LAKOTA TAX INCREASE of 2011: If the superintendent wants to be paid like a CEO, act like one

On July 12th of 2011 Michael D. Clark covered the Lakota School Board meeting for the Cincinnati Enquirer about the inevitable tax increase the school district is planning to impose on the tax payers. Here is what he reported:

Voters, who in November 2010 rejected a 7.9-mill school levy, will see the 4.75-mill, continuing operating levy on the Nov. 8 ballot once the board conducts another, state-mandated vote next month.

If voters in the Lakota School System approve the 4.75-mill property tax hike, it will cost the owner of a $100,000 home $145 more in annual school taxes. That will of course be $290 per year on a $200,000 dollar home.

“The schools are the community’s schools, and it will be up to the community whether we continue to move forward or slide backward,” said Lakota Board of Education President Joan Powell.

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Here is the problem with what Joan said in that statement. Lakota has no choice but to continue to be a good school. Speaking for myself, I pay thousands of dollars a year into the school system, and I expect nothing less than an excellent district. Going backward as Joan suggests is not an option. Excellence and quality is required. It is completely expected by me as a tax payer. In other words, I am not spending a lot of money in taxes to get a crappy school system.

However, the school board is citing that a loss of state and federal revenue dictates that the district must go to the voters for more money, and if Lakota wants to maintain a great school, then the property owners of Lakota must pay the difference.

But that’s not what’s going on.

The reality goes back to an October evening in 2008 when hundreds of teachers packed the Lakota School Board Meeting with black shirts showing unity and demanding a 3% increase in pay or they were walking off the job. They were going to strike! You can see the news cast of that video here. You have to click on the link because Channel 5 has disabled the code. It is the events in that video which has caused our current financial crises at Lakota just 3 short years later.

http://www.youtube.com/watch?v=1kvPQPJ_F1A

Here’s another link, again this one will take you away from this page, but it’s worth the look.  Listen to Kit Andrews report that Lakota’s per pupil amount was just over $8,000 per child.  Now it’s almost $10,000 per child in just three years.  How long does anybody think this can go on?  What’s the plan to reduce the per pupil cost because that costs is almost completely driven off the labor cost of the employees, not brick and mortar costs?

http://eplayer.clipsyndicate.com/cs_api/iframe?windows=1&va_id=726521&show_title=0&wpid=0

To demonstrate just how quickly Lakota salaries went up after the strike attempt of 2008 the No Lakota Levy group has assembled the spreadsheet below.

Now, what does all that information mean? Well…..the average teacher’s salaries by school from the time of the strike threat in 2008 to the present look like this. The year of the strike the average teacher salary was $56,633. Just two years later the average salary was $62,331. The spreadsheet above shows the average rate of pay per school and the amount of increase at those schools. In essence, there was a 10.1% increase in the cost of an employee at Lakota right after the strike.

2007-2008 $56,633
2008-2009 $59,041
2009-2010 $62,331

Lakota currently has over 600 employees who make over $65,000 per year which ties up over $47 million dollars in budget costs. CLICK HERE TO SEE WHO AND WHAT LAKOTA STAFF MADE IN 2010-2011.

The way to fix the budget at Lakota is simple. It must be decided to not have as many employees making such large sums of money, because asking the district to carry that many highly paid employees in a district simply destroys any attempt a district of any kind has of balancing its budget.

To provide an idea just how quickly these costs can migrate out of control in 2009-2010 Lakota started the year at 59K per year and ended at 62K per year. During that year the district carried 434 employees who were paid over 65K per year. However, just one year later, that number jumped to 625 employees who made over $65,000 per year. I’m sure some of those people retired, or moved on to new jobs, but they still showed up on the payroll for that fiscal year and must be counted. The amount of increase in payroll demands from one year to the next, just one year, was $15,647,689.00. (The source for that information comes straight from the Pulse Journal wages edition published each March. Add the numbers up and that’s what you get) It is that number which causes the need for school levies.

Now recently the teachers union came up with a 3 year agreement so they could avoid the effects of Senate Bill 5, which was signed by Governor Kasich early in 2011, which puts a stop to the out of control “step increases” which has caused much of the trouble, because under a step plan, even though the teachers agreed to a “wage freeze” in August of 2009, they still received a wage increase under the “Step” plan which is why the salaries of the teachers went up so much over the course of one year. The teachers union at Lakota and other unions who have negotiated similar contracts plan to get S.B.5 repealed before their current contract expires, thus allowing them to resume back to their normal spending addictions, such as in 2008.

Having teachers making 65K or more is not a big deal if they only consists of the top quarter of your workforce, and in a district like Lakota which employs over 2000 staffing positions for more than 18,000 students the costs can get out of line quickly if not watched carefully.

Lakota has managed to bring their budget under the $160 million mark consistently on their 5 year forecast, but if it doesn’t balance the budget, then it’s not enough.

Tax rates at Lakota are already too high. There are too many homes going into foreclosure and higher taxes just aren’t attractive to potential home buyers. So the task at Lakota is to maintain its excellent rating, while also bringing down their costs and providing some relief to the tax payers, not more burden. If the loss of state and federal revenue forces the budget under $120 million a year, then that means the administration at Lakota needs to tackle their expensive costs, the amount of employees they have that are exceptionally well paid, to balance the budget. If that means letting those positions move someplace else so they can make more money and replacing them with cheaper labor…….fine. That’s the way the process works. Over paying employees is not good business, and does not make a district great. It makes fools of the management to even entertain such thoughts.

But statements that Lakota will be going backwards if we don’t pay more taxes are eerily similar to the kind of nonsense Lakota went through in 2008 when the labor threatened to strike, and got their pay raised as a reward, which the cost was passed down to each and every member of the community. If we are going to have to pay our new Superintendent Mrs. Mantia $165,000 a year, and the school board will justify that cost by stating that she is operating like a CEO of a company, well then we’ll expect her to drive down the costs in the same manner as a CEO does for their shareholders. I expect Mrs. Mantia to maintain Lakota’s excellent rating and current quality while driving down the labor costs to balance the budget. If she must let go of some of the expensive labor in favor of less expensive labor, then she must do that. But raising taxes is not an option. Any fool can do that. I could put my dog in charge of the school district and he could wag his tail to proclaim taxes need to be increased to meet a budget.

In the end, the Lakota Administration has not had the heart to do the right thing. They were outsmarted when it came to the labor dispute of 2008 and they are seeking to hide their shame with tax increases. The revenue produced by the community is more than sufficient to run an “excellent” school, but it is not sufficient to pay employees 20% to 30% more than the average income of the taxpayers themselves. The math just doesn’t add up.

Tax increases are an irresponsible measure by minds that lack the wisdom to see where they have made an error. And the greatest error is in pretending that more money will somehow fix the debacle. Lakota needs a long term plan for dealing with “declining revenues” because that is the fact of our age. People will be making less, properties will be worth less, there will be less coming from government and the bubble of tremendous benefits for public workers is at an end. And during this transition Lakota has an obligation to the millions of dollars our community produces to have a great school to maintain that service. Because failure is not an option! Lakota will not go backwards, and it cannot raise taxes. It must do the hard things that balance the current budget, or step aside so people who know what they’re doing can do it for them.

Rich Hoffman
https://overmanwarrior.wordpress.com/2010/12/04/ten-rules-to-live-by/
http://twitter.com/#!/overmanwarrior
www.overmanwarrior.com