brought Mt. Mason closer in line with teacher salaries in the surrounding school districts.

Doug as usual just passed. “I’ll let Harold speak for me.” He said with an embarrassed smile.

Helen was not eager to speak. She cleared her throat three times and then spoke just above a whisper. “This contract saves the district over $2 million in health insurance costs over five years and it will only cost the district about $1 million in bigger teacher raises over that same five years. It’s a good deal and I’ll be voting for it,” she said.

It was Harold’s turn to speak. “Doug and few of our audience members will need to set up our computer screen projector and while they do that I want to hand out an accurate summary of the financial impact of this proposed teacher contract,” he said. Harold pulled out a large stack of copies of a document I had not seen previously and one of his lodge buddies gave copies to everyone at the meeting.

As this man handed me a five page Excel spreadsheet document he gave me a gleeful smile. “Enjoy. This is the last thing you’ll ever be seeing in Mt. Mason.”

Doug and two other “helpers” plugged in and turned on a computer and projector while Tom, Alice and I quickly scanned the suspicious document.

Tom whispered so that Alice and I could hear him but not Harold. “I think it’s a summary of health insurance costs with inflation estimated at 7 percent per year and it compares our expenses this year with the projected costs under this contract. But I’m not certain.”

“Health insurance inflation has only averaged 4 percent per year over the last three years since the Affordable Care Act came in,” Alice said.

“Harold is looking for a way to stop this vote. He knows the teacher union would assume the school board was just going to back out again like they did when they thought they had a contract settlement four years ago. They would be on the warpath immediately and this agreement would fall apart,” she added.

Harold was speaking now. “As you can see from these numbers the superintendent and Mr. Garrigus have not told us the truth about the real cost of this contract. We all know that health insurance inflation is a real factor and on purpose they failed to take inflation into account with their projections of costs and savings.

“In the end this contract will not save the district money it will cost us over $1 million over the five years. The teachers will not be contributing 20 percent toward their health insurance as they are in Gloversville and Amsterdam and our highest paid teachers will be paid $5,000 more than similar teachers in nearby districts. Any vote to approve this contract is a sellout for the Mt. Mason taxpayers.”

Alice, sensing Tom’s and my anger at being publicly called liars and doing her best to help us avoid Harold’s trap with an overreaction, jumped in before either of us could say anything.

“First, health insurance inflation is averaging 4 percent per year over the last three years not the 7 percent you’re using in this Excel sheet. Second, inflation at any rate on the $15,000 base plan this contract requires will be significantly less than the same inflation on the $18,000 per plan the district is paying right now.

“Lastly, bringing this sheet here tonight and springing it on everyone at the last minute is not reasonable. I am guessing your motive is just to stall this vote when what your numbers suggest is not a realistic appraisal of the actual proposed contract,” she said professionally but firmly.

Harold glowered at Alice. “Inflation has not been properly taken into account in the contract financial projections provided to us by Mr. Garrigus. We can’t vote on this contract until this information is properly accounted for,” he said, triumphantly.

The Mt. Mason school board had a strict rule about public comments at their school board meetings. Previous stormy sessions with verbal and even physical altercations at the meetings had resulted in a school board policy that limited public comments to a short, tightly structured interval at the beginning of the board meetings and a similar short interval at the end of the meetings. A voice in the back of the room from one of the teacher members of their negotiating team members violated the public comment rules.

“Harold, we all know the inflation on $18,000 is more than the inflation on $15,000 we don’t need to stop this vote to study that question,” she said. Everyone laughed, even Harold’s lodge buddies and Harold’s red face became even redder.

Helen Anderson smiled. “I call the question,” she said cheerfully. “I second that,” said Mike, also smiling. The vote to shut down discussion passed three to two with Harold and Doug voting to continue the discussion and the other three board members in control.

“I move we approve the proposed teacher contract,” Tabitha said, as she read into the school board meeting minutes a long paragraph Alice had prepared in advance that outlined the conditions for the approval including a new health insurance consultant for the district, the selection of a mutually agreed upon health insurance base plan for the teachers’ union membership and a payment schedule for the one-time off-schedule payment to teachers and the raises for the present school year back to the beginning of September.

The school board vote to approve the contract passed three to two and the meeting adjourned immediately after the vote. I rushed to reach to the three reporters before they dashed to their cars to make certain they understood the smoke screen behind Harold’s claim that we hadn’t properly accounted for health insurance inflation.

But before I could get to them as they left Sally Anselm grabbed my hand and shook it wildly. “We did it! Thank you for pulling that off. We could have been stuck here without a contract for another 10 years,” she said with a big smile.

As Sally shook my hand and spoke Harold Smith walked behind me with his entourage of Doug and his lodge friends carrying their computer equipment. Loud enough for all to hear Harold made a comment that said all that needed saying about the school board leadership dynamics in Mt. Mason.

“Our superintendent is shaking hands with that asshole teacher union president who has caused our community untold grief. Mr. Palmer is a poor excuse for a leader. He’s the worst superintendent we’ve ever had.”

Sally’s grip on my hand tightened and her eyes became a steely gray as she glared at Harold over my shoulder. Then she smiled, “Nice to see you, Harold. Have a great night at the lodge with your friends,” she said, as quietly as possible as Harold and his group moved outside the school board meeting room.

The next morning I spoke with all three reporters on the phone in an attempt to clarify what had happened at the meeting. Two of the three reporters understood and their reports that came out later that evening reflected the fact that they understood that Harold had provided no real financial data that warranted delaying the vote to approve the new teachers’ contract.

However, the third reporter was stuck on the fact that our financial projections for the costs and savings in the new contract had not taken health insurance inflation into account. I explained repeatedly that when health insurance inflation was accounted for the health insurance savings we were projecting in comparison to not settling the contract and keeping the high priced health insurance plan now in place would be even greater.

I offered to have Tom Garrigus give the reporter a financial projection with the health insurance inflation adjustment in place later in the day. But the reporter declined the offer saying that she would miss her deadline if she waited for Tom’s new projection.

In the end the news stories were mostly positive. As usual they spent too much print focused on the back and forth between Harold, the other school board members, Alice and me and not enough on the facts of the issues but it was as good as we could hope for given Harold’s last gasp attempt to stall the vote with misinformation.

When Tom produced a cleaned up version of the financial projections on the contract with health insurance inflation accounted for it was three days later. It showed the extra savings we all knew would be there when 4 percent health insurance inflation was included in the mix ($500,000) and it was old news no one was interested in reading.

After several meetings and planning sessions Alice and Tom helped me successfully settle the other two negotiations with the support staff (primarily civil service employees who pay dues to the statewide union CSEA) and the administrators (principals and assistant principals who pay dues to the statewide union SANYS) before the end of the school year.

Their agreements followed the pattern of the teachers with salaries closer to the regional average for their job titles in the neighboring school districts, a switch to a new cheaper health insurance base plan and increasing contributions for their health insurance over the five years of their new contract.

The teachers voted to approve their new contract in late November just before the Thanksgiving break. We selected the new health insurance consultant before Christmas and finished the determination of the new health insurance base plan in March…much later than we’d hoped but the required tasks were completed and the one-time payments to all union employees and their retroactive checks for the present school year were in their hands before the spring break in early April.

Helen Anderson announced her resignation from the school board effective July 1 at the last school board meeting in March. With Helen’s resignation there were three school board member positions were up for a vote that May: Helen’s position, Harold’s position and Mike’s position.

Harold and Mike were both running for re-election. Three other new candidates from the community were also on the ballot for school board that May. One of the potential new members for the school board was a friend of Harold’s who frequented the lodge. The other two potential new members were parents of school age children and friends of Tabitha and Mike. The school board starting July 1, when I would be leaving the district, could have as many as three new members.

I contemplated writing a letter to the editor in the three newspapers that covered the school district and encouraging the voters not to re-elect Harold to the school board. I also considered endorsing Mike and his two friends who were new potential board members. But in the end I decided that Mt. Mason needed to decide what they wanted from their schools in the future. Did they want more buffoonery from Harold and his type or did they want to turn a corner toward a new kind of leadership in this school district?

The day of the school budget vote and school board member elections all five of the present school board members and the three potential new board members plus the same three reporters showed up in the high school gym where the votes were counted.

The budget passed (a big sigh of relief for me). Mike and one of his friends were elected to the school board. Harold Smith garnered more votes than any other school board candidate and was re-elected to the school board.

Harold immediately spoke with the reporters present and claimed this as a victory and a mandate for him to continue to, as he said, “rein in these weak and clueless superintendents and protect the taxpayers of Mt. Mason from their spendthrift ways.”

The Mt. Mason school board had partially turned a corner. Harold would still be there making life miserable for the next superintendent, but that new superintendent would have an apparent three-member majority to help smooth the inevitable leadership trials headed toward Mt. Mason.

On June 1, at a special school board meeting the Mt. Mason school board appointed Anastasia Balland to the position of permanent superintendent of schools for Mt. Mason with a three-year contract set to start on July 1.

I did not know Ms. Balland and had not been involved in the superintendent hiring process.

Mike and Tabitha had earlier in the year encouraged me to stay on as the permanent superintendent for the school district. Later they told me that given Harold’s anger they thought it best for me to leave at the end of the year.

This was a pattern I had seen before and I understood completely. If I made the changes necessary to move the school district forward as the interim superintendent too many toes would be stepped on to stay as the regular superintendent. Besides, another long-term superintendent position in a contentious district like Mt. Mason was probably not something my cardiologist would recommend. 

In the end Mike, Tabitha and I agreed it best if I kept my distance from the entire superintendent search process.

I discovered online that Ms. Balland was an elementary school principal from nearby Amsterdam who had no central office experience. When Helen Anderson called me a week after Superintendent Balland’s appointment to say goodbye she informed me that Ms. Balland had impressed the school board with her charm and ready smile at the interview. Helen also said she thought Harold Smith would eat her alive.

I met with Superintendent Balland five times in June to help set her up for the best chance of success. My conclusion in the end was the same as Helen’s: Superintendent Balland would have a very difficult job and she would need to raise her game significantly to keep Harold Smith in check and move the district forward. At least she wouldn’t have three expired union contacts to deal with on her arrival to the school district.

As I made my final 25 mile drive home from Mt. Mason on June 30 I had very mixed emotions. I felt relieved to be away from Harold, proud that we had settled the contracts and angry that I had wasted a whole year on three labor contracts.

I decided to become a school administrator to improve learning for children not to negotiate contracts. It was sad to think that what we had done in Mt. Mason might well be undone in a couple of short years as a rookie superintendent struggled to get her feet on the ground and keep a tenuous new school board majority moving in a positive direction.

And I wondered what kind of system of contract negotiations and school district leadership might have a real chance to work in a place like Mt. Mason.

What’s the solution?

Having each individual school district in New York State, many with only a few hundred students, individually negotiate labor contracts with multiple unions is foolish to say the least. It’s a waste of leadership time and resources and it’s a guarantee that it will pit large (Goliath) state level unions armed with negotiations specialists against local school districts (David) armed with the best attorneys they can afford.

Right now, 733 school districts in New York State cannot be fully and effectively concentrating on improving students’ educational achievement when they spend so much time focusing on employee contributions for health insurance, salaries for top end teachers and which bus drivers get the easiest bus runs (all topics of negotiations I have had to deal with). None of these issues will ever contribute to greater student achievement.

A potential solution is state level negotiations for all school district employee pay and benefits with a regional cost adjustment that scales the standard statewide employee salary and benefits agreement to the cost of living and the cost of health insurance in each region of the state. The state’s negotiations team, composed of a few representative school board members, a few superintendents and a small group of lawyers and financial representatives including a couple of school business officials and a comparable group of representatives from state level teachers’ union could complete one negotiations for the entire state.

This idea also applies to villages, towns, cities and counties where multiple levels of government waste resources and time negotiating with local unions representing police, firefighters, nursing home workers, clerical employees, etc.

The need for public union representation and negotiations for pay and benefits is without question. But thousands of local negotiations waste precious taxpayer dollars on lawyers and consultants and waste far too many hours of precious leadership time that should be devoted to improving school and local government effectiveness. It’s inefficient, a waste of resources and guarantees schools in particular will spend way too much priority leadership time trying to resolve issues that should be handled in a larger arena. And it will allow thousands of Harold Smiths to masquerade as leaders while they do nothing more than block progress, including academic progress.

Why do these tiny government outposts still exist when almost every state has tried to consolidate their functions? Because the school board members, village council members, mayors, superintendents, etc., want to control power and paychecks. The problem persists because the process of consolidation is frequently blocked by much higher property taxes for one potential participant government entity.

This is an easy math problem that can be solved with a fairly simple five to ten year tax rate change phase-in plan with doses of extra state aid to grease the wheels. Many states neglect to incorporate such a phase-in coupled with a state aid boost when they talk about consolidation legislation.

And lastly these changes don’t happen because the local folks don’t want to lose their beloved Lion as the team mascot. Decisions to consolidate school districts become a threat to individual and group identity. They don’t want to lose their seat on the school board, don’t want the tree they planted in their brother’s name to be in front of an elementary school that gets closed, etc. Local control all too frequently translates into sophisticated systems run by amateur townsfolk with misplaced priorities. And this is an urban, suburban and rural problem.

How could we handle the transition to a new system of state level public employee negotiations for school districts? State level organizations for superintendents, school board members and school business officials could select teams of three representative members each to serve on the state negotiations team for employee salary and benefits.

Three selected representatives of the state education department would join this team. This 12-member team could issue an RFP for an attorney firm to help with the state level educational employee negotiations and a regional cost adjustment process within the state.

Once the team has selected the attorney firm to help them with the negotiations, the state level unions representing employees in the school districts would be invited to participate in negotiations starting with the state level teachers’ union.

If there are multiple state level unions representing teachers the largest state level teacher union by membership would negotiate first. Once the teacher negotiations had settled and a process of regional cost adjustment for teacher salaries and benefits had been resolved, separate negotiations would take place first with the state level union representing support staff members and lastly with the state level union representing administrative staff. The same regional cost adjustment would apply to all three types of school district employees.

The goal of these negotiations for the state level teams would be to create teacher salary structures that attract and retain good employees (good starting salaries for entry level teachers and a flatter step system with smaller yearly raises for teachers).

These salary schedules would allow for the possibility of teacher career ladders that started teachers at lower pay in teaching assistant roles where they tutor students, teach lessons under the guidance of a certified, tenured and successful teacher and progressed to starting teacher pay with successful completion of this entry level responsibility.

Local innovations

These salary schedules would encourage local innovations that paid teachers extra for assuming leadership roles and for hours during summers, weekends and school breaks with students or with their peers working on curriculum improvements and training. In other words, more pay for the best teachers who would assume extra responsibilities and leadership roles.

These negotiations would also move toward teacher benefit packages that would include higher deductible/higher co-pay health insurance plans than those provided to public employees presently in the high cost states and defined contribution type pension plans similar to those currently found in low cost states.

Once teacher negotiations are finished this same set of priorities would be the goal for negotiations with support staff and school administrators.

If the teachers’ contract in a school district at the time of transition to this statewide system of negotiations provided significantly higher pay or more costly benefits, the newly negotiated state level teacher contract would provide a five to ten year transition to smooth out the shift. The same would apply for teachers who were significantly underpaid or whose benefits cost their school districts much less than the benefits package negotiated at the state level.

The low cost states appropriately added fewer staff members to meet the needs of special education. They also, in general, successfully avoided the financial pitfalls of defined benefit pension plans and super expensive low deductible and low co-pay health insurance.

They also successfully avoided overpaying their top-end teachers. But their academic results are unacceptably weak. In many low cost states public education serves only poor minority children and poor white children. Any parent who can afford it sends their children to private schools. This is not a real answer for public education in the U.S.

These states’ school districts need to spend more on teacher salaries to attract more highly qualified teachers. And they need to spend more to help struggling students and poverty students improve their academic performance.

And what about the high cost states?

The high cost states have wasted huge amounts of money by adding staff that did not improve results significantly. Their results are, in general, better than those seen in low cost states but nowhere near acceptable.[xlvii]

Some of the additional staff hired since 1970 went to academically unproductive positions in special education. A fraction of these positions were necessary to address the unserved needs of severely disabled students. However, many of these positions were wasted coordinating and implementing a highly regulated and academically ineffective program.

Some of the new teachers helped to reduce class sizes but without producing any measurable improvement in academic results. And some of the new teachers went to electives in the visual and performing arts, vocational education and specialized subjects and other curriculum tracks that increased students’ enjoyment of school at the middle and high school levels but did nothing to improve test scores.

As a principal I always supported the addition of electives, arts, Advanced Placement and vocational education programs to help students reach their full potential and to motivate students who otherwise would have dropped out of school or never had a chance to shine academically. But we must first make certain that all of our children can read, write and solve challenging math problems at a level necessary to achieve success in college or in a 21st century career before we contemplate adding these wonderful but nonessential programs.

The high cost states have also wasted money on unnecessary, bigger raises for more senior teachers, expensive health insurance and costly defined benefit pension plans. However, given the negotiations set up in high cost states with local school districts negotiating with state level unions representing teachers, support staff and administrators and laws like the New York State Taylor Law and decisions like the Triborough Decision these results are to be expected.

How should we be spending our money to produce better academic results?

Below are three strategies I think would improve academic results for students beyond those noted previously in this book. Both will require us to deal more effectively with hard financial choices and difficult politics. If we are to create the significant positive academic achievement change we’ve sought but failed to produce during my career, we’ll need to re-deploy some of the money we have assigned to special education since 1975.

High cost states could fund these extra expenses with a move to defined contribution pension plans and less expensive health insurance plans for employees. But low cost states will need to increase taxes to put these three strategies into effect.

Strategy 1: One-on-one tutoring outside the regular school day

Many students in the United States leave elementary school two to four years behind expectations in reading, writing and math.[xlviii] The massive growth of special education services between 1975 and the present led many educators to believe that special education was at least a partial answer to our educational underperformance issues.

It is not. As more students were placed in special education a pattern emerged. The greater the percentage of students placed in special education in any school district, the lower the student achievement levels.

This problem expanded rapidly with the “specific learning disabilities” label for academically struggling students

At present more than 35 percent of students in special education programs and classes are labeled with “specific learning disabilities.”

This label gave parents a reason for their children’s poor performance in school and made them feel better, but it didn’t help the student read or do math any better and in the end it became a crutch disguising low student expectations and wasting limited educational resources.

Similarly, remedial education (pulling weaker students aside during the school day for small group instruction in reading or math, frequently funded with Federal grants awarded based on student poverty) has not produced results for the same reasons.

The pattern has been consistent. Students are pulled out of challenging regular instruction where they are struggling academically to meet with the remedial teacher or the special education teacher in another room during the school day. Once in this new setting these students face less challenging curriculum and textbooks and other learning materials below their grade level.

This instruction came in much smaller and very expensive classes while their desks in the regular classroom remained empty. And it produced, in general, few notable academic gains for students.

One of the obvious drawbacks of these “pull-out” programs is that students who are pulled out are missing more challenging regular instruction while they are outside their regular classroom.

As a result, they never catch up. When you consider the fact that they’re being asked to do less challenging work than they faced in the regular classroom, we’re guaranteeing they go backwards.

What’s remarkable is the staying power of this type of intervention as the underperformance of this strategy was known as early as the 1970’s. Yet, it still exists in one form or another in many school districts today.

Part of the reason for this strategy’s longevity despite its failures for students is that it created many easier jobs for the special educators and remedial teachers who staffed these low expectation classrooms.

Many of these teachers were regular educators who earned a Master’s degree in reading or special education and then semiretired to their easier jobs. These teachers have fought against giving up their easier jobs ever since.

The pull-out programs also gave the regular classroom teachers a place to send more challenging learners. These tougher-to-educate students are at least out of their hair for an hour or two a day and this makes their jobs easier. The solution worked for the adults but not for the students and we’re still trying to reverse this move to lower expectations, even after 40-plus years of failure.

Additionally, the large percentage of ethnic minority children and children from poverty placed in low performing special education and remedial classes makes them one of the most discriminatory and racist practices in the U.S. education system. Many of us have said uncomplimentary things about George W. Bush but his statement about “the soft bigotry of low expectations” was completely on target.[xlix]

This “pull-out” approach for remedial and special education students fell out of favor in recent years due to the persistent low student academic achievement levels it produced, the weak academic expectations for students that concerned parents and the social impacts of segregating less successful students that concerned many of us.

Now, in favor is a “push-in” model for special education and remedial education, which puts two teachers in the classroom at the same time with all the students: regular education, remedial education and special education students.

For each lesson one teacher takes a lead instructional role and the other supports the instruction while moving around the room helping students. This approach has some promise because at least all the students are seeing the same instruction and the same learning materials, and they’re all facing the same levels of challenge.

But the “push-in” model suffers from two of the same incorrect assumptions that befell the “pull-out” model.

  1. Incorrect assumption: students can learn the same challenging curriculum in the same amount of time. Our school day timetable and our school year calendar assumes this to be true. It’s not. All U.S. students go to school for approximately seven hours a day for 180 days with very small variations. A few charter schools, a very few public schools and a number of private schools fall outside this norm, but very few regular public schools offer extra instruction to a subset of their students who need it.
  2. Incorrect assumption: The cheapest and most effective way to help students who are struggling academically is to work with them as part of a group of students. This group could be a smaller “pull out” group with a special education or remedial teacher or it could be in a regular education classroom where an extra teacher is providing a “push-in” type of support.

My experience tells me that the only time a truly struggling student progresses is when they are tutored one-on-one by a certified teacher who is following the curriculum and academic expectations the student is seeing in their regular classroom. I have tutored many students during my career. Their progress in a one-on-one setting can be amazing.

When I needed to, I tutored my own children, but most students don’t have a parent who can tutor them at home. Wealthy parents hire the best tutors money can buy when their children struggle in school. But our society has decided without considering the options that students who come from poverty or even working class homes don’t deserve the “luxury” of one-on-one tutoring when they’re struggling in school.

The first strategy to improve academic achievement in U.S. schools is to add many more many hours of one-on-one tutoring from certified teachers delivered outside the regular school day for students who are struggling academically.

If we are to implement this strategy successfully, we need to shift financial resources dramatically away from traditional learning disabled special education and remedial education teacher salaries and benefits to more certified one-on-one tutors who work in the hours before school, after school, evenings, weekends, school vacations and summers.

An effective tutor diagnoses what the student knows, where the learning blockage is occurring and how best to remove the blockage. If they have to back up and re-teach something the student should have learned earlier but did not learn they can do that and then return to the lesson at hand.

That set of tasks (back up and re-teach one-on-one) is virtually impossible to complete effectively in a classroom with 25 students who are ready to move forward with the instruction when some students lack the skills or background and are completely stuck.

A few gaps in learning caused by unavoidable school absences, chaos at home or in the neighborhood, or normal learning difficulties can create insurmountable obstacles for students.

Planning and teaching lessons in regular classes at three levels, incorporating re-testing opportunities for all students and providing extra challenges for students who are ready for them as advocated elsewhere in this book can significantly decrease the numbers of students needing additional academic intervention.

However, these strategies for regular classroom instruction won’t eliminate the need for an effective intervention for a significant percentage of students who will need additional academic support to succeed.

A true special educator with very high skill set and with a caseload of five to ten tutors and 75 to 100 students could help tutors diagnose student learning difficulties and devise strategies for regular classroom teachers, tutors and students to improve learning for the students assigned to tutoring who continue to struggle.

But, in general, these tutors don’t need to be special education certified teachers. This program of tutoring for struggling students outside the regular school day would be provided to learning disabled special education students in place of their present special education experience and to students who are struggling academically who lack the special education label.

The tutoring experience I am describing should be flexible and should continue only as long as it’s needed. The tutoring should be focused heavily on the early grades with 60 to 70 percent of a school district’s tutoring support provided in grades K-4. The remaining 30 to 40 percent of tutoring resources should be provided sparingly in the upper grades.

The tutoring I envision would also be administered flexibly from one to five hours per week with an assumed average of three hours per week per student. In the end, if five hours per week of one-on-one tutoring outside the regular classroom and solid regular classroom instruction can’t help a student succeed. it is doubtful any financially affordable strategy will work for that child that will lead to a regular high school diploma and passing all the tests required for graduation.

This failure by the school district and the students will become clear for the small group of students and parents (my best estimate 1 to 3 percent of a suburban middle class population, 3 to 6 percent of a high poverty population) who must face the fact that the school district can’t find a way for their child to succeed academically and pass all the exams required for a high school diploma.

Those failure rates I’m estimating are significantly lower than the failure rates we’re now seeing in school districts across the nation (50 percent failures and higher), particularly in districts with high percentages of students who receive free and reduced price lunch and schools struggling to implement the more challenging Common Core level academic expectations.

We can do better

The sad truth is even with our best efforts a small percentage of students won’t be successful, but we need to devise a system that helps as many students as possible succeed academically with challenging standards and within budget.

We can’t lower expectations so that every student will succeed or our high school diplomas will mean very little. Nor can we spend unlimited money trying to make sure every student meets academic expectations with outmoded special education and remedial programs that are proven failures.

Our track record since 1970 shows that just throwing money at our educational problems will not work. However, the educational achievement data also shows that lower levels of K-12 education funding correlate to fewer college educated adults in the future.[l] So we need to spend wisely.

When the time comes and parents and students understand a student won’t be able to pass all the required tests with the support available, a special education certificate that properly recognizes what the student has achieved should be given to them at graduation time.

The decision of when to give up on the regular diploma and how it should be done should rest solely with the student and parent with support and guidance from the school staff.

I sat through far too many meetings with parents whose children were struggling in school and heard them ask for one-on-one tutoring outside the regular school day for their child that fit into their family’s busy schedule and was paid for by the school district.

These parents were making the right request and almost always I had nothing I could give them. Volunteer tutors are great but a certified teacher who follows the curriculum exactly, coordinates her work with the regular classroom teacher and makes certain the work the student does with the tutor allows them to improve their report card grades for the regular classroom is the best professionally appropriate option.

Would you return to a doctor’s or a lawyer’s office, where you were given a volunteer assistant to work with – when she has a chance.

Teaching is a profession and we need to treat is a profession. I have always expected teachers to offer help outside the regular school day for students who are struggling, and I would certainly continue with that expectation.

But the test data indicates that the numbers of students needing intensive tutoring (more than 50 percent in the early grades in some high poverty schools) far exceeds the number that can be served by volunteers or dedicated teachers staying after school to help “Johnny learn to read.” What I am suggesting will require major resources and significant professional time.

Why haven’t we looked at this option before? Special education teachers and remedial teachers do not want to work odd hours in the early morning, late afternoon, evenings, weekends and summers. What I am suggesting would be the end of their present positions. Principals don’t want to supervise their schools during these extra hours. Unions don’t want full-time union dues paying jobs broken up into multiple part-time positions with odd hours that may or may not pay union dues.

Most regular classroom teachers won’t want to work for extra pay and the odd hours being offered with these tutoring assignments. Low cost state school districts and state legislators don’t want to raise taxes.

Is this outside the school day tutoring option affordable? Consider a full-time special education teacher with a case load of 20 learning disabled students in a low cost state with an average of $50,000 in salary and another $13,000 in benefits (social security, medical insurance and pension).

Certified tutors in these low cost states average $20 per hour including social security costs. (I am assuming these will be part-time positions without medical or pension benefit costs.)

Currently, $63,000 of total teacher cost for the school district converts to 3,150 hours of tutor pay at $20 per hour (63000/20 = 3150). If all 20 learning disabled students received three hours per week of tutoring outside the regular school day for the 36 weeks of the school year calendar it would require 2,160 hours of tutoring time.

This would leave 990 hours of tutoring time for summertime, school breaks and students who are not labeled learning disabled. This switch is financially possible and it is much more flexible than the very inflexible special education system we now have in place.

In high cost states the average special education teacher salary and benefits costs would increase to an estimated total of $98,000 and the tutor rates would increase to $30 per hour with the total number of tutor hours available increasing to 3,267 so it’s still affordable in high cost states.

Too frequently in high cost states and particularly in underfunded schools serving mostly poverty students the pinch of ever increasing budget costs and local school tax rate concerns collide and school districts make the easiest political decision. They cut the programs and learning opportunities that are critical for students’ motivation to learn.[li] I am not advocating more such ill-advised cuts. We need to reallocate money now spent on special education and remedial education which are not producing academic gains to one-on-one tutoring outside the regular school day.

Strategy 2: Early Intervention`

As noted elsewhere in this book the most successful interventions for academically struggling students and students from poverty take place when they are younger. There are two complementary interventions that research indicates would have a significant positive impact on poverty populations.

Monthly or bi-monthly (6 times per year) home visits to the homes of all children aged 0 to 5 in high poverty neighborhoods by trained school district employees following an established calendar and curriculum in their interactions with parents and children has been shown to improve school achievement and later life outcomes for children participating in the program.[lii] [liii]

Full day preschool provided by certified teachers in a well-regulated setting with classes of 15 or fewer students and a full-time classroom aide for all 3- and 4-year-olds from poverty has also been shown to improve school achievement and later life outcomes for participants.[liv] [lv] [lvi] [lvii]

What would these programs cost? Monthly home visits of two hour duration provided by a trained, college graduate school district employee or the employee of a community organization partnering with the school district to provide this service would cost approximately $750 per child per year.

(Note: The caseload for a home visit professional = 60 children with the home visit professional completing three daily visits and 20 visitation days per month. Assuming the home visit professional’s salary, benefits training and supervision cost equals $45,000 per year in low cost states and $55,000 in high cost states, the cost per child would be $750 per child per year in low cost states (45000/60 = 750) and $917 per child per year in high cost states.

If school districts across the country added this service for all children ages three and four, it would add students at five new ages (0, 1, 2, 3, 4) to the lists of children receiving services from the school district.

In high cost states the cost for monthly home visits for all children ages 0 to 5 would add to the existing school per pupil costs (NY state $22,552) $353 per student per year (5/13 X 917 = 353) or 1.56 percent increase in costs. And of course delivering this service with bi-monthly home visits to only the 50 percent of students eligible for free or reduced price lunch would cost one-fourth as much.

In low cost states this would add to the existing annual cost per pupil ($7,490) serving 13 grades K-12 of $7,490 a total of $288 per student per year (5/13 X 750 = 288). This represents a 3.85 percent increase in costs which could obviously be split between local school districts and the states. If this service was provided with bi-monthly visits (6 times per year instead of 12) and provided only to the approximately 50 percent of our student population that qualifies for free or reduced price lunch the cost per child could be reduced by 75 percent.

Full day preschool for all 3 and 4 years olds

The least expensive and most effective way to provide full day pre-school for all 3- and 4-year-olds would involve using existing school bus runs to transport the children, housing the classes in existing schools or nearby low cost alternative facilities (to eliminate extra costs for more school nurses, food services, administration, etc.) and creating a partnership with a community organization that provides certified, well-trained teachers, class sizes of 15 and a full-time aide for each classroom. And uses an evidence-based preschool curriculum.

Assuming in low cost states a total teacher expense for salary and benefits of $50,000, for teacher aide salary and benefits $33,000, and $20,000 per classroom for additional required buses due to the extra students, teacher and aide training and supervision, equipment, materials, supplies and utilities the cost per pupil per year would be $6,867 ((50000 + 33000 + 20000)/15 = 6867). This pre-school program student population would be two-thirteenths of the regular K-12 school population and it would add $1,056 (2/13 X 6867 = 1056) to the existing $7,490 yearly cost per K-12 pupil.

This $1,056 would represent a 14 percent increase in per school budget costs over the existing $7,490 per pupil cost in low cost states. These costs could be cut in half if pre-school for 3- and 4-year-old children were only offered cost free preschool to the students from families eligible for free and reduced price lunch.

In high cost states all of the expected costs for a full-day pre-school program for all 3- and 4-year-old children would increase by approximately 25 percent from the costs anticipated in low cost states and the expected cost per present K-12 pupil would increase by $1,320 (1.25 X 1056 = 1320) which would represent a school budget and per pupil cost age increase of 6 percent (1320/22552 = 0.06). It’s worth noting that high quality preschool is an excellent economic investment that more than pays for itself in the long run.[lviii]

This cost could be reduced by one half by making free pre-school available only to 3- and 4-year-old children from families that qualify for free or reduced price lunch. These numbers might seem like a stretch for local school budgets but some school districts are already doing this with local voter approval.[lix]

It is also worth noting that a switch to defined contribution pension plans in high cost states would eventually save school districts 5 percent of their present per pupil costs. A switch by school districts in high cost states to less costly health insurance plans with higher deductibles and co-pays like those utilized in low cost states would eventually save school districts in high cost states another 15 percent of their present per pupil costs.

School districts in low cost states need to spend more to pay for home visits for all children ages 0 to 5 and for full-day pre-school for 3- and 4-year-old children, especially children from poverty. School districts in high cost states need to add these same services for children ages 0 to 5 and could pay for both by reducing employee pension and health insurance costs.

Strategy 3: Equitable Funding

Most states use a combination of state funding, local school property tax funding and a small amount of federal funds to pay for their schools. The biggest problem with this system is that the wealthier your school district is the more per pupil you have to spend. Educating poor children requires more one-on-one tutoring for a greater percentage of students, particularly with new more challenging Common Core standards.

In many states successful lawsuits have effectively pointed out the discrepancy in these funding levels and the need to redirect funding to the districts with the highest percentages of students who receive free and reduced price lunches. But legislators don’t want to agitate high tax paying suburban parents who show up at the polls.

In many urban and rural areas with larger concentrations of poverty and minority students a greater percentage of the voters are mostly white senior citizens. Given their fixed incomes they won’t vote to increase local school property taxes to provide more support for the schools that serve more minority and poverty children.

The result is a treadmill where suburban schools that require less funding actually receive more state aid for education and more local school property tax funding and school districts serving more minority and poverty students receive less than they need.

The simplest solution to this conundrum is a state-wide property tax coupled with state and federal funding that creates an equitable distribution with more total funding per pupil going to school districts serving poverty students.

How much more per pupil for poverty students?  The data from the Campaign for Fiscal Equity lawsuit in NY State indicated at least 25 to 50 percent more per poverty pupil.

If non-poverty student education is funded at a rate of $10,000 per student per year from all sources including federal, state and local sources, poverty student funding rate would need to be $12,500 to $15,000 per student per year.

Implementing such a system in New York State and many other states would require a regional cost adjustment based on different costs for school districts to operate in different parts of the state. Also, since this funding arrangement is significantly different from the present system in place in most states it would require a multi-year phase-in process. (Note: Federal funds go mostly to districts serving more poor and minority students. However, federal funding amounts to less than 10 percent of the total money spent on education in the U.S. Federal funds would help states move toward this suggested solution but would be insufficient to fully fund the recommended change.)

I fully realize the political difficulty of what I’m proposing. I also know that some of our politicians are already pushing in the opposite direction.[lx] But, I am an educator not a politician and my priority is student learning.

Funding inequity needs to be addressed if we are to improve our schools.

It’s been 60 years since Brown vs. the Board of Education ended “separate but equal” education in the U.S. “Separate and unequal” doesn’t work, either. And there is nothing in the data I’ve seen that tells me it will ever work.

Should suburban school districts continue to be allowed to raise local taxes to provide “extras” for their students?

No. If parents and guardians want to shell out money to give their children lessons above and beyond what school districts offer, they should do it on their own and not require schools to do it for them.

Public schools should not be promoting inequality.


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(Sections in italics are fictional stories based on composites of multiple actual experiences.)

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