NEA: NEA Today: Taxing Times for Public Education -- November 2002

It can be pretty tough to believe the country has an education mandate at a time when there are teacher reductions in force (RIFs) in Massachusetts, Iowa, and Connecticut; position cuts and booming class sizes in Minnesota; and a decrease in school nurses and custodial substitutes in Alaska.

Factor in the unfunded federal and state mandates--to increase student test scores, ensure individual schools' "adequate yearly progress," and improve educator quality and "accountability"--and it's a wonder there's any money left for daily classroom needs.

A beginning-of-the-school-year Christian Science Monitor article bleakly reported that school finances across the nation are the worst in 10 years, causing cutbacks in everything from bands to bus stops. School systems in 44 states "have seen their money cut or held steady," the Monitor reported, "which essentially amounts to a cut when teacher raises are factored in."

This is a coast-to-coast crisis. In an annual state survey released in late August by the bipartisan National Conference of State Legislatures (NCSL), 43 states reported a collective $27.3 billion budget gap in April, which shot up to $35.9 billion by June.

In Fiscal Year 2002, reports NCSL, 29 states implemented targeted or across-the-board budget cuts, while 19 tapped their rainy day funds. And in Fiscal Year 2003, now under way, 11 states have cut K-12 education spending, while another 11 have slashed revenue sharing with local governments.

Worse yet, "this bad news will last awhile, even if the recession ends," says NEA Research economist Ed Hurley. "Negative effects will stay around for at least the next two years."

Some factors behind the longevity of this fiscal pain:

Boom-era fiscal errors. Some states compounded their shortfalls by making optimistic revenue estimates that did not track economic reality. Other states made big pre-recession tax cuts or failed to create tax systems that keep pace with growing personal incomes.

The stock market downturn. "Personal incomes have not fallen dramatically," notes Hurley, "but in most states, revenues have been hurt by a capital gains tax loss--which one could call a capital gains collapse--and the devaluation of stock options." For California, Colorado, and New Jersey, the stock market stumble meant double-digit declines in estimated income tax payments for tax year 2001.
Public employee pension funds, which invest heavily in corporate stocks, also took a hit from the market downturn. "This may force states to increase pension contributions at a time when they can least afford it," Hurley warns.

Structural deficits. Recessions are temporary phenomena, and states are currently dealing with their short-term deficits by raising taxes and cutting spending. But some states will continue to face "structural deficits" year after year because they lack a tax structure that captures enough revenue from economic growth to fund services at current levels. Other states have started down that road by "cutting their income tax in good times rather than saving the money in rainy day accounts," Hurley notes.

Skyrocketing medical costs. Health care cost increases, particularly for prescription drugs, are not only impacting school employee salaries and contracts, they're also making a huge dent in state budgets.
According to the NCSL state survey, funding for Medicaid--the federal/state program providing medical and nursing home care for some 40 million low-income people--has "taken over the top spot for the last two years and will capture the largest percentage of new funding in FY 2003." With 40 states reporting, Medicaid is budgeted to grow 8.2 percent, outpacing K-12 education (4.8 percent), corrections (3.2 percent), and higher ed (1.8 percent).
How do we get out of this fiscal mess? Solutions will involve everything from true health care reform to a stable, balanced, and "elastic" tax system based on an economic development policy that doesn't trade off adequate education funding for new business development (the two work together).
Just like any smart educator's investment portfolio, says Hurley, a balanced state tax system is structured for the highs, lows, and in-betweens of the economic cycle. Such a structure could include an income tax (a big revenue source in good economic times), a property tax (stable even during recessions), and a sales tax that covers a wide variety of services.
In the end, fair taxation and funding adequacy can make a difference in everything from class size to teacher retention and recruitment.

--Dave Winans

For updates on state fiscal health, visit the websites of the National Association of State Budget Officers (www.nasbo. org) and the National Conference of State Legislatures (www.ncsl.org). For more on tax policy and public education funding, go to www.nea.org/neatoday/0203/news18.html. And for more on school funding adequacy, go to www.nea.org/neatoday/0209/news18.html.

Louisiana ESPs Organize, Parish by Parish by Parish

Look in Louisiana's northeastern corner, between Arkansas and the Mississippi River, and you'll find an inspiring ESP organizing story. It began in East Carroll Parish back in 1996 and has since spread to parishes such as Madison and Morehouse.

With assistance from NEA and the Louisiana Association of Educators, ESPs are learning how to press their case for better pay, benefits, and conditions with district decision makers--and learning how to prevail, even without a state bargaining law.

District by district, word is traveling that you can move mountains if you attend school board meetings en masse; make one-to-one contact with superintendents, school board, and finance committee members; and thoughtfully present your case for a living wage.

In the 2001-02 school year, Madison ESPs won a $1,300 raise, added to a $500 state raise. And at the end of September 2002, Morehouse support professionals gained a $900 boost in their salary schedule, on top of the $500 state raise.

Along the way, new activists and organizational habits are emerging. In Morehouse Parish, Bonita Elementary food service technician Gertrude Johnson has become an energetic leader. Like clockwork, she and other support professionals now gather the first Thursday of each month, immediately after the school board meeting.

And thanks to NEA/LAE training, northeastern Louisiana ESPs are sharpening the skills needed in any "bargaining" situation--holding one's temper, staying focused, and concentrating on finer points such as job descriptions, evaluations, and performance.

Like the Mississippi itself, the organizing momentum just flows from one parish to the next, "one piece, one step at a time," reports LAE UniServ Director Eva Dyann Wilson.

"In the process," Wilson says, "education support professionals are coming to realize the power they have, even to meet finance committee members as equals. There's no stopping them!"

--Dave Winans

For more on how ESP organizing started in East Carroll Parish, Louisiana, go to www.nea.org/neatoday/9902/atloclvl.html.

Kudos To
Nebraska Teacher Wins RIF Settlement, Recall Rights

The Nebraska State Education Association has won a settlement and recall rights for rural teacher Pat Sharp, laid off after teaching 26 years in the 50-year-old Bethel Public School. The school was closed last spring because of a lean budget and declining enrollment.
Sharp, an NSEA member for most of her 33-year teaching career, requested a reduction in force hearing before her school board. "I felt I had put 26 years in there, and that was something to consider," she says.
The board agreed to a settlement on the day the hearing was scheduled. Sharp, who was represented by NSEA UniServ and legal staff, received $10,000 and two-year recall rights should the school re-open. Sharp's teaching partner, who is not an Association member, received no assistance.
In a note to NSEA UniServ Director Bill Nowak, Sharp wrote: "When it comes to this sort of situation, I have come to appreciate the backing of NSEA. We are really 'on an island,' and with your support, I have felt rescued."

A couple of years back, Kansas NEA won legislation permitting school districts and community colleges to negotiate entry into the large Kansas State Employee Health Care Plan--plus an agreement with the plan's governing body that gives districts and colleges five years to "ramp up" to the plan's required employer share of premiums. At press time, some 20 of Kansas' 304 K-12 districts had succeeded in entering the state plan, with more on the way.
Before this opportunity arose, "each district--some with only 45 or so employees--had to go on its own to buy insurance," says Craig Grant, KNEA director of legislative action. "Districts could not form a large enough purchasing pool to provide decent rates. That especially hurt education support professionals, who often spend the majority of their salary on health insurance."

After a long fight, the South Plainfield (New Jersey) Education Association has won $721,144 in back pay and prospective step increases, effective September 1, for 22 teachers improperly placed on the salary guide. SPEA's battle--which moved from arbitration to the state appellate court and then back to arbitration--began in 1996 when it learned of six members hired without proper credit for previous teaching experience.
Finding that South Plainfield school board budget surpluses could cover an arbitration award without negatively affecting programs or staffing levels, arbitrator Mattye Gandel ordered placement of all SPEA members on the proper step of the salary guide and back pay awards for eligible current employees and retirees.

Last June, members of the St. Clair County (Alabama) Education Association helped elect a new county superintendent of education, Tom Sanders. SCCEA teacher, ESP, and administrator members joined forces in the 300-strong St. Clair County Political Action Committee for Education, which purchased media spots, made phone contacts, campaigned door-to-door, and spoke to various groups on Sanders' behalf.
"I am very excited that the first candidate endorsed by SCC-PACE won," says local President Kathy Smith. "I would like to encourage other local Associations to form political action committees and become involved in the political process."