Why Are Your Taxes Going Up: Ocotrara’s High Cost Of Labor

Mo MoneyI want to explain why I am focusing in on school performance and teachers’ salaries. High labor costs are the primary reason for our currently high taxes. I call it The Elephant In The Room, because it does not get discussed. Instead of the school district tries to control labor costs by cutting positions and programs. What they have not done, and do not want to talk about, is why we have not worked at controlling labor costs in a real way. The school district has historically paid high wages compared to other schools in Chester and Lancaster counties.

Within the 2013-14 proposed budget…

  • Labor costs (salaries and benefits) represent $27.6 Million of the total $47.8 Million spending;
  • Salaries represent $19.2 Million of the $27.6 Million labor cost;
  • The budget increase and tax hike of $1.2 Million, after other debits and credits, is almost completely labor costs of $1.1 Million;

This trend will have us paying 40 mills by the 2015-16 budget, and 50 mills within 10 years.

Without change, the hike is necessary. The district’s 2013-14 budget presentation is on their website. The only way to avoid a tax hike is to either balance the budget using money from school’s “savings account” or cut something. Balancing using the “savings account” is only temporary, and sets us up for a greater tax increase next year. The question becomes, do we cut programs for the kids, cut positions and increase class size, or do we start with the adults?

It is also unreasonable 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?

The last contract had been promoted as a victory for tax payers. When our entire tax increase is caused by labor costs, does it feel like a victory? When the Octorara Area School District has been historically paying high salaries, and any pay increase only pushes those salaries even higher, does it feel like a victory?

If 15 years, or more, of paying high wages had resulted in a substantial return, and Octorara was one of the best performing schools in Pennsylvania, I don’t think anyone would be talking about labor costs. We are not one of the best, we are one of the worst performing schools in Chester County. Paying high salaries, hoping for high performance, has been a failed experiment at taxpayer expense.

Octorara’s labor cost issue was reported in the news long before I ever got involved. It is nothing new, and a primary reason for Octorara’s high per-student cost. It is not because of the “complexities” of school budget finance. It is not our debt service. It is not the reduced revenue from state and federal sources. It is not the cost of charter schools. It is not clean and green regulations. Those topics are used to keep us from talking about the real cause.

3 thoughts on “Why Are Your Taxes Going Up: Ocotrara’s High Cost Of Labor

  1. Maybe good teachers need an incentive to work? Teacher pay should remain relatively equal across the county and should not be based on tax revenue. Maybe we should look at how schools are funded in this state instead of singling out the problems of an individual school that many others are facing.

    • The issues this district faces are not typical. The major factor is controllable costs not being controlled. If there was no issue with high labor costs, and high debt, your arguments would have validity. The issues I discuss in the blog are not issues of funding.

      I do agree with the idea of incentives for good teachers. Unfortunately, the unions oppose and vigorously fight against any type of pay for performance incentives.

      • I wish we could base the teachers salary on their performance level instead of the union rates.

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