Dear Readers,
I am responding to the article about teacher compensation.
I must say, I am shocked that some very smart people don’t understand the basic principal of compounding. When countering my three year cost claims in this article, the school department said the first year cost of the contract was $447,000; the second year $757,000; and the third year $776,000. They calculate the three year total at $1.981 million. That’s not the way the math works, the fist year employees get the $447K; the 2nd year they get $757K on top of $447K; and, the 3rd year they get $776K on top of $757K and $447K. Rough total for three years using this method is $3.631 million.
These number are also a bit different that they told the newspapers on June 3rd when they announced the first year cost was $551,000 for 1.5%. If $551,000 is 1.5%, 2.5% equals about $918,000. When I did my calculations earlier this week, those are the numbers I used to come up with $4.3 million.
The severance projections in the contract have not been released, so I can’t give you exact numbers. However, I can confidently say that with compounding, it doesn’t take anywhere near 14 years to break even. When I did rough calculation for a 20 year stream based on what currently shows up in the City Audit Reports uncompensated accounts, I calculated that this pay raise would be worth more than double the value of the severance, and more than double the $19 million value of the severances floated by some (the School Department was unable to confirm this $19 million number).
Regarding Professional Development… this is a wash. The old contract called for the city to pay 1% of salaries for Professional Development. This Professional Development is supposed to be common best practice to give teachers new training and skills every year. This is a benefit, and it was supposedly highly valued (when it was reduced in a previous contract, the teachers union was not happy at all). Now they have agreed to cut the training in half, and instead of getting that training, they are getting a pay raise. How’s that saving any money? And if that training was so valuable for so many years, why is it not needed all of a sudden? How are our teachers supposed to stay on top of new technologies and teaching methods? What happens if Common Core is eliminated and some new methodology or philosophy has to be implemented?
We need clear answers to these questions, and firm numbers for their projections. I’ve asked the School Department to do the math before agreeing to these labor contracts and I’ve been rebuffed each and every time.
Matt Wroth had one of the most interesting comments. ““It was a huge unfunded liability,” said Matthew Wroth, vice president of the Westfield Education Association about the severance pay after the meeting. “We came up with a compromise, salary increases for longevity. Retire at a higher rate – then you’d make it up.” He’s right about the unfunded liability. The City has over $300 million in unfunded liabilities, and it is mathematically impossible to pay off these obligations. The unions are starting to accept this reality. The teachers union just jumped in front of every other union, and they took their previously “unfunded” liability and turned it into a “funded” pay increase. Pretty smart. He also clearly acknowledged that “you’d make it up” by retiring at a higher pay rate – which results in higher pension for life. Again, pretty smart. I’m guessing the math will prove this is far more valuable than “break even”.
I’ll be asking for the numbers and their cost analysis again next week. If, or when, I get the information, I’ll write another article. If they prove me wrong, I’d be happy to admit it.
Have a wonderful weekend.
Dave Flaherty
Westfield City Councilor
[email protected]
