The Austin Chronicle

We're 49th! ... Or Just Seventh of 10

Union and Austin ISD argue over teacher pay – and what to do about it

By Richard Whittaker, April 9, 2010, News

When it comes to education, Texans are used to being at the bottom of national comparisons. But even with those low expectations, residents of the Austin Independent School District may be surprised that the city ranks 49th among the Top 50 districts in Texas for basic teacher pay.

The announcement came April 1 from Education Austin, but it was no April Fools' Day prank. Outside Lanier High School, surrounded by teachers wearing "AISD 49ers" shirts, teacher and staff union President Louis Malfaro argued that the ranking is the result of years of underpayment, a failure by the district to remain competitive. After the press conference, he said, "There is a net outflow of teachers from the Austin school district into the surrounding urban districts." Unless AISD does something serious about teacher pay soon, he added, the talent loss could become critical.

AISD quickly issued a rebuttal and its own statistics: Instead of 49th out of 50, the district argued that of the 10 biggest Texas districts, it actually ranks seventh. The difference (aside from comparing AISD against a smaller peer group) is in the benefits. The district has spent the last two years shoring up its health insurance and sick leave programs and, unlike some other districts, still makes Social Security contributions for employees. "All-in-all, it's a benefits package that is quite generous, and that many other working Austinites do not receive," the district wrote in a press release.

Malfaro was unimpressed. "It's embarrassing," he said, "that I have to line up 50 teachers in goofy T-shirts and almost beg, 'Don't make us your last priority.'" He is equally disappointed by AISD's math. Twenty years ago, firefighters and teachers in Austin earned similar salaries. Now the average firefighter earns $61,000, while the average teacher pulls in $45,000 (see chart, above). The problem, he argues, is not that the city pays its employees a decent wage; it's that the district doesn't. As for the comparison to other teachers, while Malfaro conceded that AISD's $400/month per employee health insurance contribution beats the statewide average of roughly $250, other Central Texas districts offer similar packages and a better base salary. "A thousand or 2,000 in health benefits," he said, "doesn't take the edge off."

The Greater Austin Chamber of Commerce has remained neutral on the proposed salary increase. Vice President of Education and Workforce Development Drew Scheberle said, "I've told [Malfaro] we're not opposed to a pay raise, but it needs to be within the long-term goals that the district is trying to accomplish." So far he has yet to see any "holistic place" where a pay raise would fit into the strategic plan while helping reach the core goal of improving graduation rates. As for the value of benefits and incentive pay, he added, "For strategic compensation to work, base pay has to be competitive."

AISD teachers have recently had a pay raise. Last August, after being provided with a one-time cash injection by the Legislature, the AISD board of trustees approved a $950 annual salary increase for teachers and a 3% hike for administrative and classified employees. Even with that cost-of-living adjustment, Malfaro argued, the district still has not made enough real steps to retain qualified staff. He said: "With the exception of this last year, when the economy tanked and people froze, in a typical year AISD hires 800 new teachers. That's a 15 percent turnover."

The district's own figures support Malfaro's concerns. In 2006, AISD questioned 1,167 teachers as part of its Employee Coordinated Survey. Within a year, 8% had switched to another campus, and 17% had left the district completely. The highest attrition rate is among teachers in their first three years, when they have the fewest personal commitments binding them to a district and are also the lowest paid (see chart, above). Few go very far; instead, they transfer to nearby districts like Hays, Round Rock, and Pflugerville. "Part of that is pay, but part of that is affordability," said Malfaro.

When Malfaro started teaching more than two decades ago, AISD had the pick of employees because the district paid well. "That's completely flipped around now. The cost of living is so much better in the surrounding [suburban] doughnut, and the pay is better too." If Malfaro graduated now and went to work for AISD, on average he would start at $200 more a year than a classmate working for Round Rock ISD. But with five years experience, the Round Rock teacher will be earning an average of $1,385 more a year than his or her AISD counterpart. For a 20-year veteran, that difference rises to $2,731; for a Leander ISD teacher, it's $3,581.

Knowing that they have AISD at a financial disadvantage, board Vice President Vince Torres said, "The surrounding districts are waiting like vultures for people to say, 'OK, I'm ready to go.'" And replacing that departing staff is a costly process. At its April 5 meeting, the board appointed new principals for three elementary schools – Blanton, Rodriguez, and Williams – and must break out the checkbook to do it. To recruit, train, and orient each principal can cost the district almost $100,000. Similarly, recruiting and training a classroom teacher runs between $30,000 and $50,000. "It doesn't take long 'til you're up to a couple of million dollars for replacing personnel," said Torres.

Where to Live, How to Pay

The biggest concern for teachers in financial straits is one shared by many Austinites: finding affordable housing. On March 23, the Center for Housing Policy (the research arm of the National Housing Conference) released two studies, one showing the median house price in more than 200 U.S. metropolitan areas, and the other showing fair rental prices. Among Texas cities, Austin topped both polls as the most expensive place to buy or rent (see charts, below). Housing prices are not the district's fault, nor can AISD be held solely accountable for failing to keep up with inflation – the state's education funding formula includes geographic weightings that have not been updated since the 1990s. The table, Malfaro observed, "is so old that Round Rock has a higher cost of living index than Austin does."

AISD's standard policy for improving teacher retention is to use incentive pay to attract and keep high achievers, and the district is currently in the second stage of a pilot study called AISD Reach. The incentives can vary from waiving National Board Certification application fees to a potential $6,000 a year bonus for teachers with seven years or more of experience who remain at higher-needs schools. However, a study for the district by the National Center on Performance Incentives of teachers at the nine schools in the first year of the program showed that while 60% believed that incentive pay will help retain existing teachers, only 46% thought it would attract new teachers into the profession.

If the district does decide to improve base salary for teachers, the big question is how to pay for it. Strike the current property tax revenues off the list of possible sources. The Travis Central Appraisal District has given the district a pretty bleak forecast for property values: an overall 8% decline in 2010, slowing to 2% in 2011, then rising 6.75% in 2012. On average, homeowners should see a 4% drop in the taxable value of their residences, but that could be as much as 15% for commercial properties. While the state's funding formulas will fill much of the shortfall, it could still be a financial body blow for the district.

Nobody is looking for extra near-term assistance from the Legislature, which won't even return to session until 2011. Equally, Gov. Rick Perry's refusal to submit the state's Race for the Top federal funding application indicates little interest in helping districts look for new federal cash. Malfaro summed up the state's attitude as, "If it's not broken, don't fix it, but if it is broken but still moving, just let it keep limping down the road." Against that backdrop, Torres argued that school districts have too little control over their budgets, as shown by the district's rising Robin Hood bill – the amount it sends to the state under the recapture rules. The current district budget predicts a $177 million payment, Torres said. "Next year, we're predicting that we'll be sending $10 [million] or $12 million more. Will we have increased our revenue? Absolutely not. If anything, it's come down." As for building a stable revenue base, he said, "I'd almost say that's a fictitious goal until [legislators] develop a proper mechanism and formula to fund public education."

So what about the district's savings, the "fund balance"? Up until last year, Education Austin has castigated the district for being too frugal with its unexpended reserves, but in recent months the union has moved away from that position. Every indication from the district administration is that not only is it interested in maintaining the fund balance – expected to reach $128 million this year – but would like to see it increase. The high target is $140 million, which would allow the district to become its own insurer. That could save millions in premiums a year, but the increased liabilities mean pumping more money into the reserve rather than using it to augment teacher salaries.

Time for a Tax Election?

With no obvious cash appearing from the current revenue streams, Malfaro argues that the district should bite the bullet, approve a real base pay raise, and ask voters for a tax increase. AISD's combined rate of $1.202 per $100 of valuation is the lowest for any school district in Central Texas. "We're not asking for much – just a cost-of-living adjustment," he said. However, property tax increases require voter approval, and the district may already be considering using any electoral good will elsewhere.

There are two components to school property tax bills: "maintenance and operations," which covers day-to-day costs, and "interest and sinking," covering capital expenses through bonds and loans. A salary increase would have to come out of the M&O component. However, the district is already in the earliest stages of discussing a bond issue for construction and renovation, which would come out of the I&S component and require a separate election.

On Feb. 22, the board hired consultants DeJong-Richter to create a 10-year facilities master plan for the district. The Ohio-based firm has already carried out similar planning for school districts in Pennsylvania and West Virginia, but its experience is less to do with engineering and far more about community engagement. The last time the district issued a bond, it created a volunteer Citizens' Bond Advisory Committee to build basic recommendations for priority projects (see "Demand and Supply," Feb. 8, 2008). That took hundreds of hours of meetings, staff presentations, and campus inspections, all of which had to be stuffed into a 3½-month window. Before the district heads down that path again, Torres said, "Part of what we want [the consultants] to develop is a good process involving the appropriate community volunteers where we want them – on the campuses."

Torres argued that the district needs to learn from its most recent attempt to restructure its budget, which became a PR and morale disaster. When Superintendent Meria Carstarphen and her staff proposed declaring financial exigency earlier this year, it was supposed to be so they could eliminate unnecessary administrative positions and shift the money to new academic programs. Even though that proposal was rejected by the board (see "Have Mercy," Feb. 26), Torres said that the implication of financial collapse and potential job cuts "has hurt us tremendously. I've had 10 teachers and administrators approach me personally and say they've made the decision to go to another district because of the discussion. They've told me, 'If you're not going to do it this year, then you're going to do it next, and I just can't take that chance.'"

The board expects DeJong-Richter staff to make their initial presentation to the district in April. While this could be the first step toward a full bond election, it's unlikely that it would end up on November's ballot. Torres explained, "To do that we'd have to call an election in August, which would mean having the whole package together and approve it in June before we left [for summer break]." As for a potential M&O raise, the district is still in the earliest phases of its budget construction for the 2010-11 academic year. Torres said, "Dr. Carstarphen is still trying to work out how to make all the ends meet, and until she does that I don't think any of us are ready" to discuss an M&O raise.

But Education Austin is requesting that the district move more quickly and place a small M&O increase on the ballot for this November. Malfaro argued that the high turnout expected in Travis County for Democratic gubernatorial candidate Bill White, plus the traditional high level of voter support for education-related spending in the district, will make it an easy sell. He says he's frustrated that the district doesn't seem to have the same resolve as the city or the county or share their faith in local voters. "The school board is so timid," he said. "The firefighters got collective bargaining a couple of years ago. The citizens voted for it, and now they're the highest paid firefighters in the state. Why don't we ask [for that] for our teachers?"

He warned the board that this will become a factor in the May trustee elections. "We don't need to elect people to lecture us on how the economy's bad. We know the economy's bad," he said. "The point is, do you believe in all-day pre-K for poor kids in Austin, knowing what we know about early education? Do you support the superintendent's plan for an alternative recovery credit high school? Do you want high-quality teachers? If you do, we've got to gut it up."

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