Posted by Len Mullen on January 27, 2010 at 23:03:18:
If you look at the 2011 default budget compared to 2009’s actual spend, you may be surprised to find that while we were enduring furloughs, pay freezes, and layoffs, the school budget has increased 11%. If you add in the cost of the new teachers contract, it has increased 12%. A 12% increase in an era of deflation and cost cutting.
The bad news is that the 12% increase is completely contrived. First, consider the contract. The teachers union has negotiated a contract that includes a lump sum payment in the first year and double step increases in the second year. Mr. La Salle has used current headcount to calculate the cost. In reality, the long service teachers will retire after their lump so that that lump sum weights their pension. These teachers will be replaced with short service teachers who will reap the double step in the second year. The cost of the contract is likely to DOUBLE in the second year.
The second time bomb in the budget is the insurance line item. Every year we vote on the budget BEFORE the insurer sets the costs for the year. They provide a maximum ceiling and we budget to that. This is ALWAYS several percent higher than the actual cost. The difference is refunded to the taxpayers. This year the ceiling was 22%. Mr. La Salle got that maximum reduced to 13% to show a better number to the budget committee, but the maximum ceiling has no impact on actual cost. In reality, he just spent next year’s surplus.