Rochester Schools Reduce 6.5 to 7.5 Percent Raises by Half-Point – Declares Budget Cut

In the midst of an ongoing statewide debate about the meltdown of school funding, the Rochester School Board approved a contract with its teachers union last December that it states will “save millions of dollars over the longer term in legacy costs. …”

One of the key concessions?

The unions agreed to a 0.5 percent decrease in across-the-board raises for teachers with up to 11 years of service. What would have been annual raises of 6.5 to 7.5 percent will now be 6 to 7 percent. That would amount to about $345-a-year savings per teacher in the district, based on the average 2010 teacher’s salary of $69,184.

There will also be concessions on health care. A teacher went from paying nothing at all for the base plan to a $115-per-year payment. The annual deductible went from $0 to $100 for that same single base plan.

“The collective bargaining process involves compromise on the part of both parties, and the district will save millions of dollars over the long term in legacy costs as a result of this concessionary contract,” wrote Debra Hartman, the district’s spokeswoman, in an email.

But Michael Van Beek, education policy director at the Mackinac Center for Public Policy, said an opportunity was missed because employee compensation is typically the largest cost for a school district. According to the Michigan Department of Education, 87 percent of Rochester Community School’s general fund expenditures went to compensate its employees in 2009, including 65 percent for employees covered under the teachers union contract.

The Rochester administration claimed that it has made nearly $28 million in cuts since the 2001-02 school year. Budget documents on its own website show its general fund expenditures have grown from $110.6 million in 2001-02 to $158.8 million in 2010-11. That data is confirmed by information available from the Michigan Department of Education.

Other superintendents have defended claims that they have cut their budgets even though documents show that they are spending more money despite the cuts.

Van Beek called out Bay City Public Schools as an example of a school district that spent more money every year but claimed to the media that cuts were being made.

Bay City Public Schools reported that it has “reduced operating expenditures” by more than $24.6 million since 2001. However, according to the Michigan Department of Education, Bay City’s general fund expenditure was $72.9 million in 2001, and it has budgeted $74.3 million in 2011.

Van Beek said the Bay City Public Schools was engaging in “creative accounting.” Superintendent Douglas Newcombe responded to Van Beek’s claims in the Bay City Times, calling them “total nonsense.”

But Van Beek pointed to Rochester’s half-percent raise reduction applied to 6.5 to 7.5 percent raises as an example of a budget cut that won’t reduce overall spending.

“By not sufficiently containing the rising expenses contained in the teachers union contract, Rochester is forced to shift more funds from other budget areas to cover these increased costs,” Van Beek wrote in an email. “These shifted funds are then presented as ‘budget cuts’ or ‘budget reductions,’ when in actuality the overall budget has not been cut or reduced, and the expense to taxpayers for the district is actually higher.

“If shifting costs from one budget area to another while the overall budget stays level or grows is a ‘budget cut,’ then when would districts not make cuts? By this definition, only if districts spend more money on every single line item in their budgets each year would they avoid ‘budget cuts.’ It’s important for taxpayers to understand that when schools say they’ve made ‘budget cuts,’ it doesn’t mean that they’re spending less. Schools on average have grown more expensive on the whole over the last decade despite all of these purported ‘budget cuts.’“