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News Analysis | October 4, 2011
President Obama’s jobs plan, currently on life support in Washington, DC, would either only provide funding for laid off public workers for less than one year or would cover three years’ worth of compensation for less than a third of the promised jobs, a MacIver News analysis found.
In a column in the Milwaukee Journal Sentinel and in subsequent remarks, including those made during a recent visit to Wisconsin’s largest city, US Department of Labor Secretary Hilda Solis said “The president’s jobs bill would give Wisconsin $536 million to reverse layoffs of up to 7,400 educators and first responders.”
According to her own figures, the Jobs bill would therefore provide $72,432.43 per job.
However, the average annual compensation for educators in Wisconsin is often much higher, for example, the current average annual compensation for a Milwaukee Public School System teacher is $101,091. Research conducted by PolitiFact noted that two years earlier, eight school districts in Milwaukee County had average teacher compensations in excess of $100,000 per year: Greendale, Greenfield, Shorewood, Cudahy, Fox Point, South Milwaukee, Franklin and Nicolet. Statewide the average figure for public school teachers’ annual compensation for the 2009-2010 school year was $86,297.
However, as the Carolina Journal discovered, Sections 204-209 of the bill include “Maintenance of Effort” provisions requiring states to “meet the requirements” of the law for an additional two years. A White House spokeswoman told Carolina Journal that the bill includes no unfunded mandates. (The Carolina Journal is a project of the North Carolina based John Locke Foundation.)
Unless states pick up the funding for these jobs after the first year, it’s unclear how the teachers and first responders supported by the Obama Jobs plan could be paid. If the jobs bill is expected to cover all three years, then the total number of jobs ‘created or saved’ by the bill should be reduced by a factor of three, meaning for three years the bill could reverse the layoffs of 2,467 teachers and first responders.
Again, this figure does not account for the discrepancy in average compensation for teachers and the average salary allotment figured by the White House
Moreover, Milwaukee Public Schools issued more than 500 layoffs this year after unions there refused to reopen existing labor contracts that had been negotiated under the previous collective bargaining laws. Milwaukee, therefore, had by far the most layoffs of any district in the state, so it stands to reason that a disproportionate number of ‘saved’ public sector jobs would be in the more expensive MPS district.
In either case, the numbers provided by the Administration do not appear to add up.
[Madison, Wisc…] An analysis of data provided by Milwaukee Public Schools paints a bleak picture for the financial stability of Wisconsin’s largest school district.
A report issued this week by actuaries at Gabriel Roeder Smith & Company shed light on a $2.398 billion unfunded liability when it came to Other Post-Employment Benefits (OPEB) in Milwaukee Public Schools. These funds, which cover items like health and life insurance, are applicable to thousands of retirees who won’t set foot in the classroom this year, and thousands more candidates who never have.
“Our continued analysis shows that MPS does not suffer from a shortage of taxpayer funding,” said Brett Healy, President of the John K. MacIver Institute for Public Policy. “Rather, the children of Milwaukee are suffering from the politicians’ inability to say ‘no.’”
MacIver’s review of the data found:
Click here for MacIver’s analysis.
“The depth and breadth of retirement benefits at MPS is staggering,” said Healy. “To have school board members qualifying for full benefits after just 8 years and over 5,000 individuals in the system who have never taught a single day in their lives yet are in line for a lifetime of health benefits, is astonishing.”
The Governmental Accounting Standards Board (GASB) is the body that sets the accounting standards for state and local governments. In 2004, GASB imposed regulations forcing local governments, including school districts, to provide full transparency of their future health care liabilities. As a result, these units of government were forced to provide accountable reports detailing where and how health care funds were being spent and where the money was coming from to foot the bill. On Tuesday, a committee of the MPS Board received the latest actuarial assessment of their non-pension related obligations.
“The children of Milwaukee deserve better,” said Healy. “To saddle their future with this level of debt is unfair and just plain wrong and if the school board does not make dramatic changes soon to stem the benefit tsunami, MPS will have no other option but to declare bankruptcy.”
Milwaukee taxpayers are on the hook for nearly $2.4 billion in unfunded liabilities thanks to their school district’s retirement programs – and that doesn’t even include the cost of providing pensions for MPS retirees.
In 2004, the Government Accounting Standards Board imposed regulations forcing local governments, including school districts, to provide full transparency of their future health care liabilities. As a result, these units of government were forced to provide accountable reports detailing where and how health care funds were being spent and where the money was coming from to foot the bill.
An analysis of data provided by Milwaukee Public Schools paints a bleak picture for Wisconsin’s largest school district.
A report issued this week by actuaries at Gabriel Roeder Smith & Company shed light on a $2.398 billion unfunded liability when it came to Other Post-Employment Benefits (OPEB) in Milwaukee Public Schools. These funds, which cover items like health and life insurance, are applicable to thousands of retirees who won’t set foot in the classroom this year, and thousands more candidates who never have.
MPS’s actuarial liability, the unfunded debt created through providing OPEB funds, is growing at an alarming rate as well. From July 2007 to July 2009, this shortfall increased from $2,222.7 million to the current figure we have today – a gain of nearly $175 million in just two years. While retirees are making use of their benefits, the District is failing to cover the bill, instead deferring much of the cost for future payment because of budgetary concerns. While this removes the problem from the spotlight in the short term, it creates a looming cloud of debt that may cripple MPS in the future.
However, these benefits, which cost hundreds of millions of dollars annually, don’t exclusively go to teachers. The wide scope of OPEB reaches to spouses, secretaries, mechanics, lunchroom workers, custodians, and even board members – who need just eight years of service to qualify for full benefits. While 12,143 active and retired teachers (and their spouses) claimed benefits, 5,030 of the individuals served by Milwaukee’s OPEB have never taught a class in MPS.
At an average annual cost of $10,939.71, these non-educators covered by MPS’s pension benefits added over $55 million to the district’s burden between 2009 and 2010 alone.
This obligation comes from a funding disparity that allows OPEB costs to be set aside and accumulate debt, essentially creating a larger burden for future generations to deal with. Employer contributions to this fund have historically fallen way short of annual OPEB costs, covering only 29.8% of the actual price of insuring retirees over the past three years. These obligations, which hover between $175m and $200m annually, present a major burden on educational budgeting, and each year that the full cost is not met shifts a greater expense to be paid at a future date. As a result, approximately $388 million in obligations have added up in the past three years alone.
Essentially, as this liability continues to be left to fester, it creates a growing shadow over the future of Milwaukee’s education. GRS projections predict that this accrued liability will hit nearly $5 billion by 2017, and is projected to continue to grow at a steady rate. If the current, pay-as-you-go funding system is left in place, a best-case scenario prediction accounts for just $57 million in assets in that same year, leaving a liability that is only 1.4% funded.
As retirees increase and the number of active teachers remains relatively static, this is a problem that will only continue to grow unless drastic measures are taken. This annual actuarial liability must be reduced, while at the same time the employer contributions must increase in order to make a dent in MPS’s enormous obligation. This is a problem that stands to slowly suffocate public school funding in Milwaukee, taking funding from areas like teacher recruitment, facilities upgrades, and adopting new technology. This OPEB liability is the $2.4 billion elephant in the room, and it must finally be addressed.
By Christian D’Andrea
MacIver Institute Educational Policy Analyst
MacIver News Service [Milwaukee, Wisc] The Milwaukee Public Schools Board of Directors approved a 2010-2011 budget Thursday night that will bridge a $33 million operating deficit through a combination of layoffs and employee furloughs.
The Board did not amend the Superintendent’s proposed budget to cut administrative costs or non-classroom personnel, however they did make some alterations to his proposal. They included new expenditures to finance new audio/visual equipment for their meeting space and added two new labor negotiator positions.
The Board shot down a budget amendment Thursday night that would have traded a position in the superintendent’s office for four positions in the classroom.
Director Annie Woodward proposed the amendment, and was the only member of the board to vote for it. She would have eliminated the position of administrative coordinator, which draws a salary of $99,129 plus $73,554 in benefits. According to Woodward, that’s enough to pay for four para-professionals, who work directly with students in the classroom.
Currently, there are four people who work in the superintendent’s office, including the superintendent. Three new positions are being added to the office next year, at the request of Dr. Thornton, who is bringing some of his own people with him to MPS. MacIver News Service previously reported previously how he and the Board will be doubling the Superintendent’s office’s budget next year.
Thursday night's meeting of the MPS School Board was sparsely attended.
“The board would be making a serious mistake to eliminate this position,” William Andrekopolous, the outgoing MPS superintendent, pleaded with the board. He said the position is important to Dr. Thornton, who becomes MPS’s superintendent on July 1st.
“This position in the superintendent’s office is critical. There’s a highly skilled individual in this position. I’ve had two conversations in the past 48 hours with Dr. Thornton. This person has been a key in his transitioning to the district and a key in his vision in how to coordinate and run the superintendent’s office,” Andrekopolous said. “You have a new superintendent coming in and this is not the message you want to send this superintendent.”
Director Woodward said in support of her amendment, “With this many people in this office, I just see that somewhere down the line we’re going to have to cut back.”
Andrekopolous argued, “Over the years I have made cuts in the superintendent’s office. We have cut other administrative positions out of the superintendent’s office and clerical staff out of the superintendent’s office.”
Before voting against the amendment Director Terry Falk said, “We’re bringing in a new superintendent and I want to give him enough rope to either lasso the problems and bring them in, or enough rope to hang himself.”
The Board voted to spend $10,000 for audio-visual upgrades to their meeting space in the central office auditorium, after Board President Michael Bonds trimmed the original request for $300,000.
The current a/v system used by the Board is only two years old and includes a microphone system, video cameras and data projectors.
“Everything is new, including the wiring. The only thing we did not replace is the screens,” said James Davis, MPS Technology Director.
Ten thousand dollars would be enough to replace the screens.
“I think the main request for upgrading the system has to do with moving to the electronic school board format, and problems that we are having with the screens,” said Board Clerk Lynne Sobzak. “If we do move to an electronic format, the plan is to remove the central screens and replace them with monitors on the sides, so the public could follow along with the electronic system.”
Allowing the public in attendance to see what Board members see is the stated reason for the purchase, although it may lead to even more expenditures in the future.
“Our tentative plan would be to do exactly that. We would probably assure that board members would have individual laptops in front of them so they could do video presentations,”said Davis.
The board voted 8 to 1 in favor of the amendment. Director Tim Petersons voted against it.
The total number of layoffs, including those of teachers, will depend on labor negotiations. The District is attempting to get the teachers’union to accept a lower-cost health insurance plan.
Perhaps sensing difficulties in those negotiations, the Board also added two new labor relation positions to the District’s Department of Accountability
The board passed the amended superintendent’s proposed $1.34 billion budget by a 6 to 2 vote. Directors Woodward and Tim Petersons voted against it, and Director David Voeltner voted present.
By Bill Osmulski
MacIver News Service
MacIver News Service - [Milwaukee, Wisc...] Although overall enrollment and student performance in Milwaukee Public Schools has been down for years, administrator salary increases have made huge gains.
MPS lags its big-city peer districts in reading and math scores and has been listed as a “District Identified For Improvement” by the US Department of Education since 2006. While the district saw its enrollment decline by more than 8,000 students during those years as well, some MPS administrative salaries have jumped by nearly 40 percent since 2006.
Dozens of people make six-figure salaries at MPS. It’s difficult to identify all of them, because oftentimes, multiple people have the same job title and their salaries are combined into one line on the budget. However, when only one person holds a particular title, their salary is easily identified.
Using that limited information, MacIver News Service was able to identify two positions in the central office with anticipated salary increases of 38.6 percent from five years ago. Those positions are Director/Board Clerk (in the office of board governance) and the Communications Officer –Information (in the communications and public affairs office).
In the proposed 2011 budget, the board clerk will be making $138,683 (the same as last year). The Communications Officer will be making $111,283 (up nearly $5,000 from $106,491 last year).
Three positions with salary increases of more than 20 percent from five years ago include : School Nutrition Administrator (22.4 percent), Director of Labor Relations (25.4 percent), and Director of Student Services (28.5 percent). The salaries for those position in the proposed 2011 budget range from $106,553 to $132,162.
None of these calculations take into account increases in health and retirement benefits.
The position with the largest increase is the superintendent. In 2006, the position paid $160,000. When Gregory Thornton takes over the position this summer, he’ll be pulling in $265,000. That’s an increase of 65 percent from five years ago.
The district is currently working through a $33 million budget deficit from last year, and Superintendent William Andrekopoulos has proposed cutting as many as 680 employees to bridge the gap. Yet, as we reported yesterday, spending within the Superintendent’s office is slated to double from this year to next. We’ve also reported on the 17 full-time in-house painters who average $98,000 in annual salary and benefits.
MacIver News Service has filed an open records request with MPS for the exact number of current district employees who make more than $100,000 a year in salary, and will report that information when the request is fulfilled. According to an online database maintained by JSOnline, however, in the 2008-09 school year, 42 MPS employees in the central office alone had base salaries in excess of $100,000 with fringe benefits raning from $15,653 to $83,856.
MacIver News Service – [Milwaukee, Wisc…] The Milwaukee Public School district is facing a $33 million budget shortfall and administrators have said more than 680 employees could face layoffs. Yet, the MPS superintendent’s budget is set to double next year under the proposed 2011 budget.
This year the superintendent’s office was budgeted $721,111. Next year it could be getting $1,566,565, unless the MPS School Board makes changes. Much of that increase can be traced to the district’s incoming superintendent, Gregory Thornton.
Incoming MPS Superintendent Gregory Thorton chats with current Superintendent William Andrekopoulos.
Thornton will be making $265,000 in salary, compared to the current superintendent’s salary of $175,062. He is also adding new positions within his office.
Thornton has picked Naomi P. Gubernick to be his chief of staff at MPS for an annual salary of $138,671. She currently serves as his chief of staff at Chester Upland School District in Pennsylvania.
“It is always the prerogative of an incoming Superintendent to make adjustments to staff,” said explained Roseann St. Aubin, the district’s communications officer. “Dr. Thornton is pursuing the establishment of a Chief of Staff position for day-to-day assistance in operations and a community partnerships position to enhance our relationships with the community.”
A new community relations director would make $96,166. A third position, the chief academic officer, will pay $138,000. While not a new position, it hasn’t been filled in years. The last time the position was filled was in 2006, when it was part of the curriculum office, and paid $122,101.
With Thornton bringing in his own people, it’s still not known what will happen to the current superintendent’s staff, although the new budget assumes they will remain on the payroll, too.
“While he [Thorton] is in the process of getting to know people, their responsibilities and skill sets, he is assembling his core team,” St. Aubin said. “What other changes could be coming, we really don’t know.”
With the additional personnel Thornton is bringing to Milwaukee, the superintendent’s office is slated to cost taxpayers almost $1.5 million next year on salary and benefits, compared to $642,000 this year.
MacIver News Service – [Milwaukee, Wisc...] Between salary and benefits, 17 painters working for Milwaukee Public Schools pull in around $98,000 a year, on average.
That staggering figure came to light as MPS is facing some significant budget decisions. The district is looking to cut $33 million from the annual budget and could layoff more than 680 employees. The district administration had proposed eliminating 15 of the 17 skilled-trade painting positions, but the school board rejected the measure during a budget committee meeting last week.
The MPS Board has said it wants to institute cuts in a way that minimizes the impact on classroom instruction. However when presented with an opportunity to trim non-classroom labor costs, they rejected the plan; instead choosing to impose furloughs on all ‘non critical’ personnel.
The move saved the painters’ nearly $100,000 per-year jobs. The MPS Board deliberations are continuing, with a final vote on the annual budget in two weeks. MacIver’s Bill Osmulski reports…
MacIver News Service – Government records indicate thousands of teachers in Wisconsin were hired or retained because of the Stimulus last year, but many of them could be let go now that the one-time money is gone.
According to recipient reported data found on the federal government’s stimulus website, www.recovery.gov, Wisconsin districts received a billion dollars in awards from the US Department of Education. The government claims those awards created or retained 6,556.44 full-time positions.
The MacIver Institute conducted an informal survey of school districts asking how they are responding to decreasing state aid. Of the one hundred districts that responded, more than half said they were considering layoffs. Some admitted teachers hired for stimulus programs will be let go.
In Mondovi, Cherie Gullicksrud, superintendent, said, “Our district is using the ARRA funding for activities and positions we knew up front would not be continued once the funding is no longer available.”
Jim Erickson, Webster School District Superintendent, said, “If we don’t have any retirements, the positions we saved with ARRA will be laid off.”
Some districts are attempting to keep some stimulus jobs, while laying off others.
The Oconto Unified School District superintendent, Sara Croney, said “For the 2 Title I math teachers at a .63F
TE that we hired using ARRA funds we will eliminate those positions when the ARRA funds are gone. The .5 FTE Early Childhood teacher that we are currently funding out of ARRA special ed.; we will still need the position is the student enrollment is there for that program. Currently we have a reprieve because ARRA funds that .5 FTE for 2009-10 and will fund it for 2010-11.”
Dean Isaacson, district administrator in Platteville, said “We’ve made every effort to spend ARRA dollars in a manner that won’t require continuation funding, however we may have one or two teaching positions that will need to be added to our local personnel budget when the ARRA funds are gone. During the last few years we have experienced enrollment increases and hope those increases will cover the added position(s).”
Other districts, like Elkhart Lake-Glenbeulah School District, tried not to spend stimulus money on new employees, recognizing that as a continued expense.
Ann Buechel Haack, district administrator, said, “In our district we used the ARRA stimulus money we received in our district for one-time expenses so there would not be a funding cliff for those items the next year.”
The Wisconsin Department of Public Instruction said it does not keep track of districts’ decisions whether to keep or layoff stimulus funded employees. MacIver News will continue to follow this story as school districts across Wisconsin set their annual budgets this spring.
MacIver News Service – It’s almost never a popular idea, but more and more school districts around Wisconsin are beginning to see consolidation as one of their only options as revenues decline and expenses increase.
The MacIver Institute conducted an informal survey of school districts around the state. Of the one hundred that responded to our inquiries, more than a dozen have at least considered the idea of consolidation.
Consolidating school districts is often an emotional issue in communities. Many people, especially in rural areas, feel their school district is their local identity.
Over the past summer, Park Falls and Glidden combined to form the Chequamegon School District. Mark Luoma, the district administrator, said it was a nerve-racking process. 
Both districts were faced with declining student enrollment, which meant less aid from the state. Also, more people were starting to buy vacation homes in the district, which made property values go up. That resulted in state aid declining even further, despite the fact the higher property values did not translate into more revenue for the district.
“As we looked at this trend; as our fund balance continued to decline, we knew we had to try something different if we were going to maintain quality programs for our students,”said Luoma, who was at that time the district administrator in Park Falls.
Glidden had already been sharing programs, including music and sports teams, with neighboring districts. Just cooperating with other districts had initially been unpopular.
“The immediate reaction in the community, mostly from the adults, was my kids aren’t going to play with those kids. The old rivalries were alive and well,” said Luoma.
However, after the combined Glidden and Butternut baseball team went to the sectional finals in 2006, attitudes began to change.
“They realized these are our neighbors and maybe we can work together,” Luoma said.
Butternut wasn’t interested in consolidating with Park Falls, but Glidden was open to it. Since the community had already come to terms with sharing their sports teams, Luoma said it was easier to convince people consolidation was their best option. A referendum passed in both districts, and they officially consolidated on July 1, 2009.
Luoma said so far the consolidation has been working well, but it will take two years before the district can effectively assess the situation.
Other districts the MacIver Institute spoke with said consolidation is a short term solution at best. They argue when you combine two struggling districts with declining enrollment and revenue, you end up with one struggling district with declining enrollment and revenue.
Jerry Walter, district administer in Durand, said “Unless the consolidated districts produce a slow, steady increase in enrollment, all you get from consolidation is a very short term fix, then you’re in the same structural deficit, continuing to reduce offerings, and get to ride on the bus much longer to access the reduced programs.
Dr. Mark Smits, district administrator for Hartford, said “This option has a potential for increasing taxes; not a good option in these hard economic times.”
Back in Chequamegon, Luoma admits consolidation, in itself, is not the final solution for funding problems.
“Consolidation isn’t necessarily about saving money. It’s about maintaining and enhancing programs,” he said.
Luoma said “What it does is it gives you time.” That’s because after consolidating, the state freezes its level of aid to the two former districts for the next five years. That means it will not decline any further.
Although consolidation might be too much for many districts for the time being, districts around the state are beginning to cooperate much more with their neighbors.
Jim Harlan, district administrator for Weyauwega-Fremont, said, “While not currently looking at consolidation, it seems quire clear that one outcome of the funding crisis will be an increased focus on regionalism and the efficiencies that might occur. Another reasonable outcome would be an increased use of technology and blended learning approaches.”
Steve Sedlmayr, district administrator in Alma, said, “We have been sharing teaching staff in areas such as vocal music, speech and language, family and consumer education, chemistry and physics with neighboring schools.”
Luoma said for Park Falls and Glidden cooperating with other districts naturally led to consolidation. He expects to see that process repeated with other districts around Wisconsin. There are already indications of that happening in districts like Neillsville.
John Gaier, district administrator in Neillsville, said, “A number of districts in our area are struggling financially. We already share programs with some of them. As money gets tighter, we are preparing discussions to cover potential consolidation. However, consolidation is a very delicate subject and no district seems to want to commit themselves yet.”
Some districts that spoke to the MacIver Institute not only are opposed to the idea of consolidation, they believe fundamental changes must take place in Madison before districts will see any real solutions to their financial problems.
Tom Andres, district administrator at New Lisbon, said, “How would consolidation help? Eventually the costs would continue to increase and make it difficult for the consolidated school to make ends meet. The answer is to create a different manner of funding. The legislature needs to take away some of the unfunded mandates and give local school boards more flexibility. Start date, number of days of instruction, requirements, and the overwhelming number of state reports need to be addressed. People in offices (political and DPI) need to spend a week in a school to find out the reality of what is being done instead of creating new ways to put more on the backs of local districts.”
Currently the State Assembly is considering two bills supporters say will help districts consolidate if they choose to. The districts Montello and Westfield are in the process of consolidating and recently spoke at a hearing in support of those bills.
By Bill Osmulski
MacIver News Service
The Badger State earned a failing grade when it came to the science standards that students are supposed to held to, posting a 0/10 score and a “F” grade. This was the lowest recorded score in the entire study.
