What We’re Really Talking About When We Talk Montclair School Budget Problems

As the budget debate unfolds here – and as we wrote about earlier this week – it’s been plagued by a host of distraction and disinformation. Rather than talking about the real budget issues, the usual antagonists and opponents have spent every second they can trying to distract and attack. Their focus on the budget debate? A bunch of relatively small items like technology, legal fees, and a normal-sized central office that aren’t causing the big budget problems our district faces.

That’s been their strategy all along. Because if the debate focuses on the real, important issues – in this case, the real cost drivers – then it will be obvious to everyone where the challenges lie. And they aren’t with the PARCC, and they can’t be blamed on the administration.

Helpfully, the district has provided a nice little pie chart that makes things very clear:

www.montclair.k12.nj.us WebPageFiles 2461 budget 15 16 150302.pdf

The visual obviously makes things pretty clear, but just to add some hard numbers to it, we’ve created a helpful table with the percentages…

Item Dollars Percentage
Benefits $19,763,404 16.86%
Salaries $77,090,226 65.75%
Professional Services $9,914,860 8.46%
Tuition $3,929,410 3.35%
Utilities $2,016,833 1.72%
Classroom Supplies $1,437,401 1.23%
Judgments $1,000,000 0.85%
Supplies and Materials $678,431 0.58%
Insurance $706,538 0.60%
Textbooks $389,186 0.33%
Capital Outlay $153,938 0.13%
Food Service Subsidy $130,000 0.11%
Conference and Travel $42,616 0.04%
Total $117,252,843 100.00%

That’s right. If you add up JUST the employee benefits and salaries, you’re looking at 82% of the budget. Here’s another way to put that…

costs

And one more look at it:

costs2

In a $115 million budget, over 80% of it – $96 million is in employee salaries and benefits. Only $20 million is in what we’re calling “the rest” – other budget areas that much of the MCAS focus has been around. In order to balance a $8 – $10 million shortfall, you’d have to cut almost half of that. If you’re serious about doing something about the budget, you’d got to go where the money is. And the reality is that this is going to be a problem year after year.

Money talks, as they say, and in the case, the way that MCAS is playing politics around this shows what their real agenda is. As Michelle Fine admitted, they aren’t a real grassroots group – they’re just a proxy for the MEA to attack the district and, in this case, protect their members from where the cuts need to be made. We should remember that the MEA (and their MCAS allies) are not even close to being honest partners when it comes to fiscal responsibility, having aggressively fought the health care change last summer that saved the district $1.5 million – a whole lot more than the small items that they’re complaining are to blame for the budget problems.

Why did this become a problem? The most obvious place to look is the last teacher contract. In 2012-13, we raised salaries 2.85%. In 2013-14, we raised salaries 2.7%. And in 2014-15, we raised salaries 2.5%.

Cumulatively, those annual raises amount to 8.26% of new recurring costs accrued over 3 years. That’s millions and millions of dollars each year. This isn’t even an argument against those raises – we just want to point out what’s increasing costs here, in order to put an end to the distract and attack tactics that the MEA and MCAS have been trying to use during the budget debate.

 Percentage increase 100
1.0285 * 100 = 102.85
1.027 * 102.85 = 105.62695
1.025 * 105.62695 = 108.2676238

And, of course, salaries aside, there’s the good health care benefits the district provides under the contract that the district has pointing out are soaring this year and will make for a huge increase in costs.

We want to be really clear here – this post is not an argument against providing folks with good health care benefits or paying whatever is fair by any means, we’re just pointing out that that’s where the money is going and why these costs exist. So when we talk about costs in this budget discussion, it would benefit everyone if we stopped focusing on the distractions and attacks aimed at changing the subject, and be realistic about what’s really driving our costs, and where the responsibility is.

Right now the district is talking about a 5+% levy increase. With each 1% increase equaling approximately $89 in new school taxes, according to the district, that’s a fairly hefty tax increase of $450+ that each family here is being asked to bear. People can decide for themselves whether it’s worth and whether we’re getting results commensurate with it, but it’s important that we know what’s driving that increased cost for taxpayers and it’s not technology, PARCC, lawyers, or any of that. It’s MEA salary increases and health benefit increases. In order to make any sort of sustainable progress on the budget, those issues will have to be dealt with, period.

There is, incidentally, reason to worry about all of this. The mayor will be appointing two new school board members pretty soon, and in our mind at least his nominees thus far have not shown much of any willingness to stand up to the MEA or MCAS. With these important contract negotiations coming up that could cost us all quite a bit in the long term, it’s important that the mayor makes better choices than he has so far. We’ll definitely be paying close attention to the process.

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