State budget cuts teacher pay restrictions
Wisconsin school districts are trying to balance on what's left of the so-called three-legged stool of school finance after Gov. Jim Doyle inked a budget Monday that kicked out the leg used to settle teacher contracts and restrict teacher pay.
Doyle signed the 2009-11 state budget June 29, which repeals the qualified economic offer (QEO) July 1.
The QEO allowed districts to avoid arbitration if they offered teacher wage and benefit package increases up to 3.8 percent each year.
The QEO, with revenue limits and state funding, have together made up the three components of school funding for the past 16 years. With the QEO gone and state funding giving way, the future is shaky.
"One piece of the structure has been eliminated, and without eliminating all of them, it puts us in a precarious situation," said Lake Country School District Superintendent Mark Lichte.
Critics of the QEO elimination worry the repeal will contribute to districts' increasing financial woes and cause cuts and teacher layoffs as well as inflate property taxes. Without the QEO, teacher salaries could increase, but the districts must still operate within revenue limits.
John Ashley, the executive director for the Wisconsin Association of School Boards, sent a letter to Doyle on Saturday, June 27, urging him to veto the bill that would repeal the QEO.
Ashley wrote that school boards must remain equipped with tools to manage the gap between cost increases and revenue increases, and the qualified economic offer is an important tool to do so.
In the past, the Kettle Moraine School Board wrote letters to Joint Finance Committee members urging it to remove a number of policy items, including the repeal of the QEO, from the state's budget proposal. Board members requested that, instead, those items be taken up only as part of a comprehensive school financing package that aligns expenditures and revenues.
Teachers unions, on the other hand, are breathing a sigh of relief as they're finally out from under pay restrictions, in place since the early 1990s.
The repeal of the QEO will not affect the Hamilton School District in the near future. Two-year contract settlements were completed several months ago and were below the QEO, said Hamilton Superintendent Kathleen Cooke.
In addition to the QEO repeal, the state budget cut state school aid, reduced per pupil revenue limits and changed the rules of arbitration for school districts.
The Hamilton School District anticipated state budget issues and readied three different budget scenarios in preparation.
"We actually were prepared for this," Cooke said.
The district expects to make about another $300,000 in reductions in addition to the $1 million the district has already made, Cooke said. The district will not lay off any staff, but if reductions continue in the future, there will be layoffs, she said.
The state budget says arbitrators no longer have to give greatest weight to a district's revenue limits and local economic conditions when deciding compensation disputes.
"It makes no fiscal sense," said Lichte. There are no limits on an arbitrator's decision, but school districts cannot raise the revenue limit, Lichte said.
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