Budget repair law leaves most school districts in good financial shape
MPS is one of the few districts to lose due to union contract stipulations
Bryan Polcyn FOX6 Investigative Reporter
9:25 a.m. CDT, July 14, 2011
WITI-TV, MILWAUKEE—
The budget repair bill is now law in Wisconsin and the state budget is now passed. So where does your school stand in battling statewide budget cuts? FOX6 Investigators has an answer that may surprise you, no matter which side you're on.
When Governor Scott Walker introduced his controversial collective bargaining bill in February, more than 150 school districts across the state rushed to lock in new union contracts. Hundreds of others elected to wait, so who came out on top? The finance director at one local school says everyone's a winner with one glaring exception.
Even when she's babysitting, Melissa Gruenwald is always challenging kids to do better. The first grade teacher is facing the toughest challenge of her young career. She says, "I have dedicated so much to the job and then with one letter it is completely taken away from you."
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Gruenwald is one of the more than 350 Milwaukee Public School teachers who received layoff notices at the end of June. She says it's all thanks to the drastic funding cuts done by Madison. "It's a lot of money being cut from education," she says.
Governor Walker's cuts amount to a 5.5% reduction in revenue per student for every district in the state. Brown Deer Public Schools Finance Director Emily Koczela says, "Typically when we have to cut the budget, class sizes go up, we have to cut sports, we cut music or gym something."
That could have been a catastrophe for school finance directors like Koczela. She says her and her colleagues in other districts got help from Governor Walker's budget repair law. "We all knew that our revenue cap was dropping in an unprecedented way, but we also all knew that we had unprecedented financial opportunity."
Koczela says you can think of a school budget as a pie divided up into four quarters. Two quarters are staff salaries, One quarter is benefits, the other quarter is everything else. "So when you had to balance the budget and couldn't touch three quarters of it, it came pretty tough."
The budget repair bill allows schools to cut into the slice of pie devoted to fringe benefits. It requires teachers to pay at least 12.6% of their own health care premiums and 5.8% of their salary towards their own pensions.
As the bill was tied up in court, Koczela says schools were left in an awkward position. "We were playing a poker game, all of us. Is this law going to make it or not? And we laid down our last card and it was an ace. But until we laid it down, we didn't know."
During the month the law was tied up in the courts, more than 150 school districts voted to lock in new union contracts or temporary side agreements. Those districts include Port Washington, Sheboygan, Racine, Menomonee Falls, Wauwatosa and West Allis.
Hundreds of others decided to wait like Shorewood, Grafton, New Berlin, Elmbrook, Whitefish Bay and Brown Deer. Our investigation finds that virtually every district that signed a new deal got the same basic concessions on health care and pensions. Koczela says, "Almost every single other district that signed an extended contract signed it with the wind of the budget repair bill at their back."
Koczela says she's talked to budget directors in districts with contracts and those without, and they all say they're in good financial shape for the upcoming year.
All of them except MPS, which cut a new deal with teachers before Governor Walker was elected. Milwaukee Teachers Education Association (MTEA) President Bob Peterson says, "Even before these various threats took place. We stepped up to the plate and said we want to do what's right for the kids and we settled the contract."
MTEA agreed last fall to a salary freeze and health care concessions that saved the district $50 million, but it still leaves taxpayers funding 100% of the teachers pension.
Milwaukee Public Schools Superintendent Gregory Thornton says, "Hindsight is 20/20. At the end of the day with the same conditions. I would probably do the same thing."
While it may have seemed like a good deal at the time, Superintendent Thornton is now stuck with an $82 million budget hole. That means massive layoffs, which he says will directly hurt kids in the classroom.
That's when Superintendent Thornton asked the union to reopen the contract and kick in for their pension. "It was hard for me to ask. It's hard for them to say yes. it's gonna be hard for them to say no. They're in a no win situation, so to speak."
Thornton says the union could save 200 teacher jobs by agreeing to have all teachers contribute 5.8% of their salary toward the pension, which is now the statewide standard. The union says no way.
FOX6 Investigative Reporter Bryan Polcyn asked MTEA President Bob Peterson, "You had the choice of layoffs or pension contribution. Did you see that choice? Why did you make the choice of layoffs?"
Peterson answered, "I didn't choose. I didn't layoff anybody. I have been laid off and don't wish that on anybody."
Peterson says MPS teachers have already given enough. Gruenwald agrees even though it's her job that's on the line. "Of course I want to have a job, but I think when it comes down to it I don't really know if in the long run continuing to give out more and more concessions is going to help the district."
On a union-friendly Facebook page, another MPS teacher argues they should all agree to the pensions contributions. She said, "We can save jobs and show our state that we are not the 'greedy union thugs' that we are purported to be."
Another teacher asks "Why is it seemingly better to have layoffs as opposed to paying a bit more?"
Yet another teacher emailed the FOX6 Investigators saying, "If there were a way for the union to open the contracts and only negotiate contributing towards pensions, I would hope that they would at least consider having those discussions."
MPS Superintendent Thornton says, "We're constantly talking and I think potentially there may be a little optimism for the children and may actually restore some teachers down the road."
This quote was made before the MTEA put the nail in the coffin on reopening negotiations.
The MTEA's position on this topic means the district's brightest young teachers are getting the axe. Gruenwald says, "They don't look at your job performance. They don't look at what you do for the school. They don't look at test results."
Gruenwald was a model teacher at 35th St. school. Her first graders all showed substantial improvement in reading scores from fall to winter to spring, but she's only been teaching for four years.
Under the terms of the current union contract at MPS, seniority rules. Gruenwald says, "That's why seniority needs to go."
Superintendent Thornton says this is a subject he disagrees with the union. He wants to get rid of the seniority system too. "I am losing great teachers, great teachers are actually exiting MPS."
Right now there's nothing he can do about that, because after all it's in the contract.
MPS Superintendent Thornton says it's not too late for the MTEA to agree to the pension contribution and potentially save up to 200 teacher jobs. He says the absolute drop dead date for him is the third Friday in September.
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