Cary Elementary School District 26 Board President Scott Coffey wrote a comment under the effective tax rate story on Tuesday that I posted as an article on Thursday.
Coffey tells how the school board cut costs in a comment, which is posted here:
How the Cary Grade School District Managed to Dig the District Out of the Pit
Watchdog 2, while there is nothing we can do regarding pensions, we have addressed our labor costs.
The salary changes under the union agreement since FY12 have been:
12= -3.0%
- 13 = zero
- 14 = zero
- 15 = +1.7%
- 16 = +1.5%
Additionally, over the previous 3 years we have had in place a BA-0 new-hire policy, where new hires are only brought in at the lowest base salary in the district.
My guess is that this policy alone currently saves the district more than a million dollars/year given all of the new hires brought on during the previous 3 years.
The result:
Per ISBE, our average teacher salary has fallen from $80,226 in 2011 to $57,006 in 2015 (or almost a 30% reduction).
I think we’ve had great success in reaching a point where the district can offer the programs, technology, new textbooks, etc. to make our students successful, while operating with an affordable, sustainable cost structure.
As to the levy, while we are already operating with the second lowest operating tax rate in the county for K-8 districts, over the last 3 years we have actively implemented various different strategies that have reduced the current and future debt service levy by $1.6 million.
By refinancing debt to reduce interest expense, refunding for less through the contribution of fund balance, establishing a bond sinking fund to retire debt early on its call date, and abating the debt service levy, we have been actively trying to reduce our community’s tax burden.
For 2017, the fourth year in a row, it looks even better.
The Board will shortly review a program that’s on target to add another $3.2 million in tax reduction savings through the simultaneous use of all of these strategies.
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This is the school board on which newly-slated District 3 County Board candidate serves.
Reports like this and the one yesterday contain the kind of information that I imagine taxpayers all over Illinois would like to read about their local tax districts.
Relative to wage increases, the County Board could take lessons here.
Simple steps that too many school districts in Illinois do not follow.
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Cary District 26 is an elementary school district.
There would be two opportunities for consolidation.
Consolidating them into another elementary district, to create a bigger elementary school district.
Or consolidating them into a high school district, most likely with other elementary districts, to create a unit school district,
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But would the other school districts involved in such a reorganization follow the above practices?
We could look at such districts, such as Crystal Lake High School District 155, which contains Cary Grove High School, which is the public high school district which Cary District 26 graduates attend.
Mark, I think to the contrary.
The highest wage rates in the ‘consolidated’ district would apply to all.
Questioning,
A new, consolidated district is NOT required to migrate to the highest wage rates of the legacy contracts of the combined districts.
However, that has been the experience of consolidating districts in this state.
Why?
Its just easier to cave in.
Because the alternative requires a substantial amount of effort on behalf of the new Board members and Administration of the new consolidated district to battle the newly formed union to agree to a successor agreement that more closely matches the lower cost agreement rather than the most expensive labor agreement.
And, that, apparently is just too hard to do.
Somehow, people have come to believe that the new district has to live with the more expensive contract, that is not true.
Consolidating the 4 elementary’s that feed D-155 (3, 26, 46, 47) would be quite challenging.
Obviously, all 4 communities have to vote to approve.
And to get approval, there has to be an incentive for each community to want to consolidate.
We’ll start with taxes.
The Operating Tax Rates for the 4 districts are:
Cary 26 = 3.88827
CL 47 = 4.3488
PG 46 = 4.87884
FRG 3 = 5.717264
At a minimum, the entire proposal would have to drive down to at least Cary’s rate, otherwise Cary residents will vote NO to what would effectively be a tax increase.
So what happens if all the districts migrate to Cary’s rate?
Taxpayers save the following based on current EAV:
Cary = $0
CL 47= $7.4 million
PG 46= $2.1 million
FRG 3= $1.7 million
Total= $11.2 million
This is great for most taxpayers, but for Cary residents its tax-neutral.
What’s the incentive for their YES vote?
One might have to design the referendum with a new Tax Rate that is even below Cary’s current rate.
But, back to the above scenario, of course this means also that the new consolidated district will operate with $11.2 million less in annual operating revenue.
At a minimum, the question is, are there enough cost savings opportunities in the new district to cover the lost revenue?
Note: Existing debt service stays with the community that originally issued the debt so that is not a part of the puzzle.
Could a new Board successfully navigate all the challenges (and there are dozens of other issues I haven’t mentioned) and put a successor district in a financially affordable and sustainable position for the future?
Thank you for making my point: “Its just easier to cave in.”
Your comment: “Per ISBE, our average teacher salary has fallen from $80,226 in 2011 to $57,006 in 2015 (or almost a 30% reduction).” should be qualified by how many teachers retired and what was the burden they placed on the public pension system?
In the private sector, early retirement packages are frequently offered to ‘trim’ payroll costs. In the private sector, retirement is mostly in the form of an annuity which will never increase. Teachers, when they retire, do not receive an annuity, they receive a defined benefit pension which includes in most cases a guaranteed annual increasse. https://www.illinoispolicy.org/reports/pensions-101-understanding-illinois-massive-government-worker-pension-crisis/
So, yes your district lowered its payroll costs by increasing the cost to the taxpayers via a different tax ‘bucket’.