The Cost of Wages: They Never Considered The Taxpayer

making-it-rain-benjaminsOk, we have come up with the magic number that needs to be cut from the budget $4,488,837.41. How do we get there? We can look at every  expanded or new non-mandated program over the last 7 years, add up the cost, and cut what needs to be cut. Unfortunately, starting here only causes suffering to the kids. We need to start with the adults, and we already know labor is our highest cost.

Inflation Model

In 2006-07 the average salary was $56,781. Since the start of the Great Recession, if teacher increases were kept at the rate of inflation, this would translate to an average salary of $62,874.75 in 2011-12 compared to the actual average of $66,523. Dr. Newcome gave me a current number of teachers at 197. This would have saved the school district and taxpayers $718,705.25.

However, we need to look deeper. While an average salary of $62,874.75 puts us below the average Chester County salary of $64,344, many of our neighboring school districts pay much less. Chester County’s average is skewed high because of the very high salaries, paid by very wealthy school districts like Great Valley, Tredyffrin-Easttown, and Unionville-Chadds Ford.

Competitiveness Model

Octorara Area School District pays a high premium compared to our closest neighbors: Coatesville ($59,662), Oxford ($54,843), Pequea Valley ($58,610). If we apply the highest, Coatesville at $59,662, the school district and taxpayers would have saved $1,351,617.00.

The Octorara Area School District May 2012 Finance Committee Meeting report shows that a mill in Coatesville is valued at about 2.5 times a mill Octorara. The question then becomes, should we even be paying salaries that high?

Economic Model

The same May 2012 report shows, while Octorara receives the least value from a mill, the Oxford School District is the next lowest.  The Oxford School District currently has a millage rate of 30.0502 verses ours at 36.66. Why is ours so much higher? A significant portion is teachers salaries. Oxford’s average salary is $54,843. If we paid teachers similarly, it would save the district and taxpayers $2,300,960.00. This is more than half of the reduction we are looking for in the budget.

We are not done! A strong argument can be made that even comparing ourselves to Oxford School District, because the low value of a mill, is too much.

All Things Considered

If we want to be draconian, we would adjust salaries proportionate to mill value. Oxford’s mill value, according to the May 2012, is the second lowest in Chester County, and is still worth 1.58 times more. That is the reality of how poor this district is, and has to be included in discussions about wages and in contract negotiations. If we set wages proportionate to Oxford’s wage-to-mill ratio, our salaries would average $34,530.81. That is how poor we are as a district!!

Before you gasp at such a low wage, it wouldn’t even be the lowest in Pennsylvania. That distinction goes to Turkeyfoot Valley Area SD in Somerset County. They have an average teacher salary of $32,988.

In fact, an average wage of $34,530.81 would put teachers more closely in line with average wages of this community. In the Borough of Parkesburg, the Median Family Income is $65,016, and the Income Per Capita is only $27,748. Adjusting the average wage to $34,530.81 would save the district and taxpayers $6,302,461.43, far beyond the “magic number” and without cutting anything for the kids. In fact, we would have more to spend on them.

Conclusion

Of course it is unreasonable to cut salaries from $66,523 to $34,530.81. However, it is also unreasonable that the poorest school district in Chester County is paying much higher wages than others. West Chester has a mill value of $8,230,657. It is the highest in Chester County, and more than 10 times the value in Octorara. We pay teachers close to the same. The West Chester average is $67,136. Is that reasonable?

8 thoughts on “The Cost of Wages: They Never Considered The Taxpayer

  1. Not sure how this matters now considering it was from 2009, but here is a post from a small local news blog:

    “Octorara’s classroom reputation took a hit this week as this year’s crop of tax activist raced to find the facts to support their conclusions about the district’s finances.

    Jack Mariano reminded me of a 2011 LancasterOnline story about how well Octorara High School fared in Newsweek’s 2011 ranking of the nation’s top 1,500 public high schools:

    Ask someone to name the academic powerhouses among local high schools, and the usual suspects — Manheim Township, Hempfield and Warwick — will probably come to mind.

    But when Newsweek magazine ran an article on “America’s Top Public High Schools” in June, only Octorara High School made the list — no other local schools were mentioned.

    So how did the little high school in rural Atglen make the cut?

    Newsweek based its rankings on only two measures: the number of advanced-placement, International Baccalaureate and Cambridge tests given to all students in 2008-09, and the total number of seniors who graduated in June.

    Schools that administered at least one test per graduating senior made the list.

    Octorara, which had 1.043 AP tests per senior, was ranked 1,512th of the 1,564 schools on the list.

    While its ranking was relatively low, Octorara can boast that it’s among what Newsweek considers the top 6 percent of public high schools in America.

    Octorara teachers and administrators said they’re not surprised at the ranking.

    “We think our top kids can compete at any (college) with anybody,” said Adam Udell, who teachers advanced-placement government and politics at Octorara.

    Udell is correct, our kids can compete at any college, in any trade school, in the Army, Air Force, Navy or Marines or on the job.

    The tax activists can argue all they want about the district’s high property taxes, a long overdue debate truth be told, but they should refrain from disparaging the academic performance and readiness of Octorara’s students.

    More Octorara’s graduates continue their education post graduation in a 4 or 2 year college or trade school or by enlisting in the military today than at any time in the district’s history.

    Let’s all celebrate the district’s academic progress while continuing the debate about the dollars and cents of the district’s budget.”

    I appreciate the idea that students did well in that year, but it is 2013 now! I also don’t know why the web page host is naming us as “tax activist’s” when we are just trying to find better ways to justify the means of raising taxes. In my opinion I do not think it is wise to call over 122 people tax activist’s considering they pay those high taxes. Tim has given us transparency, and people are getting a better understanding now on how the school system works. We have learned a lot from Tim, and I encourage everyone to use this blog as a teaching tool, instead of the ranting page like Parkesburg today.The future is our children’s education, and not a war between schools and tax payers. Calm, cool, and collective is the only way to achieve prosperity in our school district.

  2. How can the school have a savings account when the taxes have been going up for years? If the tax money wasn’t there to complete the budget, how is the extra money? Where did it come from? I wish I knew how much they had in that account, and I hope it is enough to freeze the taxes.

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