It has been publicized that RUSD is experiencing a high number of teacher retirements due to Governor Walkers budget and the fear of losing more retirement benefits.
So far the stories related by the Racine Journal Times were about teachers over age 60 with more than 30 years of service. It is doubtful that any teacher is jumping ship unless they were already thinking of retirement.
The RUSD contract signed last month guarantees current retirement benefits for the next 2 school years. The health insurance plan is identical for retirees and active employees and therefore has no financial impact on retirement decision. The only financial consideration is the salary deduction to pay 1/2 of their pension contribution. A teacher earning $60,000 annually and currently age 60 would gain the following by working two more years to age 62:
$52,000 by age 65 $2,000 annual pension increase Higher annual S.S. payments
These are the net gains even after paying the pension contribution and FICA Tax for the next two years.
No one is leaving because of the state's financial budget. The defeat of the referendums, no further reduction in class size, no added prep and training time and more accountability are more likely the cause.
Administrator Retirement
The Wisconsin Retirement System (WRS), covers all Wisconsin state and local public employees, except Milwaukee City and County. All RUSD full time employees are members of the state plan and qualify for full benefits, with no early retirement deduction, if they are age 57 with 30 years service.
However, RUSD has an enhanced plan for all Administrators at the taxpayers expense. A RUSD Administrator can retire at age 55 with 20 years of service. The early retirement deduction from the WRS plan is made up in a separate payment by RUSD for the life of the pension.
This is probably a small part of the total budget but again is indicative of RUSD thinking. Don't worry about spending, just figure out how to get more revenue from the tax payer.
Property Tax Freeze
This part of the budget refers to Counties, Cities, Villages and Towns. There are some exceptions for raising taxes, but very limited.
School District's have a different set of rules called "revenue caps." There are a number of formulas called general aid, categorical aid, high poverty aid, declining enrollment aid, etc.. Most school districts will be able to increase property taxes as evidenced by RUSD'S 6.4% increase
WI State Budget
Following is the 2011-13 Wisconsin Budget and the percentage of increase from the 2009-11 Budget:. Numbers are in billions of dollars:
After 5 months of protests, budget cut rhetoric and a $3.6 billion deficit, Wisconsin will spend $2.1 billion more in the next 2 years versus the last 2 years.
Wisconsin's two year budgeting process takes the 2nd year of the last budget and doubles it as a base for the new budget. Compensation increases, department and agency requests, and proposed new legislation costs are then added to create the new 2 year budget. This wish list always creates a deficit and the budget cutting or tax increase proposals start.
RUSD Budget
The Racine Unified School District presented the 2011-12 preliminary budget at the regular June school board meeting. It will not be final until late September when all state and federal aid is confirmed. The preliminary projections are usually accurate and do not vary significantly from the final budget.
Forecasted total revenue has been reduced from last years $275.2 million to $257.4 million. The changes in revenue are as follows:
Property Tax +$ 5.0 m State Aid -$17.4 mFed. Aid -$ 4.1 mOther Local -$ 1.3 m Total -$17.8 m
The most significant cost reductions to offset the loss of revenue comes from employee benefits and layoffs which are as follows:
Pension -$8.1 m Health Insurance -$7.5 m Staff reductions -$2.5 m
Student Enrollment
Counting 3K & 4K as 1/2 day students, total enrollment will be 20,158 for the 2011-12 school year. This continues the downward trend, 703 fewer students in the last 5 years. The following compares the revenue trend on a per pupil basis:
A key part of the 16.8% revenue increase in the three years, prior to this years reduction, was the one time federal stimulus program. Unfortunately, RUSD like many districts, used those one time funds to add staff and programs rather than necessary maintenance projects and/or increasing their Fund balance.
Student/Employee Ratio
According to the RUSD website there are currently 2,634 employees. That equates to a ratio of one employee for every 7.75 students.The proposed layoffs in this budget combined with a slightly smaller student enrollment will increase the ratio to one employee for every 8.03 students.
Staff Reductions
The proposed elimination of 124 positions will produced a savings of $2.5 million for an average of about $20,000 per position eliminated. This seems low since last years total compensation of $219 million for 2,634 employees was an average of$83,000.
The majority of layoffs (68%) were educational assistants, the lowest compensated employees. This coupled with unemployment compensation and severance pay most likely explains the lower savings.
In Conclusion
For the first time in recent memory the Racine Unified School District faces a reduction in total revenue and even a reduction in per pupil revenue. The majority of the reduction will be absorbed by the employees who will be paying 7 -9% of their wages to fund pension and health insurance benefits RUSD has fought "school choice" rather than embrace the inevitable, join in the conversation and try to use it to their benefit. With a proper plan they could have convinced legislators to include only elementary students in the first two years with the 250 student cap. This would be inline with their goal of smaller class size in K & 1st grade.
RUSD is behind in advancing "e-School' also referred to as virtual school. The state budget also eliminates the caps in this area and growth should accelerate.
RUSD used one time stimulus funds to add staff, including administration, which was knowingly unsustainable when these funds were no longer available. RUSD expected the Racine community to bail them out with $128.5 million in referendum money.
The future requires some tough financial decisions for RUSD and we hope this administration and school board are willing to make them. It should start with "decentralization," moving a significant amount of staff to the schools and give more responsibility and authority to the principals and the teachers. Add to this 3800 willing and able "Wings" volunteers and good things at an economical cost will start to happen.