BASD officials say insurance decision was based on long-term goals
By Jennifer Eisenbart
Staff writer
In the aftermath of last fall’s first annual meeting for the Burlington Area School District – with accusations against the school district of raising taxes without good reason – one simple question was raised.
Did the school district use all of the tools in Gov. Scott Walker’s Act 10 to keep the budget as low as possible – and were those tools enough to allow the district to overcome an unprecedented cut in state school aid?
Peter Smet, the district’s Business Administrator who was approved Monday night to be the next superintendent, said that the tools given by Act 10 are enough – depending on how you look at it.
“That’s an accurate statement,” Smet said. “But is that the right thing for the Burlington Area School District?”
Smet is walking a tightrope now, as is the district. With the state heading into the second year of a biennial budget, districts are struggling with another year of declining aid despite exhausting most of their Act 10 savings in the current year.
As BASD Superintendent David Moyer – who will leave for Moline-Coal Valley (Ill.) to become its superintendent July 1 – explains, the tools Walker gave essentially helped for just the first year of the deal.
“The way I look at it is, they constructed a two-year budget,” Moyer explained. “What’s available to school districts was exhausted in the first year of the budget.”
The tools offered by Act 10 essentially covered three major points:
One, collective bargaining for anything other than wages was eliminated for but a select few public sector union members;
Two, public employees could be required to pay their own contribution to the Wisconsin Retirement System; and
Three, public employees could be required to pay a portion of their health insurance premiums – a minimum of 12.6 percent for employees in districts using the state insurance plan – though Smet says that is an average figure with individual districts requiring more or less depending on their respective plans.
However, even that last point has proven sticky. Burlington Area School District chose instead to go with a different insurance company, thus saving more than $1 million in costs. Since school district employees would be paying premiums and co-pays as well, the district chose not to ask employees to pay part of their premiums this year.
However, with the district having already maximized its savings with the WRS contribution requirement and the cheaper insurance, the question now is: what goes next?
Smet says it is a delicate balancing act.
“The challenge is finding the balance,” said Smet, who pointed out that there are basically two ways to recover lost state aid: either increase taxes as allowed through the revenue limit authority, or decrease costs.
“How much do you cut from your operation with what is palatable on the tax increase?” Smet asked. “That’s our dilemma and challenge.”
Options do exist. The district could cut benefits, or modify the existing benefits –including requiring staff premium payments. It could also pay less and increase class size by cutting teachers.
However, there comes a point where there is diminishing returns. That is the balance Smet is trying to find, one that allows the district to “recruit and retain employees.”
“You’re dealing with your human resource,” Smet explained. “It’s a reality of what we have.”
Moyer was a touch more blunt.
“I could give the board any budget they want,” he said. “You could eliminate all benefits, you could do just about anything you wanted to get to a pre-determined budget,” he said. “But we’re also trying to be a good custodian of the public taxpayer dollar while maintaining a quality district.
“We feel the pressure to maintain a high quality public school district in an era where more is being expected of public school districts.”
And as Smet stressed, that public perception is truly in the eye of the beholder.
“There’s limited sentiment anywhere in the country for tax increases,” he said. But in terms of holding the tax levy steady, increasing or decreasing it? Well, that depends on who you ask.
“Some people would say that’s obvious,” he said. “Some people would disagree,” Others would say that you didn’t tax enough, that you shouldn’t have any cuts.”
The bottom line: The district left potential additional savings on the table this year when it did not ask staff members to pay up to 12.6 percent of their insurance premiums. Instead, officials chose a different route and ended up saving more than $1 million in insurance costs. Now, as it faces an additional shortfall in state funding of $2.1 to $2.5 million, BASD retains the option of requiring staff premium payments and may be in better position to handle the shortfall than other districts that have already exhausted all the tools in Act 10.
However, whether that was effective planning that achieves the “balance” officials are looking for is largely in the eye of the beholder.
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What would be good to know is what really would the savings be if teachers contributed to their insurance premiums?
If the BASD board would rather lay teachers off than make all pay 12.6% towards their health care premium I think most people would have a problem with that.
“public employees could be required to pay a portion of their health insurance premiums – up to 12.6 percent”
Wrong: It can be any percentage. 12.6 is the mandated minimum contribution for those on the state health plan. BASD never has been in that plan. Over a year and you still cannot get the facts right.
Almost all other districts make their teachers contribute now (with contracts after the budget deal). Most other districts cut taxes and/or increased services with savings. BASD administrators cut a side deal with the union in exchange for their big salary increases. The taxpayers, the children (future debt), and teachers (more layoffs) got the short end of the stick.
Unfortunately, the Board was/is asleep and fell for it. Time to wake them up and replace a couple so our kids and teachers don’t have to pay the price for the union and administrator greed.
You are correct in regards to the 12.6 percent minimum contribution for employees in districts using the state-offered insurance plan. The story has been updated to accurately reflect that.
-Editor
Edward,
Thanks for letting the newspaper know they were wrong on the stuff about the premium contribution. But from there, you drove the bus off the cliff.
The total cost of administrative salaries actually declined in the current budget (due to the elimination of one position) and the reason for the raises for the remaining administrators was 1) to account for the added duties some picked up due to the cutting of the administrator position; and 2) to bring others closer in line to what their peers are making at surrounding districts.
The teacher layoffs were made in line with declining enrollment — not program cuts. And the vast majority of those layoffs were covered by attrition due to disgruntled veteran teachers voting with their feet and deciding to retire rather than continue in an era a divisive politics. The district actually had to hire new teachers to fill some spots for this current school year.
Conspiracy theories may stoke the political fires, but reality better serves students, teachers and taxpayers.
1. Superintendent 2010 125k Today 140k private income 2009-2011 down 10%
2. In spring 2011 the union wanted to adjust the healthcare in exchange for extending the contract and still paying no premiums. That’s what they got (even though the contract wasn’t extended) and to this day union officials weigh in on issues of benefits and school policies they are by law not allowed to do, before those issues even get to the Board. Go down to the office and request communications between the union leaders and the administration in the last year.
3. The reality is the money spent for the union helped put the district in a hole, drained the reserve fund and help put services in jeopardy. All to the detriment of kids and teachers.
These are facts not theories. The only conspiracy is the one of silence how how the union and administration look out for themselves. That is the reality and we should change it like the rest of Wisconsin has.
What I find infuriating is that when the district is up against cuts, they will shop around to find a more affordable health insurance. They will shop around when it will hurt them not to? They will save us, the tax payers, a MILLION dollars when they are forced to. Makes me wonder where else there is wasteful spending! I personally see no reason to have a cart(20+) of iPads at the intermediate school, plus whatever is at the other schools. My household doesn’t have an iPad. It’s not in our budget, plain and simple. The elementary schools don’t have enough books so that each child can have a science or social studies book, but there are “smart” boards in each room? Where are the priorities? Everyone has had to learn to do with less, make changes, and sacrifices. Why is BASD any exception? Staffing and programs aren’t the place to make cuts! Look at some of the horrible spending choices being made. If this is really about the kids, put your money where your mouth, and PROVE IT!!!