In a recent Letter to the Editor, the SEA mischaracterized the Board of Education’s position on the 2% budget cap and then criticized the position as “inaccurate” and “misleading.” The Board’s actual statement on the budget cap, which appeared in our 9/14/14 Statement on Negotiations, was: “Put simply, the Association seeks salary increases that are inconsistent with the district’s financial planning in view of increasing budgetary costs and the State’s two percent cap on increases on the tax levy.” The Board stands behind this statement.
Under NJ law, the tax levy attributable to Summit’s school budget may not increase more than 2% in a year. Personnel costs (salaries, stipends and benefits) represent almost 80% of the district’s budget. The remainder of the budget funds the cost of special education; other curriculum and instruction needs; co-curricular programs; facilities management and operations; technology; and other expenses associated with the district’s programs and operations. The cost and complexity of almost every area of the budget have grown significantly in recent years, a trend that we expect will continue.
Ensuring the district’s financial health is one of the Board’s most important responsibilities. Our job is made immeasurably easier by the administration’s skilled planning and oversight, and we thank them for their sound decisions and careful stewardship of the district’s assets. We also acknowledge the community’s generous support for our schools. Still, Summit’s resources are not unlimited. The Board must continue to achieve sustainable fiscal stability, not only for current students but for generations to come.
We will address the assertions in the SEA’s Letter, point by point:
Salary – The SEA emphasizes that some NJ districts have entered into contracts that provide more than a 2% salary increase in a given year. We agree. This is not a point of controversy. The restriction that applies to Summit provides that the tax levy for increases to the education budget cannot exceed 2%. In other words, if personnel costs increase more than 2% in a given year, then the aggregate amount available to fund non-personnel costs must be reduced proportionately. It is a zero sum game.
Of course, salary increases are just one part of the picture. A settlement must be reviewed in its entirety to understand other concessions that may have been made by the district or union as part of the overall agreement.
Budget history – Foresight, planning and discipline have enabled the district to adopt flat or nearly flat budgets during each of the last three years. We achieved this feat while maintaining our strong academic programs, suitable class sizes, sizable co-curricular offerings and commitment to community service. Importantly, we also grew programs and offerings where warranted. We acknowledge that these accomplishments would not have been possible without the leadership of our administrators and the dedication and professionalism of our staff. We thank them for their contributions and we see no evidence of the SEA’s assertion that “these budgets have begun to weaken our school system.”
Each year presents a new opportunity to review our offerings and cost structure and to make adjustments. We increase our spending when it is the right thing to do and we maintain levels or decrease spending when it is the right thing to do. We certainly do not believe that the district should spend money unnecessarily just because the tax levy cap permits us to do so. Please also remember that district budgets are subject to review by the Board of School Estimate.
We are confused by the SEA’s suggestion that the district access what the SEA calls “budget cap surplus.” We believe that it would be poor financial planning to spend the fund balances that have been carefully established for emergencies, unexpected needs and opportunities. If the SEA is instead suggesting access to so-called “banked cap” - which is legally permissible - then it is advocating that the district nullify savings from previous years and ask taxpayers to shoulder a greater increase in tax levy today.
Employee healthcare contributions – Effective with the 2011-2012 school year, Chapter 78, the 2011 health benefits reform law that applies to teachers and other members of New Jersey’s public sector, mandated that school employees pay a specified portion of their health insurance premiums. While healthcare insurance contributions were and are commonplace in the private sector, they were unusual for school employees prior to the adoption of Chapter 78. In 2009-2010, the last school year before Chapter 78 was adopted, only 13% of the contracts analyzed by the New Jersey School Boards Association had any employee contribution at all. We understand that this change has been difficult for SEA members. However sizable healthcare insurance contributions have been a longstanding fact of life for private sector employees.
Under Chapter 78, an employee’s contribution to his or her healthcare coverage ranges from 3% to 35% of the premium. The precise amount within that range is a function of the employee’s salary and the plan that they choose. Based on our data, SEA members typically pay between 5-10% of their salary for their healthcare insurance. The SEA implies in its letter that “in many cases” its members “pay 20% of their salary or more” for their healthcare coverage. That is simply inaccurate.
Stipends – Last year, in preparation for the current negotiations, the Board undertook an extensive review of stipends paid by other districts for comparable co-curricular activities. We reviewed both state averages as well as specific stipend practices for over 20 districts. We found that Summit’s stipends are well above state averages in almost every category and again, in almost every category, are comparable to or exceed the stipends offered in the other districts that we reviewed.
The Board seeks to reach an agreement that will attract, retain and reward employees. We believe that it should be competitive with similar districts and economically sustainable for our community. We acknowledge that our students and district have benefited greatly from the collegiality and teamwork of our staff, and we want to maintain this culture.
We are disappointed that we have not reached an agreement despite our 13+ months of negotiations. We urge the SEA to adopt a solution orientation and to redirect its activities and energies toward actual engagement with the Board that will lead to an equitable and amicable agreement. After all, we believe that the most productive discussions occur in the negotiating room – not in the media.