Column: Duluth School Board fails as steward of tax dollarsDuluthians have been badly served by members of our current and recent school boards. The latest example is word (ferreted out by the News Tribune, not announced by the board) that its employee pension fund is woefully short of where it should be.
By: Virgil Swing, For the Budgeteer News
Duluthians have been badly served by members of our current and recent school boards. The latest example is word (ferreted out by the News Tribune, not announced by the board) that its employee pension fund is woefully short of where it should be.
Even the board and school administrators admit the district has serious financial problems. Since the large majority of district costs are for current and former employees, it’s hard to see how needed changes can come without cutting people costs.
But the board has at most tiptoed around that issue; the time for tiptoeing is long gone. The board will release a tentative budget for the next school year soon and set that spending plan in concrete by June.
A long list of possible spending cuts does include increasing employees’ share of health care costs and freezing the automated step-and-lane increases that go to teachers not yet atop the pay scale. Those would cut people costs.
But I have yet to hear any administrator or board member talk about the huge costs for retirees’ fringe benefits. Like other cuts, those won’t come easily and must be negotiated with the teachers union. And they will presumably be imposed on future retirees, not current ones.
That process should have started long ago and could have avoided the serious financial woes that have the district considering things such as a four-day school week, a cut in class hours and fewer elementary specialists.
How serious are the district’s financial problems? Here are two examples: The fund to pay retirees’ pension benefits has only 63 percent of what it should have. And the budget’s reserve fund has fallen from $14.7 million in 2010 to $3.6 million.
The 2013-14 budget shortage is $3.5 million, and that assumes teachers won’t get a pay raise next year. And board members would be delusional to think voters endorse actions like the way-above-inflation 11.9 percent increase in the property tax levy they approved in December.
Failings of recent boards, of course, include the hugely overpriced Red Plan that built spiffy new schools but also angered voters, who were denied a vote on it, while increasing the budget’s red ink.
Board members seem to be placing a lot of faith in voter approval of a special property tax levy even though three such requests failed badly in 2011. They also count on selling schools closed under the Red Plan.
All these dark clouds hover over a district in which many classes have more than 40 students, with some near 50. And individual board members have signaled an unwillingness to accept some possible cuts.
Recent boards deserve the blame for the decisions that brought the district to this sorry state. The teachers union has bargained for unaffordable benefits, but it’s their job to do that. The board must learn to say “No.”
District residents can also share some blame. The voters who rejected those 2011 special-levy issues at the same time elected to the board three former members of the teachers union. Expecting them to take an ax to people costs is like hiring a fox security officer for your henhouse.
The only long-term answer is to cut people costs to levels that are affordable in the long run. I’ve said several times in this column that teachers have difficult and crucially important jobs and cutting their pay is not an answer.
But trimming the benefits they now get at retirement should top any list of long-run cuts. There’s no reason teachers must be allowed to retire in their 50s — or to get too-generous pensions and district-paid health insurance.
Some corporate executives who’ve ended or trimmed such perks in recent years did so out of greed. More have done so to keep their companies financially sound, ensuring all their jobs continue for Americans.
Contrary to what some public-employee unions suggest, the world will not end if pensions become 401(k) accounts.
Duluth school administrators and board members no longer deny their money problems. But they’ve got a long way to go to persuade objective observers that they’re ready for the bitter medicine that can return them to fiscal health.
Budgeteer opinion columnist Virgil Swing has been writing about Duluth for many years. Contact him at email@example.com.