We did not notice this interesting nugget of news regarding the Benton-Carroll-Salem school district until our attention was brought to it thanks to an e-mail question. However, this is very interesting. A school district actually opened up its collective bargaining agreement and got real concessions, a 2.5 percent salary reduction.
That’s right, an actual reduction, not a “freeze” that still includes step increases and longevity. To be fair, this contract may still include those, but by embracing an actual cut, the Benton-Carroll-Salem school district shows that it understands it must take serious action and not just pay lip service to the concept of reform.
Unfortunately, these moves are not enough to drag the district out of a nearly $8 million hole by 2016. But, just imagine what the hole would be like without this move.
Granted, part of the savings achieved by Benton-Carroll-Salem is through staff reductions, but the news shows that the message of reform, as painful as it is to hear, is beginning to resonate. Last year, Middletown Schools did something similar.
These are isolated cases, but they show the way forward.
The Buckeye Institute has long maintained that real compensation reform would mean more closely aligning public sector pay and benefits with that found in the private sector. Our Six Principles for Fixing Ohio report from last year goes into a great deal of detail on how to accomplish this.
We also ran an exercise last year where we looked at five-year projections from all of Ohio’s school districts using numbers submitted to the Ohio Department of Education in October of 2010 (before the change from the Strickland to the Kasich Administration).
During that effort, we found that roughly 91 percent of the school districts projected a deficit in their ending cash balance by 2015. The aggregate deficit for all schools exceeds $7.6 billion. By 2015, compensation package costs would swallow 96 percent of projected revenues. We then applied a 10 percent compensation package cut to each school district’s financial projections and then allowed the compensation package costs to grow by 3.2 percent each year. Those calculations, in most though not all cases, got school budget projections back in the black.
By the way, that was without laying teachers off. Just something to keep in mind.