Quantifying the Trend Which Led to the 3050 Tax Cap Law
Why did the Rhode Island Senate Bill 3050 tax cap bill become the law of the land?
Because of this unsustainable economic trend:
…These [union] demands, as in past negotiations, have resulted in school spending – and therefore taxes – rising faster than the increases in the incomes of the working families and retirees who reside in East Greenwich and pay for the teachers’ salaries and benefits out of their incomes. This longstanding practice reduces the standard of living of the residents. As such, they cannot afford for the school department to continue these reckless spending habits from the past and the recent state legislation now requires us to cease these bad habits.
The School Committee is faced with the following choice, just like every family who has to live within its means: Either teachers’ salary and benefit costs are going to be reined in or educational programs and teachers’ jobs will have to be cut. We cannot afford to continue the gravy train ride of past years…
Recalling that teacher salary and benefits comprise just over 80% of the total school budget, here are some hard cold facts for East Greenwich which quantify the problem with the economics of today’s teachers’ union contracts:
From the June 11, 1997 Financial Town Meeting (PDF document) regarding the FY1997-1998 budget:
- The town operating budget was $8,814, 281.
- The school operating budget was $16,490,358.
- The total operating budget was $25,304,639.
Fast forward to ten years later: From the June 12, 2007 Financial Town Meeting (PDF document) regarding the FY2007-2008 budget:
- The town operating budget is $11,954,197.
- The school operating budget is $30,889,947.
- The total operating budget is $42,844,144.
In other words, over the last ten years:
- The town operating budget increased 35.6% or 3.1%/year.
- The school operating budget increased 87.3% or 6.5%/year.
- The total town and school operating budget increased 69.3% or 5.4%/year.
- The school budget went from being 65% of the total operating budget to 72% of the total operating budget.
These numbers show how the school budget has resulted in living beyond the means of taxpayers, the working families and retirees of East Greenwich. Driven by outrageous and unaffordable teachers’ union contract terms demanded by the unions and enabled by spineless politicians and bureaucrats.
And that is why 3050 became law in the state.
Ask your town officials to do the same analysis for your community.