Report: Teachers Should Take Pay Cut, Pay Higher Insurance Premiums

Both sides in the long process to iron out a contract for the Dearborn Public Schools District’s teachers appear to be claiming victory, now that a fact finder’s report regarding the labor situation has been released.

The fact finder, Kenneth Frankland, was appointed by the Michigan Department of Energy, Labor and Economic Growth on Aug. 9, 2010, to consider the district’s and union’s positions on wages and other issues and render an opinion regarding what the district wants–and what teachers expect–in its next collective bargaining agreement.

The report says, mainly, that district teachers should take a pay cut and pay higher premiums for insurance, but not at the levels requested by the district.

“We saw a lot of things that we really felt were important in the report,” said David Mustonen, the communications director for the schools. “There were three things that they agreed with us on, which is a longer step system, wage concessions and higher copays for health insurance. So we’re basically happy with the report.”

Chris Sipperly, president of the Dearborn Federation of Teachers, also said there were many things that boded well for teachers when they return to the bargaining table at the Jan. 14 board of education meeting.

“I think the report showed fairness,” she said. “He listened to all of the facts that both sides gave him, and he found that some of the concessions the district was asking for were too much. It’s not that we didn’t have concessions on the table, or that we didn’t expect to take concessions, but what the district was asking for was too severe.”

Wage Disagreements May See Resolution

Fact finding is a process by which an independent party reviews all of the factors that are influencing the district and the union’s inability to work out a labor agreement. It is not binding on either the district or the union.

In Dearborn's case, both the district and the union agreed to go to fact finding when typical negotiations failed to bring consensus among the parties. The district contract with teachers expired in June of 2009 and has been debated ever since.

The main point of contention between the parties is wages. The district proposed teacher’s wages be tied to changes–either upward or downward–in state per pupil funding. The DFT opposed the suggestion. The district asked for a 4.8 reduction in salaries this year.

Frankland suggested teachers accept a 2.4 percent pay cut this year and a freeze next year.

He also suggested that additional steps be added to the district’s current system, which means teachers would take three years longer to reach top pay levels. The number of steps added was not as many as the district wanted to add, according to the report.

The 4.8 percent pay reduction–when viewed in the light of other cuts–was not feasible, Franklin said.

“While 4.8 percent may be desirable from the board’s perspective and may have some logic, I sense it is too much to ask when coupled with changes in the step schedule and health care costs,” he said in the report.

Frankland also questioned the conventional wisdom of connecting pay to per-pupil funding.

“How, for example, do DFT members responsibly manage [their personal] finances when one’s paycheck is unexpectedly and substantially reduced–depending on the unpredictable vicissitudes of state actions?”

At the top of the pay scale, a teacher could make about $84,000 annually. However, retirement incentives offered by the district and the state have pared the number of teachers earning top pay downward.

Insurance Costs

Another stumbling block for the district and its teachers has been the cost of health insurance.

The district asked teachers to pay 100 percent of the difference between its expensive Blue Cross PPO plan and lower cost Health Alliance Plan and Blue Care Network HMOs.

Frankland suggested that paying 100 percent is too large of a jump for teachers at this time, and suggested they pay one-third of the cost difference between a PPO and an HMO.

There would be no cost increases for those who accept the HMOs offered by the district. The cost difference for an individual who elects the PPO over the HMO is $1,392–that number jumps to $7,812 for a family.

Feeling the Pain

The sluggish national economy and the 10-year-long Michigan recession has take its toll on Dearborn Schools.

For the 2009-10 school year, the district was $8 million in debt. Once the debt was resolved, the district was hit with $10 million in cuts mid-year. Some of the dollars were restored by the economic stimulus and modest enrollment increases, but there are still significant financial issues ahead for the district, which educates about $18,500 students.

Frankland did commend the district on its management of funds.

“This is neither a bankrupt district nor even one on the watch list,” he said. “This is so because the board has taken drastic action and in the issues presented wants to avoid the slippery slope and seeks as many concessions from the union as possible.

Though it’s likely her membership may have to take a pay cut, Sipperly said she believes the report will grease the wheels toward inking a contract.

“The district said they wanted to see what was in the report,” she said. “I think it’s something we can all work with.”

View the entire fact finder report here.