Salary costing can help you see the whole picture
July 14, 2009
“Show me the money,” the saying from the movie “Jerry Maguire,” could be a workers’ chant during collective bargaining. Unions want boards to pay higher wages and all insurance costs, which can detour the collective bargaining process from clarity into confusion.
Collective bargaining is the process by which the district and union negotiate to secure an agreement on such matters as salary, insurance and other conditions of employment. Salary and insurance (and sometimes the early retirement incentive) tend to be the most difficult items to negotiate. When schools have outspent revenue for several years and experienced a leveling off or even a decline in enrollment, negotiating salary and insurance can be challenging.
It’s important for a board to cost all proposals to accurately calculate the financial liability to the district. To see how a salary costing model can help you in your negotiations, check out the demonstration of OSBA’s salary costing model.
How often have you been at the table, estimated the cost of a one percent increase and then done the math in your head, doubling the one percent to arrive at the cost of a two percent increase? That’s not accurate math!
By costing each proposal, a board can determine its actual increased financial liability. Any percentage increase in a base year will exponentially increase already-agreed-to costs of future salary years. Costing your proposal will show you clearly the added costs throughout each year evaluated.
Wages and benefits comprise 75-85 percent of the annual district budget. By costing the proposals, a district can see accurately where the money is being spent. As insurance percentages or caps increase, money to meet those obligations must come from elsewhere in the budget. When wages are bargained, items such as FICA, pension, and workers’ compensation are affected. As costs increase, other line items are affected: Fees for programs can increase, class offerings may be reduced, and repairs not made. Layoffs are another way districts respond to diminishing revenue. Fewer teachers means larger classes.
Viewing accurately projected proposal costs is vital to preparing for and possibly preventing hardships.
Oregon law prohibits boards from bargaining in bad faith by reducing the overall value of proposals from one negotiation to the next. Costing each proposal ensures that boards comply with the obligation to bargain in good faith. The district can draft a variety of proposals, knowing that each package fulfills the district obligation to bargain in good faith.
Finally, seeing actual costs of proposals on standardized worksheets builds union confidence in management projections. Asserting that one percent will cost your district $50,000 is one thing; it is another for the union to see it clearly demonstrated with a breakdown of the various costs associated with salary and insurance increases.
The next time the union cries “Show me the money,” you’ll be able to say “great idea” and work together to explore salary and benefit costs using our salary costing model.