Q: How do you know the MPS teachers' contract is about to expire?

by folkbum--UPDATED

A: The alarmist studies are out from the usual suspects screaming about how excessive teachers' benefits are.

So, as expected, the sky is falling:

In a report commissioned by the Metropolitan Milwaukee Association of Commerce, the Wisconsin Taxpayers Alliance, an independent, non-profit organization, forecasts continuing annual cuts in services to students for at least the next several years as expenses grow faster than revenue.

The report uses both optimistic and pessimistic financial assumptions. The difference is whether the equivalent of $40 million or $100 million in current spending will have to be cut in the 2009-'10 school year.

That forecast doesn't account for another major problem looming for MPS: New national accounting rules will require that a larger share of expected future costs for post-retirement benefits to employees be funded in current budgets.

If MPS sells bonds to cover its future obligations to retirees - one way of dealing with the issue - that could add more than $100 million a year to spending and, in effect, increase the gap between revenue and need to more than $200 million by three years from now.

Summing up the report, Todd A. Berry, president of Wisconsin Taxpayers Alliance, writes, "Needless to say, MPS has difficult years in its immediate future."

Tim Sheehy, president of the MMAC, put it more strongly: "The magnitude of the fiscal challenge facing MPS is stark. . . . Without real change, the district's viability is at risk."

Bankruptcy! Insolvency! Fire and brimstone coming down from the skies! Rivers and seas boiling! Forty years of darkness! Earthquakes! Volcanoes! The dead rising from the grave! Human sacrifice! Dogs and cats living together! Mass hysteria!!!!

Look, there is little doubt that the Milwaukee Public Schools faces challenging fiscal times ahead. Us and about 400 other districts in the state. (Even conservative West Bend faces a $119 million hole it wants to plug.)

There is also little doubt that a group like Sheehy's MMAC would try to place the blame on us teachers--even though the data clearly show that we teachers are poorer than our colleagues around the state:

Using figures generally from a couple years ago, the report says the average teacher pay in MPS was below the statewide median, but that was largely because MPS teachers overall had less experience.

In the main funds used to pay for educating kids--the largest portions of the MPS budget--75% of spending went to compensation for employees: 49% for salary and 26% for benefits, the report says. That meant that 34% of compensation spending was for benefits--about five points higher than the state average. In 1995, benefits made up 26% of spending on compensation. The rise is largely due to escalating health insurance costs.

The numbers in the sidebar make this point more clearly: The average salary in MPS is $35,439, while benefits total $21,439. That means the average MPS teacher is earning about $57,000 in salary and benefits. (DISCLAIMER: I'M NOT ASKING FOR MORE.) This compares with an average salary and benefits total for the state as a whole of about $63,500. That's a significant difference.

But the paragraphs I just quoted here also draw attention to two factors: Health care costs are out of control, and if somebody would finally get around to doing something--like we should have done 15 years ago instead of instituting revenue caps and the QEO--compensation cost growth could slow.

The second is the artificially high ratio of salary to benefits. This was an issue also stoked by the JS a few years back preceeding the last heavy round of bargaining. Here's the first article in a series from November 2003, by Bruce Murphy. Note this paragraph, my emphasis:

By contrast, Milwaukee's five major taxing authorities spend [for benefits] as follows: Milwaukee Metropolitan Sewerage District: 68 cents per salary dollar. Milwaukee Public Schools: 51 cents, and 55 cents projected in 2004. Milwaukee County: 47 cents, and soaring to a projected 65 cents in 2004. Milwaukee Area Technical College: 35 cents. City of Milwaukee: 32 cents.

The current MMAC/WISTAX study actually was of 2004, and puts the benefits spending at 34%. I don't know how or whether the benefit calculations were different between Murphy's analysis and MMAC/WISTAX's. But the 55% projection seems alarmingly high in comparison to the retrospective 34% reality. (I'm thinking about emailing Murphy, now at Milwaukee Magazine, and asking what he makes of the difference.) In either story, though, the important thing to note is that because Milwaukee's teachers are paid less than other teachers around the state--and because teachers around the state generally have voluntarily passed on raises to maintain benefits--the bennies look high in comparison to the artificially low salaries. (UPDATE: Mystery solved--see the comments.)

But after the Murphy series in 2003, at the direction of our superintendent (see his pull quote in the JS story linked just above!), negotiations between teachers and administrators shut down. The superintendent held two "town hall" meetings, inviting teachers and basically telling us that, one, we don't deserve what we get and, two, we were going to thank him when the district was done screwing us. Two years later, the district won an arbitration that, as it turned out, may well have been more expensive than the union's competing proposal.

I expect that this study, and free JS coverage it was sure to earn, is the opening salvo from the anti-public school forces in the run-up to the end of this month when our current contract expires. But I think the study may well contain two poison pills, neither of which got the kind of play that they should have in the newspaper. First, this MMAC/WISTAX analysis has these paragraphs in the full study (.pdf):

Just over half (55%) of MPS’s 2003-04 “educational” spending was on instruction (see pie chart above). The next largest category was business administration (15% of the total). Included in the business administration category is student transportation. District and school administration was next, accounting for 9% of spending. Pupil and staff services each were about 7% of the total.

Recent trends show per student instructional spending lagging increases in other areas. Spending on instruction rose 4.4% per year from 2000 through 2004. Of the major spending categories, only business administration rose slower. Staff services rose fastest, climbing 5.8% annually. Administration, pupil services and central services all rose more than 5% per year.

WISTAX's report for schools in Wisconsin generally in 2004 reported this:

Wisconsin school districts budgeted to spend $9,963 per student in 2003-04, up $300 (3.1%) from the year before. The majority of expenditures were for instructional costs, which climbed 3.5% to $5,827.

Doing the math, that means statewide, the "instructional" spending average was about 58.5%, compared to Milwaukee's 55% (I assume WISTAX would use the same formula in both analyses). So spending on teachers--which is the vast majority of of "instructional" spending--is growing slower than anything else in the budget and pretty significantly below the state average.

Second, the study does squarely finger the part of MPS's budget that doesn't lag behind the rest of the state:

The biggest difference between administration at MPS and at other districts is the number of assistant principals (AP). In 2005, MPS had 541 students per AP. The seven comparable districts averaged 1,177. Thus, relative to its student count, MPS had more than twice as many AP’s.

A second way to look at the number of AP’s is relative to the number of principals. MPS had more AP’s than principals in 2005; the other districts had one AP for every two principals.

The JS story gave this startling fact one. Single. Line. In the sidebar.

In short, teacher salaries and benefits are not what's driving MPS to the brink. Some changes external to MPS, such as who pays for health care and how, could slow that drive. Further, what MPS pays its teachers is below state average, and what MPS puts into "instruction"--most of which is teacher compensation--also lags behind. Again, I'm not suggesting MPS fork over keys to the vault when it sits down with teachers; none of us is in this business to get rich.

The Working Together, Achieving More strategic planning process, while not perfect, has the potential to provide a certain level of unity and focus for the district, and the last thing we need is a wedge, a bitter, protracted negotiation session. (I wonder how Sheehy's MMAC feels about that plan, as it was developed with funds from the competing Greater Milwaukee Committee.) But what will happen when the media and the anti-public school folks start escalating this fight, with the misleading quotes about "Cadillac benefits"? What will happen when the superintendent breaks out the rhetoric he was using four years ago?

I don't want a replay of 2003 and 2004. Those were awful years, and, frankly, I don't think teachers' morale has recovered yet; there's a lot of spite, on both sides, just below the surface. If this negotiation once again becomes about how teachers are breaking the backs of taxpayers, I don't know what will become of this district. It may well implode.

Then again, I suppose that's what MMAC has wanted all along.