After my post yesterday, a district employee made a comment that presents a good opportunity for everyone – especially GPPSS district employees – to examine what has transpired in the GPPSS over the last ten years. The comment was:

I make what I did in 2005. I do not keep up with the cost of living. I am expected to journey on taking pay cut after pay cut.

I can understand the frustration. I have spent countless hours – even now – examining the issues and exploring options. I would not do this unless I cared. So let me ask this back: Isn’t the question just as relevant in regards to the district’s revenue and expenses? You simply cannot accurately judge compensation without understanding the district’s means to pay them. That is what this article attempts to do.

Because I am eager for teachers and all district employees to understand this dynamic, I went back and compared critical district statistics from last year back to 2005, just as my commenter logically does, and put the ones that matter the most in the table below. I also list the data sources so nobody thinks I am just making this up. Please have a look and I’ll offer my comments below the table.

2005-to-2015-comparison

Let’s take this line by line:

  • Student Enrollment: Enrollment has fallen 8.5% in this time period. That’s a loss of over $8.5 million per year. I have written a ton about the problems caused by declining enrollment. Read this one for a refresher.
  • Total Teacher Staff (FTE): Logically when we have fewer students, we need fewer teachers. But notice that teaching staff FTE is down by 15% – nearly DOUBLE the rate of loss of student enrollment! The losses were worse for non-teachers, whose ranks fell from 432 to 294 from 2002 to 2010 – a massive 32% reduction. Why are people so much more willing to sacrifice jobs and isolate the impact on the problem on so few rather than distribute the burden? Everyone should ask themselves this question.
  • MPSERS Rate: The state requires local districts to fund the Michigan Public School Employee Retirement System (MPSERS) by applying a percentage to total employee salaries. Those monies then go to the state which funds the school employee pension and retiree health benefits they receive. This percentage has gone from 15% to 26% in ten years. You’ll see the impact of this in the rows below. Huge, huge problem. In short, state funding has not kept pace with MPSERS cost.
  • Total MPSERS Cost: From explanation above, you see that MPSERS costs have increased by over $5 million per year despite the massive staff cuts. And recall all the lost revenue from declining enrollment and state and local revenues are not making up the difference.
  • Total Salaries: This has declined more on account of massive staff reductions, as seen from notes above.
  • Total Salaries and MPSERS Cost: Despite the massive reduction in staff FTE levels, this cost in aggregate is higher than ten years ago. In short, school employees compensation has shifted from salaries to retirement.
  • Average Teacher Salary: Every teacher has a different experience here and many issues effect this number, but in total, the average salary is 8% higher than ten years ago, slightly higher than state and local revenue per pupil growth in that time. Yes, I know employees pay more for healthcare. But let’s look at…
  • MPSERS Cost per Teacher: This has nearly doubled in ten years. Employees don’t see this in their paycheck, but it’s a massive benefit that comes at a great cost. At these rates, given teacher FTE levels, this yields an annual cost increase of nearly $4 million. And again recall loss of revenue from enrollment. It’s a nearly 100% cost increase per teacher against a 7% revenue increase per pupil.
  • Employee Benefits for Instruction: This will capture MPSERS and healthcare. It has increased 27% in ten years even though teaching staff is 15% lower.
  • Total State and Local Revenue: This is down just 2%, but doesn’t tell the whole story, but hold these thoughts as we look at more figures below.
  • Total Salaries and Benefits Cost: These have increased 3% in total despite the huge staff cuts discussed above.
  • Total Salaries and Benefits Cost per Pupil: This has increased 13% in ten years, almost double the rate of growth of…
  • State and Local Revenue per Pupil: …that has grown just 7% in ten years. In short, this is the problem.
  • Salary and Benefit Cost per Pupil as % of total state and local revenue per pupil: As salary and benefits consume more and more of the operating revenue we receive, it means (a) we can afford less staff and (b) we cut back or eliminate investment in anything that isn’t human resource related. Think books, building repairs, computers and other technology. Doing all the math in these figures, this means that the district has $4.6 million less per year to invest in anything that isn’t a human resource.
  • MPSERS Cost as a percentage of total state and local revenue: This means that MPSERS is where most of that money is flowing. This rate of increase outstrips everything else, creating downward pressure on staff levels, staff salaries, and non-human resource investment.

This is my attempt to boil the problem down. I sincerely hope, teachers, other district staff, administration, board members, candidates, taxpayers or anyone else who has an opinion on these issues reads this and takes the time to understand it.

Now, let’s recall ALL of the ways the district explored options to address this problem. Which ones were acceptable to the community?

  • Outsource staff?
  • Raise class sizes?
  • Close schools?
  • Cut technology spending?
  • Cut building repair spending?
  • Increase student fees for athletics and extra-curricular activities?
  • Cut non-teaching staff?
  • Participate in schools of choice?
  • Reduce the high school course offerings (6 period day)?
  • Increase taxes?

I welcome whatever suggestions teachers or anyone else has, but from now on when people want to criticize the path the district is on, I will merely send them this article and ask for their suggestion about how to solve this very real problem.