Sorry Victor – our mind is right,,, and correct

In the GOP gubernatorial debate last night, Victor Moffit attacked John Robitaille for being opposed to regionalized school districts.

Robitaille said there has been “no documentation that says it will save us any money,” and evidence that the “cost of administration per student” in the merged Chariho Regional School District is higher than it is in Westerly. Beyond that, “I believe that control of the schools should be at the local level.”

But Moffitt said “anyone in their right mind” would recognize that by whittling 36 school districts down to 4, “we are going to save money … and have less bureaucracy. Even John should understand there will be less bureaucracy.”

While we at OSPRI try to stay out of political campaigns, it is likely that the data mentioned in the debate came from our research so we are compelled to speak up.  From our January 2009 report, “Regionalization, be careful what you wish for”

“It’s a very easy pitch to say 36 school districts with 36 superintendents are more expensive than five regionalized districts with five superintendents. Unfortunately, it’s not true,” said OSPRI President William Felkner. “I bought it too, until I saw the data.”

…

When comparing fully regionalized districts to similar size town districts we find that regionalized districts have the highest per pupil costs. One example is the Chariho Regional School District which was put together from three towns to make a school district whose student body is the same size as neighboring Westerly. But, the supposed economies of scale are nowhere on display in Chariho where administration costs per pupil are $825, forty percent more than the $589 spent in Westerly.

Indeed, when it comes to administration costs, the supposed venue for obvious savings, they are well above the median in ALL the regionalized districts.

…

Finding a light at the end of the tunnel, Felkner said, “If every taxpayer knew that the average raise for teachers in their first 10 years of service is 10.5%, I seriously doubt that those double digit raises would continue for very long.”

While education salaries are growing, it could be worse.

Presumably, teachers and their union representatives are well aware of the fact that state government FTE costs went up 35% from 2000-2006 inclusive, while teacher salaries in RI only increased 16.6%. The notion that Rhode Island’s individual districts would see costs savings from sophisticated statewide or regional negotiations is certainly drawn into question by these figures. This doesn’t mean that there is not more work to do on salaries, staffing levels, and results in RI, it simply suggests that regionalization in education is no panacea and likely would lead to higher costs and less taxpayer accountability.

“It is likely that when regionalization occurs, the taxpayers become disconnected from the management of their schools and costs spiral out of control due to a lack of accountability,” said Felkner. “Only when armed with information and access will taxpayers be able to regain control. While we may not always win when negotiating on the municipal level, we NEVER win on the state level.“

As a side note, the 10.5% average total raise for teachers in their first 10 years of employment (the “steps”)  was from contacts obtained in 2008.  We have been reviewing the new contracts and it appears the recession is having an impact. The latest average total raise for those same employees for the contracts we have received is now at 8.5%.

Is an 8.5% raise the kind of sacrifice you expected?

Retroactive Raises the Handiwork of Arbitrators

It bears pointing out that the retroactive raises awarded to Providence firefighters were the outcome of binding abitration. So keep that in mind as the General Assembly once again is set to consider a law that would require binding arbitration for public school contracts, as is now the case with police officers and firefighters. After OSPRI released research showing that this would put as much as $543 million in education spending under the control of an unelected, third party abitrator, the idea died a quick and quiet death in the October legislative session. But now it has re-surfaced. There are a lot of reasons to oppose binding arbitration for teacher contracts and absurdities like retroactive raises is just one more.

UPDATE: In the print edition of The Providence Journal, a city councilor claims the deal arranged by the arbitrator is good for taxpayers because the firefighters also have to make retroactive payments to the health insurance. Apparently this is the first time they have had to pay for their health insurance. Well, they should have already been doing this. So, if this is a ‘victory,’ then it just goes how far we have to go to restore some common sense to the public employee contracts.

Providence Firefighters Get Retroactive Raises

As if the idea of giving raises during a time of recession, when so many are already unemployed, wasn’t already offensive enough, Providence firefighters are getting ‘retroactive raises.’ Today, The Providence Journal is reporting on its blog that the Providence firefighters unions have been awarded retroactive pay raises: 2.5 percent for 2005 to 2006 and 3.5 percent for 2006 to 2007. Buy hey, at least Mayor David Cicilline stood up to the union and denied their request for an increase in personal leave. I don’t know about you, but I’ve never gotten a ‘retroactive raise’ let alone even heard of one. A quick Google search indicates that this practice is exclusive to public sector workers, so I guess that’s one more thing we can add to the union grab bag of goodies, along with sick bonuses, raises on raises, and cash awards to teachers who don’t take free health insurance.

Sunday Journal Makes Case for Libertarianism

Was last Sunday the libertarian edition of The Providence Journal editorial page? In addition to the aforementioned article by OSPRI President Bill Felkner, on the dangers of government-run education reform, there was an editorial criticizing Democrats for introducing binding abitration legislation and another guest column lamenting the fact that Republicans in the General Assembly forced Cranston to change from a town to a city form of government, reducing the role of the people in deciding local affairs. Just as with taxes, no one likes government intervention when it directly affects them.

BREAKING NEWS: Court Rules in Favor of EP School Committee

We have just been informed that Superior Court has ruled in favor of the East Providence School Committee, saying that it had the authority to implement a pay cut and other changes to employee benefits for teachers in the absence of a contract. After the contract had expired Oct. 31, 2008, the school committee implemented a 5 percent pay cut, a 20 percent co-pay on health insurance, and eliminated cash bonuses, or buy-backs, for teachers who chose not to receive their health insurance from the school district. The Rhode Island chapter of the NEA initially appealed the issue to the state labor relations board. But after OSPRI produced research showing that the board ruled in favor of labor in 15 out of 19 major decisions in the previous three years, the NEA took the issue to the courts. Today’s decision is a major victory—not only for management rights, but also for taxpayers. We hope this helps to restore some balance to the enormously lopsided process of labor negotiations in this state.

NOTE: More information will be posted later as it becomes available.

UPDATE I: A copy of the decision has been posted on our homepage.

UPDATE II: The Providence Journal has come out with a story, available here.

More Fallout on Sick Bonuses

A Warwick state rep is proposing legislation that would eliminate bonuses for unused sick time. The move comes on the heels of a Hummel Report investigation that revealed 75 departmental managers in Warwick received a total of $60,000 in sick bonuses, on top of annual salaries that are around $100,000 or more. Here is more from the Warwick Beacon:

“It’s not sustainable. The contracts that are out there with provisions like these are just killing the taxpayer,” said [state Rep. Joseph] Trillo.

“This is an abuse of the process. It’s been going on for years. The unions are used to getting these perks, but it’s one of many that they need to let go of, especially in this economic climate.”

The Beacon recently reported that in March of 2009, using complicated formulas that pay firefighters for not taking sick days off on both a yearly basis and at their retirement, city taxpayers paid firefighters about $531,000.

In December of last year, the city paid municipal employees, which don’t work for the fire or police department, about $163,000 for not taking sick time.

For previous OSPRI posts on this issue, click here and here.

Councilman calls out Mayor for calling out Governor

From Warwick former city councilman Robert Cushman:

The Taxpayers’ Spin:  Santa Clause arrives early in Warwick.

 

It is truly unfortunate that municipal leaders have resorted to the harsh criticism directed toward the Governor’s supplemental budget cutting aid to cities and towns without first examining outdated costly obligations that could save millions if eliminated. 

 

It’s not like they were not aware of the financial problems facing the state and they were not warned of the ramifications if nothing was done to reduce local spending.

 

Bravo to those at the state and local level committed to not raising taxes – hopefully taxpayers will put a bull’s eye on those calling any for broad base tax increase.

 

The fact is municipal leaders knew the consequence of inaction and yet failed to propose significant viable solutions to control costs or challenge the General Assembly to eliminate costly state mandates that would give them the flexibility to enact policies to become more efficient.

 

Take the City of Warwick for example.  It appears Santa Clause arrived early with Mayor Scott Avedisian’s administration paying out approximately $163,000 in sick pay bonus to top administrative officials and municipal employees on December 1. 

 

What is a sick pay bonus?  Employees, who do not use any sick leave in a year, are entitled to three day’s payment in cash on December 1.  Over a twelve month period an employee who maintains a full ninety days of accruable sick leave and has not used more than two days of sick leave for that month, shall be entitled to a payment of fifty percent  of one and one-fourth of his or her daily rate of pay for that month.

 

Who gets benefits like this in private industry?

 

At a time when the unemployment rate is the second highest in the country, thousands of Rhode Island’s would do just about anything to get a job, never mind asking their boss to pay them for being honest and not taking unneeded sick days.

 

The administration will claim that they are under contract to provide these payments.  Yet, why didn’t the Mayor use the leverage he had in February when he renegotiated all municipal contracts, to eliminate these over-the-top benefits? 

 

In fact, the mayor has over spent his sick pay bonus budget by $60,000 by including bonus pay to top city directors not mandated by contract. 

 

On Tuesday the Warwick Beacon reported that city personnel Director Oscar Shelton stated that, “management employees (himself included) had been promised the bonus, and to take it away could have been construed as unfair.  ‘It was promised. What do you do?’ said Shelton, speaking on behalf of Mayor Scott Avedisian”.

 

The report goes on to state, “The city, however, stands to lose approximately $7 million in state aid under Governor Donald Carcieri’s corrective action plan to balance the current year’s state budget, and municipal leaders, Avedisian chief among them, has said the cities and towns would be hard pressed to cut those costs.  ‘We keep our promises,’ said Shelton. ‘And I guess the state does not.’”

 

What about a promise to taxpayers by municipal leaders that they will spend wisely and put an end to the annual maximum property tax increases?

 

Two years ago the city council and school committee passed resolutions requesting that the mayor hire outside consultants to assist in consolidation city and school information technology departments.  The mayor refused to do the study claiming the council did not budget any money to fund the study.  The council, in fact, suggested unused monies in the budget that could be tapped to fund the study.

 

Why is it that the Mayor can find $60,000 in unfunded money to pay sick pay bonus to his top brass and yet he cannot find the money to help consolidate duplicate resources in the city, saving potentially millions of tax dollars?

 

What makes this expenditure so egregious is that the Mayor has been one of the most vocal critics denouncing the cuts, preaching that he and other leaders have done all they can to cut spending and consolidate departments.

 

In the last two years, over a million dollars in Warwick tax dollars have been spent on sick pay bonuses and buyouts. That, on top of the $2 million spent for the $600 annual cap on employee-family prescription drugs, and the millions that would be saved with healthcare co-pays more in line with the private sector for all employees, would provide Warwick with more then enough to survive the proposed cuts without reducing municipal jobs, reducing services or increasing property taxes.

 

I suspect if you dig deep enough, sick pay bonus programs or the equivalent can be found in city and towns throughout the state.

 

Robert Cushman is a former Warwick City Councilman and former Chairman of the Warwick School Committee. Contact him at CushmanR@cox.net

Teachers Contract Eliminates Double Raises

The new Chariho teachers contract almost eliminates the traditional system of steps, which effectively amounted to a double raise. A contract might have, say, 12 steps, which are euphemisms for pay raises. Under this system, a teacher would graduate up to a new step with each new year of employment. Thus, the steps were a system of automatic pay raises. So when a school district speaks of “raises” that actually refers to a raise in the step, not teacher salaries themselves. In other words, a “raise” is really a raise on a raise.

Don’t you just love how government works?

When the two are combined, OSPRI President Bill Felkner found that teachers were actually receiving whopping 10.5 percent annual raises.

Click here for The Providence Journal report on this new contract and here for the Anchor Rising explanation of how the contract affects steps. Anchor Rising also has a nice tutorial on contracts here.

Binding Arbitration: Less Democracy, More Spending

To the average Joe, “binding arbitration” may sound like wonk-speak for something that won’t have an impact in the real world.

But it will. Big time.

At stake is who gets to decide how $1.86 billion public funds are spent – and whether that figure stays at $1.86 billion or gets even bigger.

The basic idea behind “binding arbitration” is this: if contract negotiations between school boards and teachers break down, an arbitrator will be brought in to settle the dispute. The key word here is “binding.” Since most municipal spending is on employee salaries and benefits, this would effectively cut elected officials out of the process and put major budget decisions in the hands of unelected, third-party arbitrators.

So we here at the Ocean State Policy Research Institute wondered how much money is involved. We did some digging around and found that an average of 58.5 percent of municipal budgets goes toward the salaries and benefits for teachers, firemen, and police officers. Multiply that by the total of municipal budgets and you get $1.86 billion.

This issue was supposed to come up for a vote during the special two-day legislative session that started today, but now it has been supposedly tabled. Apparently, some leftist ideas are even too much for our Democratic Legislature.

State Legislature: Too Little, Too Late?

The return of the state Legislature the end of this month is not something to look forward to, according to this local columnist:

What do you expect them to do when they do return? Fix the financial crisis and solve the unemployment problem?  That answer is ludicrous enough to get a laugh out of people and usually gets them to acknowledge that the General Assembly returning to the Statehouse may not be the solution to our current situation. A better question/answer might be: with all they have done to bring us to this point, aren’t you afraid that if and when the legislature reconvenes, they are only going to screw things up even more? We can poke good-natured fun at our elected lawmakers, but you really shouldn’t expect any great shakes when the legislative engine fires back up on Oct. 28 and 29.

The author predicts action on the prostitution and texting-while-driving bans, but little else. Meanwhile, Arlene Violet worries about what the legislators will do with binding arbitration.