Giving raises as if there is no tomorrow: Chapter 2

Back in February, we ran an editorial headlined, "Public employees get raises as if there is no tomorrow."
And when we wrote it, we knew -- as surely as the night follows the day -- that we'd be writing an epilogue sooner or later. We guessed it would be in July or August. It's sooner.
The occasion for the first editorial was, in part, the Youngstown Board of Education's approval of a package for its nonteaching employees that provided more than 13 percent in pay raises over three years. Just as significantly, it assured that health insurance plans would be maintained and that employees would not have to contribute toward health care premiums.
The estimated cost of the pay raise was $3.6 million. The cost of continuing top notch health care coverage with no employee co-pay is anyone's guess, because health costs are rising faster than any other segment of the economy.
At the time, we noted that the true cost of this contract was likely to be far higher. That's because while it covered a relatively small number of school district employees, it set the tone for the upcoming contract with school teachers, by far the district's highest single budget expense.
No way
Further, we observed that when many people in the private sector -- read that taxpayers -- are losing jobs, taking pay cuts and making larger contributions toward health coverage, it was the responsibility of school boards to look their unions in the eye and say no to higher cots.
We held out little hope that the Youngstown Board of Education would actually do so, and our expectations have been fully realized.
The Youngstown Education Association has overwhelmingly ratified a new three year contract offered to it by the board. And little wonder.
The contract contains 4 percent increases in each of its three years and, of course, teachers will not have to contribute toward their health care coverage. The board gave the same to administrators.
Under the contract, the pay for a teacher with a bachelor's degree and no experience, which was $25,785 this year, will go to $26,816 this July, $27,888 the following year and $29,004 the year after that. A teacher with 15 years experience and a masters degree, who made $48,733 this year, will receive $50,682 beginning in July, $52,709 the year after that and $54,817 in the final year.
According to a budget forecast, personnel costs, which were $48 million this year, will increase to $58.7 million in 2005 -- a 22 percent increase. Retirement and insurance benefits, now at $17 million, are projected to climb to $20.6 million by 2005.
None of this seems to bother the board of education, because its forecast has it finishing in the black the next four years. The projected year-end balance will be devoured by the increasing costs, dropping from $19.7 million this year to $837,000 in 2006. By 2007, the district will be in the red.
Going back to our second paragraph, the reference to night following the day should be attributed to Shakespeare in "Hamlet." And we feel compelled to quote a few more lines from the advice Polonius is giving to his son: "Neither a borrower, nor a lender be; For loan oft loses both itself and friend, and borrowing dulls the edge of husbandry."
Make no mistake. The people whom Youngstown voters elected to run their schools chose expediency over husbandry. They have the money today and see no problem spending it until the district is broke. Then the alternatives will be to ask the voters for more money, cut programs at the expense of students or end up back in fiscal emergency, borrowing from the state fund.
The stars are aligned
How can it be otherwise? The economy remains flat. Property tax rolls are stagnant. And it is still not certain what Ohio's school districts will lose in the upcoming and succeeding state budgets -- but they are almost certain to lose.
The General Assembly is intent of shifting money from public schools to charters schools and voucher programs and is pursuing property tax relief for business and industry, without providing state money to make up for local shortfalls.
Given these uncertainties, the board had no business assuming that it can afford the contracts it approved this year. Given the economy, state cutbacks and rising health care costs, the likelihood of Youngstown city schools ending 2005 in the black is slim. And that's not even considering the possible cost effects of a growing tendency among higher-paid experienced teachers to delay retirement because the State Teachers Retirement Fund is having problems of its own.
The Youngstown Board of Education has negotiated a slew of deals that are simply out of touch with the economic realities of the day.
Board members who were patting themselves on the back for reaching an easy agreement with the district's employees will eventually have a harder time explaining themselves to the voters.