Sunday, January 16, 2011

What is the ACTUAL Recommended Budget Increase before credits? 6.7%

Someone asked me if the $3.07, 5.09% increase includes the $540,000 Teacher Stimulus money. Yes, it does account for it but there are few other items that are accounted for in this budget request:

Budget Increase:    $3,070,424
                               +     540,000    (Federal Teacher Stimulus)
                               +     225,000    (Allocation from Medical Trust Fund Balance)
                               +     232,009*    (Underfunding claims @105% vs 110%)
                               -----------------
                                 $4,067,433    Actual budget increase

In essence, this budget recommendation is actually a $4M increase. I think the fact that our budget is being helped by grants/stimulus sometimes goes unnoticed.

That being said, since the Federal Teacher Stimulus is a one-time deal, it will be gone at the end of the 2011-2012 school year. Which means, that unless something is done to supplant this grant, the 2012-2012 Budget recommendation will most likely start off with at least a $540K increase. But that's neither here or there at the moment. The point here is that an additional $1M increase in the operating budget is getting lost in the translation in the current budget proposal because it's being "accounted" for by a grant, medical trust fund and underfunding.

* I have to verify this number, I am basing it on Page 7 of the Medical Benefits section in the budget workbook. This could be an additional $232K but I will confirm the actual number by Tuesday.

41 comments:

Anonymous said...

Under which accounting principles do you count federal stimulus money as a budget increase? That money is provided to prevent teacher layoffs, so it is credited to offset some of the increase in contracted salaries. In my book that is the opposite of an expense. The idea that it will not be available next year is not relevant to this year.

Anonymous said...

Most likely after next year the contracted employees will receive a smaller or no salary increase compared to 2011-12. Under your system, should that count as a credit? Of course not, you are being ridiculous. This budget is this budget, you can't say retrofit expenses from the following year.

Anonymous said...

I think Tony is pointing out something very relevant here. The teacher salary account is going up an additional $540K in this budget proposal. That's an additional $540K in operating expenses. Pay checks will be cut from this account. He has a legitimate point.

Anonymous said...

"Most likely after next year the contracted employees will receive a smaller or no salary increase compared to 2011-12."

LMAO...yeah right. Remember, this is a teacher's union that believes Cheshire can absolutely afford it and they want their share of wealth redistribution. These greedy people did not help Cheshire one bit when we needed their help so what makes you think they will take zero or little increase after the current contract expires? Actions speak louder than words and clearly, their actions speak volumes. So much for helping the kids, they seem to be only interested in helping themselves.

Anonymous said...

"what makes you think they will take zero or little increase after the current contract expires?"
Because that what happened in other towns. The economy drove the contract negotiations. Apparently, you are not paying attention. If you want to see real greed look at the money going to the health insurance companies. Oh, I guess you weren't paying attention to that either.

Anonymous said...

Figures straight from the budget. In the past ten years teacher salaries rose a total of 25.6%, that's 2.56% a year. In the same ten years medical benefits costs went up 83%, or 8.3% a year.

Anonymous said...

"Oh, I guess you weren't paying attention to that either."

Hmm...if you were paying attention the medical insurance section, then you'd see that Cheshire teachers pay only $771,486 towards the $6,249,000 in medical costs leaving Cheshire taxpayers holding the rest of the bill.

Why are the teacher's immune to insurance premium increases when the rest of society is not?

Pouring more salt on the wound...14% pay hike over 3 years during the worst economic time in history...and not helping with concessions forcing Cheshire taxpayers to dig deeper into our pockets.

The precedent, albeit a very wrong one, has been set and enforced it seems.

Anonymous said...

Why are the teacher's immune to insurance premium increases when the rest of society is not? Apparently their insurance premiums have been raised drastically as well, so they are not immune. The inflation rate from 2000-2010 was 2.49% per year. So their pay barely kept up with inflation. Take out their insurance costs and their take home pay went down. They are hardly getting rich on the tax payers bill. The insurance companies on the other hand...

Anonymous said...

I don't know what figures you're looking at but teachers pay 40% of their medical benefits costs regardless of the plan.

Anonymous said...

" don't know what figures you're looking at but teachers pay 40% of their medical benefits costs regardless of the plan."

40% is not even close. Information is here: http://4.bp.blogspot.com/_eCeFB8oEbYQ/TSeAd_DD2rI/AAAAAAAAABI/ZjEAnDuVJ2A/s1600/Acct2001-3.JPG

...and here: http://3.bp.blogspot.com/_eCeFB8oEbYQ/TSeDAKvxneI/AAAAAAAAABY/IebFjtF3NAk/s1600/Acct2001-7.JPG

If teacher's were paying 40% of the costs....problem solved.

Anonymous said...

I don't know what figures you're looking at but teachers pay 40% of their medical benefits costs regardless of the plan.
That was instructional assistants, who are part time.
Teachers pay 18%, custodians 10%, secretaries 5%, and administrators 17%.
I don't know what you have against the teachers. They provide a valuable service to the town just like police and firefighters. What do you do for the town besides piss and moan about your taxes? I don't mind if my tax money goes to these people. They work hard for it.

Anonymous said...

"I don't know what figures you're looking at but teachers pay 40% of their medical benefits costs regardless of the plan."

1:49pm is right, you are wrong/misinformed...the superintendent's budget CLEARLY spells out medical costs vs. contributions in here: http://tonyperuginilistens.blogspot.com/2011/01/superintendent-budget-recommendation_07.html

Anonymous said...

"14% pay hike over 3 years during the worst economic time in history"
Ever heard of the great depression? The amount paid by the BOE for teacher salaries only rose 4.7% during the three year contract not 14% and that's only if there are no retirements or layoffs the last year of the contract. The rate of inflation has been 5.1% the past 3 years, so the costs rose less than inflation.

Anonymous said...

As you can see here, money spent on teacher salaries has NOT increased by 14%.

2008-2009 $27,628,012
2009-2010 $27,546,647 -0.29%
2010-2011 $27,646,762 +0.36%

In fact, there has been no additional money put into teacher salaries in 3 years. These numbers are from the superintendents report.

Anonymous said...

"As you can see here, money spent on teacher salaries has NOT increased by 14%."

You missed Florio's discussion on this...the account summary looks minor because of teacher layoffs and the fact that the account includes credits from federal stimulus and grants...such as the $540K teacher stimulus that's already represented in the account. He also explained that when looking at the detailed step and pay increases by those positions still being paid for...it comes out to 14%. It seems that layoffs have done really nothing more than increase class sizes.

Anonymous said...

"You missed Florio's discussion on this"
Clearly you are misrepresenting and distorting what you heard. No matter how you calculate it salary costs did not increase anywhere close to 14%. "increases by those positions still being paid for"
This is the key phrase here. There are less positions, so less cost. The federal stimilus money is being used appropriately. You can twist it all you want, but it pays for positions that still exist.

Anonymous said...

Federal stimulus money is going to pay teacher salaries NEXT school year. It has not yet been used.

Total increase to the teacher salary account has seen ZERO for the last few years. 14% is only the prediction based on the negotiated settlement 3 years ago and NEVER came to fruition.

Anonymous said...

Even if you take the $540K credit away from BOE budget and assume no retirements or layoffs next fiscal year (both are distorted figures), there STILL would only be a 6.7% increase in salary costs for the entire 3 year contract. Not even half of 14%. You make it sound like the stimulus was hidden somehow. Quite the contrary, it being used for it's intended use. The TC could learn something from that (ie. misuse of SPED reimbursement into "rainy day fund").

Tony Perugini said...

I don't have the budget binder in front of me to pull out the actual cost of contracted increases. I will post that tomorrow. But I believe the Teacher Salary account is going 3.49%, not 4.4%, this year.

Here's a quote from Greg's budget message which may help:

"The largest cost increase is for teacher salaries. While funding for teachers in the current year is at the same budget level that it was in
2008/09, this has only occurred as a result of a reduction of thirty teaching positions over two years. The current contract with the
teachers union calls for a 4.4% increase in the third and final year of the contract. The projected cost of this increase is $1,083,524.
The budget increase is calculated based on projected contract cost plus the loss of IDEA stimulus funds, less the Jobs Act funding
available next year and a reduction of $150,000 based on expected turnover of staff (retirements, leaves and resignations).
It should
be noted that only one resignation/retirement for 2012 is in hand at this time; therefore, that figure may have to be adjusted during the
budget development process. It is also important to note that this administration has been in ongoing discussions with the Teachers
Union regarding a change to the existing contract to help reduce the pressures on the 2011/12 Budget. At this point in time, the union
leadership has considered no change and the budget process will move forward under the assumption that no contract concession or
change will be forthcoming."

Tony Perugini said...

Looking at the teacher's salary account, it would appear that it hasn't changed bolstering the argument that salaries, overall, haven't increased.

However, the reality is that individual salaries have increased 14%. The reason the account summary appears flat is because it's been offset with the loss of 30 positions over the last 2 years AND some salaries are/were being paid for with ARRA money.

You have to remember that the salary account represents what it costs Cheshire after grants have been applied to it.

For example, in the 2011-2012 proposal, the teacher's salary account is actually going up $1,623,524. $540,000 has been applied to it leaving $1,083,524. While it shows a 3.92% increase, it's actually a 5.8% increase.

I believe 4.8% of it is contracted increase and the remainder is for salaries that are beind paid for by the teacher stimulus.

Florio has applied stimulus (ARRA) money to this account over the last two years making it appear lower than it actually is.

I hope this helps explain the phenomenon.

Anonymous said...

The BOE is between a rock and a hard place. They have to deal with increased costs, especially medical benefits, transportation, and utilities without any help from the TC. The TC has the power to help by using some of the rainy day fund, but NO. They have to punish the union for a contract that was negotiated 3 years ago, before the economic situation turned south. There will be a new contract that will no doubt be adjusted for the economic situation, but the TC will only complain again if the union receives even a cost of living increase. In the past ten years the inflation rate has averaged 2.5%. What was the average increase in teacher salary costs for the BOE? 2.6%! The TC will continue to ignore the concerns of families and brag about it (Mr. Schrumm) until they are booted out of office, in 10 more months. Unfortunately, they have one parting shot at the BOE and families.

Anonymous said...

"The reason the account summary appears flat is because it's been offset with the loss of 30 positions over the last 2 years AND some salaries are/were being paid for with ARRA money."
Yes, and that's because the TC has cut the BOE budget the last 2 years. The ARRA money is intended for that purpose, to pay salaries. At least the federal government cares about our schools, in stark contrast to our present TC.

Anonymous said...

Don't you just love it the way people bash the TC over the budget. I guess it's the easiest thing for them to do rather than come up with reasonable solutions.

If you use say a million this year from the rainy day fund to cover salaries and benefits what's your suggestion for the following year? Use another million or more? You have to think beyond one year.

Anonymous said...

"If you use say a million this year from the rainy day fund to cover salaries and benefits what's your suggestion for the following year? Use another million or more? You have to think beyond one year."
OK let's think beyond this year. After that there will be a new contract and more retirements (that will either not be replaced or replaced with lower salaries), so there will be lower costs, EXCEPT for benefits, transportation, and utilities. How do we deal with those rising costs?
Continue to vilify the teachers, who provide a valuable service, or provide funds to the BOE to deal with those costs? We can play the blame game forever: Blame the TC, blame the teachers, who's stuck in the middle? the BOE and families.

Anonymous said...

"If you use say a million this year from the rainy day fund to cover salaries and benefits what's your suggestion for the following year?" Interesting that you picked a million because that was the surplus for the town for the past year. Do we just keep adding to the rainy day fund while our schools suffer? It's one thing to limit tax increases, but to keep adding to the rainy day fund instead of covering BOE costs? That's not what the TC should be doing.

Anonymous said...

Gee where should the money go? The BOE or the rainy day fund? Pay attention voters to what the TC does.

Anonymous said...

"Looking at the teacher's salary account, it would appear that it hasn't changed bolstering the argument that salaries, overall, haven't increased.

However, the reality is that individual salaries have increased 14%. The reason the account summary appears flat is because it's been offset with the loss of 30 positions over the last 2 years AND some salaries are/were being paid for with ARRA money."

So basically the TC has gotten around paying the increase overall salary costs by cutting the number of teachers needed meet the same number. If you look at what the council cuts each year its almost the exact same number. Kind of a tricky end around the contract at the expense of the students.

Anonymous said...

Thinking back to the previous dem TC they're the ones who passed a policy that increased the percentage of $ to be held in the rainy day fund. No one cared back then about how much went into the fund.

Anonymous said...

"Thinking back to the previous dem TC they're the ones who passed a policy that increased the percentage of $ to be held in the rainy day fund. No one cared back then about how much went into the fund." Maybe their plan was to use it when it was needed (like now). Not to just let it keep growing while the BOE twists in the wind. That seems to be the R's plan.

Anonymous said...

"So basically the TC has gotten around paying the increase overall salary costs by cutting the number of teachers needed meet the same number. If you look at what the council cuts each year its almost the exact same number."

FYI - The TC ONLY approves a bottom line number for the BOE. They have NOTHING to do with how it's spent. Florio decides how to spend it. Also, you shouldn't say the council "cuts" the budget - they "reduce the increase."

Perhaps this year the Boe and TC should use the same amount of funds from the "rainy day fund" for the budget as the teachers agree to in concessions. Seems fair to me. Meet half way.

Anonymous said...

"Perhaps this year the Boe and TC should use the same amount of funds from the "rainy day fund" for the budget as the teachers agree to in concessions. Seems fair to me."
The BOE can't use the funds if the TC doesn't approve them. Perhaps the funds could be used to pay for early retirements of the most senior (highest paid) teachers.

Anonymous said...

"Perhaps this year the Boe and TC should use the same amount of funds from the "rainy day fund" for the budget as the teachers agree to in concessions. Seems fair to me."
Ahh, blackmail seems fair to you. How do the families in Cheshire feel about that? Seems like we need a new TC that understands how government employee contracts work.

Anonymous said...

Perhaps the funds could be used to pay for early retirements of the most senior (highest paid) teachers.

January 18, 2011 9:34 PM

I don't think there's many teachers retiring...there's been many retirements over the past few years. Maybe Tony can give us the numbers.
So you're saying we should put together a incentive package for the older teachers? I don't think you'd get enough retirements to make up the amount of money that they'll be short.
We offered an incentive package a couple years ago, and as Florio said, you really don't see any savings from it.
What's wrong with my idea?

Anonymous said...

10:07 It's not blackmail. It's called working together for the best interest of the community.

Anonymous said...

FYI - The TC ONLY approves a bottom line number for the BOE. They have NOTHING to do with how it's spent. Florio decides how to spend it. Also, you shouldn't say the council "cuts" the budget - they "reduce the increase."

Yes but the number of the reduction is always the equivalent of the contracted raises. Sounds like your a town councilor defending your own cheapness.

Anonymous said...

The retirement incentive doesn't seem to save us money. It's just a mechanism to be able to remove tenured teachers (sooner rather than later) nearing retirement that otherwise cannot be eliminated via layoffs since the teacher's contract requires that non-tenured teachers be the first to be let go.

Tony Perugini said...

2:25...the idea behind retirement incentives is to save money from higher-level salaries (longer years of service) for teachers nearing retirement. That's where we'd achieve the greatest savings.

The savings is associated with those salaries no longer hitting the books once those folks retire. Besides an incentive, because we're self-insured we'd pay for unemployment insurance costs including the cost of an incentive.

As it stands now, the retirement pool is very small and savings would be small.

There's been no discussion of incentives or any concessions for that matter since nobody is coming to the table.

Anonymous said...

10:57 No, I'm not a town council member. I'm just your average taxpayer who's been paying attention to this whole budget thing for many years.

Anonymous said...

There seems to be a lack of understanding about government employees. Unlike the private sector they don't get bonuses. When my company has a good year I get a good bonus, when it has a bad year I get less or no bonus. They don't ask me to give back some of my salary. I don't hear the TC or BOE offering bonuses when times are good, but yet they want the employees to give back what they were promised in a contract. Seems like these people asking for "concessions" just resent government employees.

Anonymous said...

"I don't hear the TC or BOE offering bonuses when times are good, but yet they want the employees to give back what they were promised in a contract."


You may not have heard of bonuses, but what they did was just spend, spend, spend. They pretty much got what they wanted. Any supplies, new office furniture, lavish breakfasts, lunches, it was all there..you just didn't see it.

Anonymous said...

"There seems to be a lack of understanding about government employees. Unlike the private sector they don't get bonuses. When my company has a good year I get a good bonus, when it has a bad year I get less or no bonus. They don't ask me to give back some of my salary. I don't hear the TC or BOE offering bonuses when times are good, but yet they want the employees to give back what they were promised in a contract. Seems like these people asking for "concessions" just resent government employees."

I work in the private industry and have the same experience as you when it comes to bonuses.

But unlike you I'm faced with no bonus this year, taking 4 furlough days per month, salary decrease, increased health insurance premiums and no-employer match (as little as it is but every penny counts) in my 401K. Why? Economy, our business is hurting but I'm happy that my colleagues and I worked with the owners to keep our jobs and a decent paycheck while we work through this very rough economic period.

And I'm not alone.

Yes, I'm upset for having to take a pay decrease but the flipside is I have my job and my income and my insurance. I can't complain for far too many people have much worse off than me.

In the end, common sense prevailed in our company. No, we don't have a union or a need for one. I am grateful for that.