Report: Teachers Union Contracts Stymie Potential Savings

Published May 11, 2010

Ohio’s teachers unions are standing in the way of needed reforms, a new report concludes, describing the union contracts as a “black hole of school spending.”

While states grapple with multibillion-dollar budget deficits and school districts cut programs and lay off younger, non-tenured teachers, unions maintain their resistance against renegotiating unnecessary perks in their contracts, according to the report from the Education Action Group Foundation (EAGF).

The report counters claims made by national teachers unions and echoed by their state affiliates that tax increases are the only way to solve state budget crises and avoid cuts in education.

“What would have happened to the Big Three if the UAW had not been willing to make some concessions?” asked Steve Gunn, communications director for the EAGF.

Lavish Sick, Personal Leave

The report, “Ohio Teachers Contracts: The Black Hole of School Spending,” found high labor costs unrelated, in most cases, to educating children are mandated by collective bargaining agreements in 19 school districts in the Buckeye State.
For example, the report found the Oak Hills School District in Cincinnati could have saved $400,000 during the 2008-09 school year if teachers had paid just 10 percent more of their own health-insurance premiums. Instead, the district spent $3.9 million on premiums. Most of the 19 districts where contracts were evaluated by EAGF subsidize 85-95 percent of their employees’ health-care costs, much more than private-sector workers receive.

The report also found if the 18 paid sick and personal days teachers get each year were cut in half the district would have saved $800,000 in “sick and personal days cost” and $400,000 of the $851,118 spent on substitute teachers to cover the absences.
Teachers are not required to use their sick days or personal days, which amount to nearly 10 percent of the 185-day work schedule, but most do. In 2008-09 the district reported 4,187 sick or personal days taken by 300 teachers.

Altogether, a few emergency, temporary cuts could have saved the Oak Hill district approximately $2.5 million during the 2008-09 school year, the report found.

Questioning Union Tactics

Although the EAGF report does not suggest cutting costs by renegotiating teachers’ contracts is a silver bullet, the potential savings found in 19 union agreements in Ohio could “help districts survive the current funding crisis.”

The report notes every school district in the Buckeye State offers “step raises” for teachers through their first decade in the classroom. These guaranteed, automatic annual increases are based solely on longevity and academic degrees, and they drive up education labor costs more than any other category, EAGF reports.

The EAGF study estimates step increases are the main culprit in driving up Cincinnati Public Schools’ payroll by more than $3 million during the 2010-11 school year. Cincinnati teachers with master’s degrees and 27 years’ experience earn up to $77,317 a year.

In Franklin County, the salary of a teacher starting out now with a bachelor’s degree would climb by an average of nearly 9 percent per year for the next decade, according to the Columbus Dispatch

In 2008 most of the nation’s beginning teachers were on track to receive average raises of at least 5.9 percent annually through their 11th year of service, compared with 3.8 percent average raises in the private sector.

Gunn says school boards have tried to approach teachers unions quietly about the possibility of some temporary cuts in planned increases, hoping to avoid confrontations by not bringing it up publicly. “But they won’t budge,” he said.

Contracts ‘Under the Radar’

Although some local unions are more amenable to working with districts, labor bosses at state and national union headquarters won’t hear of it, Gunn says. He cites the Michigan Education Association’s refusal to allow the Saline school district in Southeast Michigan to renegotiate their contract to close a $1.5 billion budget gap.

Twenty teachers lost jobs when the union would not agree to concessions, while administrators and support staff agreed to concessions and parents agreed to pay-to-play fees for athletics and other extracurricular activities. EAGF reported on Michigan’s “black hole” spending in a study published earlier this year.

“Crafty half-truths, well-spun public relations, and a general ignorance of education issues by reporters have allowed unions to get away with murder for years because [their contracts] are under the radar,” Gunn said.

That may be changing, though, as unions miss a chance to “sacrifice and help schools—something the public would appreciate—and instead show their true colors,” he said.

Gunn said he hopes Ohioans will use the report as ammunition to fight tax increases for schools.
“They need to say to their lawmakers, ‘Hold on just a second now. Let’s cut all unnecessary spending we can cut before we take more from taxpayers,” Gunn said.

The Ohio Education Association did not respond to repeated requests for comment.
Increasing Knowledge Base

The report strengthens the school-choice movement’s credibility and effectiveness by increasing its understanding of contracts and funding, said Robert C. Enlow, president and CEO of the Foundation for Educational Choice, which helped fund the report.

“This kind of report shows that we’re serious players on all levels of education reform,” Enlow said. “We want to do them around the country.”

Jim Waters ([email protected]) is director of policy and communications at the Bluegrass Institute for Public Policy Solutions in Bowling Green, Kentucky.

Internet Info:

Education Action Group Foundation: “Ohio Teachers Contracts: The Black Hole of School Spending,” Spring 2010:
“Michigan Teacher Contracts: The Black Hole of School Spending,” Winter 2010: