As school boards approach bargaining for contracts that expire in June, they should be aware not only of statewide trends in negotiations but of the ranking of Oregon teacher compensation among all states: Compensation (salary and benefits) for Oregon teachers is high.

According to the National Education Association, the average salary for Oregon teachers was $49,169 in 2003-04. That figure includes a six percent employee contribution to PERS. Oregon’s salary level stood at 105.2 percent of the U.S. average ($46,752) and ranked 14th among states.

Teacher benefits generally incorporate Social Security, workers’ compensation and unemployment insurance, and PERS contributions expressed as a percent of salary. (Employers typically contribute an additional 31.9 percent). Insurance contributions are on top of that.

Surveys have consistently found that benefit contributions for Oregon teachers are among the highest in the nation.

The Oregonian reported that Oregon schools paid an average of $18,300 for health insurance and retirement in 2002-03 – 55 percent more than schools across the nation.

Salary

Districts struggle to provide competitive compensation packages and quality education programs, making salary negotiations more difficult. Salary increases are averaging 2.25 percent, with increases among 129 districts around the state ranging from a high of 15 percent down to zero. Districts are looking at ways to rework schedules and shift away from years of experience to merit-pay systems.

Districts continue to find it difficult to fund salary and insurance increases and pay 16.9 percent for PERS. Unions continue to evaluate salary increases based on net take-home pay after out-of-pocket insurance premium payments. Teachers continue to treat step increases as separate benefits to which they are entitled rather than part of a compensation package. With 158 districts reporting for 2004-05, steps are averaging 4.25 percent around the state.

Unions continue to ask for more salary for employees at the upper limit of the pay schedule. Districts view longevity pay as a stipend or a percentage, e.g., five percent for employees with 15 years’ experience and another five percent for those same employees every fifth year.

Districts should consider the ramifications of including longevity pay in the contract or increasing the longevity pay already granted: The salary schedule no longer has an upper limit.

Premium increases continue to pressure districts, compelling boards to control costs and meet employee demands for minimal out-of-pocket costs. Caps can help control costs. More than 92 percent of school districts and ESDs have some form of cap in their contracts. The average maximum employer contribution in 2004-05 was $743 with the average employee out-of-pocket contribution at $146 a month. The average maximum employer contribution for 2005-06 (94 districts reporting) is $776. The employer contribution average is up $33; the employee average out-of-pocket contribution is $156, an increase of only $10.

Teacher Evaluation

It is often said about bargaining, “A blank page represents total management control, and every sentence added to the contract chips away at that control.” This is not true of teacher evaluation.

Regardless of contract language, districts must comply with state law. Watch out for union proposals for elaborate restrictions on teacher evaluations. Boards do not have to bargain teacher evaluation mechanics – they are “permissive subjects.”

To meet the “just cause” standard in discipline decisions and to take advantage of “merit” in layoff and recall decisions, districts should use teacher/administrator performance evaluations for their intended purpose: accurately reflecting job performance.

School boards should consider whether they will tie portions of teacher evaluations to state benchmark tests.

When districts introduced early-retirement programs as a cost-saving measure, the intent was to provide incentive for highly paid teachers to retire early, allowing districts to hire less-expensive replacements. Such plans consisted of a monthly stipend, an insurance benefit, or a combination of the two. But new teachers often have master’s degrees that place them higher on the pay scale, and the cost of insurance is rapidly outpacing school funding. Rather than saving money, early-retirement-program costs have turned into “800-pound gorillas.”

Boards should concentrate on eliminating these programs – but be aware that unions will continue to push to maintain them. One approach is to replace early retirement with tax-sheltered annuities; other methods include sunsetting eligibility and using cost-control measures such as lowering monthly stipends and placing caps on insurance contributions.

The Employment Relations Board recently decided in Enterprise Education Association v. Enterprise School District that a district could not change retirement benefits for employees already retired through the negotiations process. The district could, however, amend retirement benefits for current employees who had not yet retired or who had given notice of intent to retire. The case is currently under appeal by the Oregon Education Association.

PERS Retirement Rehires

When considering rehiring PERS retirees, boards must look not only to statutory work-hour-per-calendar-year limits (1,040 hours before penalties are assessed) but also collective-bargaining agreements and board policies. Boards need to decide the rights and benefits to grant and consider what they are already paying these employees in early retirement benefits (insurance, stipends, etc.). Other considerations:

• How will employees’ seniority affect their status in layoffs?
• Where will they be placed on the salary schedule?
• Are they members of the bargaining unit?
• What insurance contributions do they receive?
• Could they qualify for early retirement again?

Unions are divided on whether they want these employees in the unit – they want their dues, but they realize the effect such employees have on the new, younger employees.

The No Child Left Behind Act

NCLB may affect some contract terms such as involuntary transfers, layoff, tuition reimbursement and personnel files. If a school fails to meet adequate yearly progress for four consecutive years, the district may be required by law to replace staff. Involuntary-transfer language must allow districts to make such a transfer and maintain staffing to meet the “highly qualified teacher” requirement.

Base contract terms for layoffs on seniority, licensure and competence. Unions will look for language that supports tuition reimbursement to address NCLB’s “highly qualified teacher” and paraprofessional requirements. Unions are proposing more confidentiality for personnel files, yet NCLB and public-records law will allow – if not require – the release of certain information.

An agreement may contain provisions that make it difficult for the district to comply with NCLB, yet NCLB regulations do not exempt schools and districts from compliance.

Some union proposals contain extensive language dedicated to NCLB. Beware of language dealing with paraprofessionals – if they are not in the licensed unit, they should not be referenced in the licensed contract.

Community colleges struggle to afford the economic packages demanded by unions. One trend is hiring more part-time faculty in place of full-time faculty. This allows more flexibility in scheduling classes and saves money through lower health benefit costs.

Population continues to grow in many districts. Some union proposals create weighted-class-size limitations according to grade, subject matter, or both. The proposed remedies for exceeding class-size limitations include hiring new teachers, placing aides and assistants in overcrowded classrooms, and providing overloaded teachers with more salary. 
Keep in mind that class size is excluded from the statutory definition of “employment relations” and is therefore a permissive subject of bargaining.

Unions are drafting proposals requiring districts to at least bargain the impact of class size on workload, safety and compensation. A union may call for a labor-management committee to determine whether class size has created safety concerns in shop classes; because safety and compensation are mandatory subjects, these impacts must be bargained.