Another Lie by the NEA: East Greenwich Teachers Would Take Pay Cuts Under School Committee Proposals
One of the other lies being spread by the NEA is that the proposals offered by the East Greenwich School Committee would result in pay cuts for teachers.
The NEA tried to pass off this lie as fact in 2004-05 and Anchor Rising showed it was a lie then.
And it is a lie in 2007, too.
An example of the propaganda being spread this year came earlier from Pam, a teacher in East Greenwich, who wrote these words in the Comments section of another Anchor Rising post:
Please ask the administrators to take the same pay cut I would take if my contribution to health care went up to 15-20% and my salary increased 1-2%.
In the early years of my career, I served as a Chief Financial Officer at several companies. Bear with me while we go granular in this post and do a CFO analysis to blow this latest lie out of the water.
As a citizen concerned about this NEA claim, the first step I took was to have a meeting with Maryanne Crawford, Director of Administration for the East Greenwich School Department. I met with her on September 6 for the purpose of getting empirical data so I could complete my own independent analysis. Therefore, please note that this analysis has not been prepared by the East Greenwich School Department.
After the meeting, I completed this Excel spreadsheet with 7 tables so my analysis would be completely transparent and subject to public scrutiny on this blog, unlike the NEA’s claims. If you want to dive into this issue, I would encourage you to open the spreadsheet and read the rest of this post while referring to the tables in the spreadsheet.
Here we go:
TABLE I: MASTER’S DEGREE PROJECTED SALARY SCHEDULE (2006-07 THROUGH 2009-10)
Maryanne informed me that 156 of the 231 East Greenwich teachers employed last year held Master’s degrees. I then chose to use that salary schedule because it represents the most likely pay scenario for teachers.
The first 2 columns present the actual 10 job step salaries for Master’s degree teachers in 2006-07, based on the most recent signed contract.
According to the East Greenwich Pendulum issue on September 6, the School Committee’s most recent offer was to increase salaries for every job step and education grade by 2.5% in 2007-08, 2% each in 2008-09 and 2009-10.
The balance of Table I then calculates the higher salaries for the 3 upcoming years based on those rates of increase.
TABLE II: MASTER’S DEGREE PROJECTED SALARY INCREASES (2007-08 THROUGH 2009-10)
For every job step below the top step 10, a teacher moves up each year to the next higher step. This is how teachers in job steps 1-9 realize 8-12%/year salary increases. I picked job step 5 as the example to review as it is the mid-point between step 1 and step 10 and would, therefore, have roughly the average increase among non-step 10 teachers.
Once at step 10, however, the salary increase each year equals just the rate of increase shown in Table I. Maryanne told me that just under 60% of last year’s East Greenwich teachers were at step 10. Therefore, if anyone is going to suffer a “pay cut” in a new contract, it will be these teachers who receive the smallest annual increase in salaries (albeit after up to 9 years of receiving 8-12%/year increases).
Table II shows that:
- Step 5 teachers receive $4,372-4,525/year salary increases over the next three years
- Step 10 teachers receive $1,431-1,745/year salary increases over the next three years.
TABLE III: HEALTH INSURANCE PREMIUM PROJECTED COSTS
Table III notes that family coverage with Blue Cross Blue Shield – Healthmate is the most common form of health insurance utilized by East Greenwich teachers, with 110 FTE’s out of 231 teachers using such coverage last school year.
Second highest is the single person coverage with Blue Cross Blue Shield – Healthmate, with 37 FTE’s using such coverage last year.
All other school department health insurance options were only used by 16 additional FTE’s as the remaining 68 FTE’s did not use any form of the East Greenwich schools-based health insurance coverage and instead took a buyback cash bonus of $5,000 in 2006-07.
Therefore, Table III focuses on the family and single person health insurance premium costs for Healthmate over the next 3 years. Actual premium costs in 2007-08 for such family coverage costs the school department $13,618 and the actual single coverage costs them $5,229.
Premium costs are assumed to go up 10%/year in the two years following 2007-08. The East Greenwich School Department’s policy is a self-insured, claims-based policy through the West Bay Collaborative.
TABLE IV: HEALTH INSURANCE CO-PAYMENT EXPENSES PROJECTED TO BE INCURRED BY TEACHERS
In 2006-07, teachers at job steps 1-4 paid a 5% co-pay while teachers at job steps 5-10 paid a 10% co-pay.
According to the East Greenwich Pendulum, the School Committee’s most recent offer proposed increasing co-pays for all job steps to 12% in 2007-08, 15% in 2008-09, and 18% in 2009-10. Table IV assumes those percentages and computes what the teachers would pay in co-payments for the next three years:
- Family coverage annual co-pays would increase from last year’s $655-1,311 to $1,634, $2,247, and $2,966.
- Single coverage annual co-pays would increase from last year’s $260-519 to $627, $863, and $1,139.
TABLE V: NET INCREASES IN PRE-TAX HEALTH INSURANCE CO-PAYMENT EXPENSES PROJECTED TO BE INCURRED BY TEACHERS
Table V simply takes the data in Table IV and calculates the annual net increases in pre-tax co-pays made by the teachers.
- The single step 5 and step 10 teachers would pay $235-368/year in higher pre-tax health insurance premium co-payments.
- The married step 5 and step 10 teachers would pay $323-719/year in higher pre-tax health insurance premium co-payments.
TABLE VI: NET INCREASES IN AFTER-TAX HEALTH INSURANCE CO-PAYMENT EXPENSES PROJECTED TO BE INCURRED BY TEACHERS
The East Greenwich School Departments offers what is called a Section 125 plan where teachers can pay their health insurance premium co-payments in pre-tax dollars, thereby lowering their taxable income and subsequent taxes.
Using a 2006 Federal Tax Rate Schedule, married couples filing jointly pay 25% income taxes on every marginal dollar earned above $61,300. So I assumed 25% plus the Rhode Island income tax rate is about 25% of the Federal rate or about 6.25%. I rounded the two percentages to 30% and Table VI calculates the true, after-tax cost to teachers of the higher health insurance co-payments.
- The single step 5 and step 10 teachers would pay $165-257/year in higher after-tax health insurance premium co-payments.
- The married step 5 and step 10 teachers would pay $226-503/year in higher after-tax health insurance premium co-payments.
Bluntly, that is not asking very much and suggests the School Committee should be more aggressive in demanding higher co-pay percentages in its next offer.
TABLE VII: NET CHANGE IN CASH COMPENSATION PROJECTED TO BE REALIZED BY TEACHERS
Table VII gives us the “bottom line” and proves the NEA has lied once again when they claimed that the offer from the School Committee would result in the teachers taking pay cuts.
- The single step 5 teacher would realize annual net cash compensation increases of $4,207-4,332/year.
- The married step 5 teacher would realize annual net cash compensation increases of $3,943-4,243/year.
- The single step 10 teacher would realize annual net cash compensation increases of $1,266-1,487/year.
- The married step 10 teacher would realize annual net cash compensation increases of $956-1,518/year.
No negative numbers anywhere to be found.
[Later Note: Enjoy Bob Walsh’s challenge of this conclusion in the Comments section – and my response debunking his claim. To provide the numbers in support of my conclusions, I have added an additional summary analysis of the net cash compensation numbers for the original School Committee offer – even adding the modified spreadsheets for public scrutiny. It can be found at the bottom of the Extended Entry section below.] As an aside, the negotiating teams can debate whether step 10 teachers should get larger increases but my position – if I was on the team – would be that such changes are only possible if the hefty increases to steps 1-9 teachers are reduced to at least offset the additional step 10 salary increases.
CONCLUSION #1 ABOUT INTENT
Every East Greenwich teacher should bluntly ask their union leadership why the NEA is lying to them. And then every adult resident in town should ask the NEA the very same question.
The NEA likes to run around and accuse School Committees of negotiating in bad faith. But the NEA is the only party which has been shown – multiple times now – to lie to the taxpaying public and even its own members.
CONCLUSION #2 ABOUT ECONOMICS
It is not at all clear that the School Committee’s latest proposal will allow its budget increases to remain under the tax cap restrictions. (That is a separate analysis for another day. Stay tuned.)
Whether all of us want to admit it, the gravy train ride is over. Welcome to the real world of constraints, like ordinary working families and retirees live with every year.
I believe the only really effective contract that both does right by deserving teachers and lives within the tax cap will require wholesale changes to the 10-step salary schedules. That kind of change won’t happen quickly and it certainly won’t happen with a mediator trying to split the status-quo baby. The latter is a process which ensures the unsustainable economics of past contracts is only tweaked when it needs a complete overhaul.
I am concerned that the School Committee, which has shown decidely more courage than the norm so far, is still not thinking sufficiently outside the box.
Nobody expects the NEA to think outside the box. After all, their agenda here is to blow up the tax cap so uncontrolled spending can continue.
I hope the School Committee appreciates how much support there is already for them taking a firm stand to find a new way. It is too bad that the negotiating party across the table is only capable of lying instead of being constructive problem solvers.
Remember: Anchor Rising is THE place to go for information on the teachers’ strikes issues in Rhode Island. See the Extended Entry for all relevant links.
To get up to speed, here are the links – in chronological order – to other Anchor Rising posts about the East Greenwich teachers’ strike and the NEA:
Saying “No” to Legalized Extortion
Education Partnership Reports: Learning a lot more about RI teachers’ union contracts
Reflecting on Labor Unions on Labor Day
Update on the East Greenwich Teachers’ Contract & Suggested Future Actions
Breaking News on Anchor Rising: East Greenwich Teachers to Strike on Tuesday
More on the Issues in the East Greenwich Teachers’ Union Strike (This is a particularly important post on the substantive issues in dispute.)
The NEA’s Latest Disinformation Campaign in East Greenwich
Sometimes What is Old is New: Misguided Incentives Drive Public Sector Taxation
East Greenwich School Committee: Press Release & General Update
Mr. Subliminal Must Have Written the EG Teachers “Open Letter”
The Continuing NEA Disinformation Campaign in East Greenwich: Lies, More Lies & Even Some Melodrama
News Flash: Judge Orders East Greenwich Teachers Back to Work on Friday, September 7
Other relevant posts on Anchor Rising include:
Burrillville Teachers to Students: Let the Pawns Skip School
Crowley, You Charmer
Researching from Outside the Library
Children Are Their Life? No, Children Are Their Leverage.
Citizen Context for Negotiations
One Side of the Phone Conversation
My Favorite Samuel Gompers Quote
The Guidebook to Public-Abuse
Not Quite Breaking (Except of Taxpayers’ Backs)
The Other Side of the Conversation in Tiverton
The Rhode Island Right’s Bizarro Politics
A Case of Crossed Hands
Best We Can Do Is Get Involved Every Time
The Continuing Saga of the Funding Formula Distraction — A Tale of Two Cities
(These three posts immediately above in this section address the important questions of (i) what RI law and court decisions say about teachers’ strikes; (ii) the tax cap and level funding of education; and, (iii) statewide education funding formula.)
This Is the Way the System Works, the System Works, the System Works
ADDITIONAL SCENARIO ANALYSIS
In response to Bob Walsh’s challenge that failed, here are the spreadsheets analyzing the original School Committee offer of 2%, 1.75%, and 1.75% salary increases to the 10 steps over the 3 years plus 20% health insurance premium co-payments in all 3 years.
The Table VII in this modified analysis gives us the “bottom line” and proves the NEA has lied once again when they claimed that the offer from the School Committee would result in the teachers taking pay cuts.
- The single step 5 teacher would realize annual net cash compensation increases of $3,652-4,256/year.
- The married step 5 teacher would realize annual net cash compensation increases of $3,213-4,127/year.
- The single step 10 teacher would realize annual net cash compensation increases of $846-1,187/year.
- The married step 10 teacher would realize annual net cash compensation increases of $407-1,058/year.
Some lower numbers, as you would expect. But, again, no negative numbers anywhere to be found. So who is being personally dishonest and manipulative of data?