Boards have a huge responsibility to be effective, informed advocates at the bargaining table during Oregon’s budget shortfall, since 83 percent of a district budget is spent on labor contracts.

“The major trend in bargaining is to make financial decisions that are sustainable during a recession and our uncertain school funding situation,” said Ron Wilson, OSBA Associate Executive Director. “And, use student learning as the ultimate filter for tough decisions.” 

The biggest trend he sees is a phase-out of Early Retirement Incentives (ERIs) because of insurance cost increases. Districts started ERIs to reduce costs by replacing “higher paid” teachers with new teachers normally hired at lower salaries. The plan backfired. As part of the retirement incentive, districts agreed to pay towards health insurance premiums - and with rising health premiums, and rising retirements among the baby-boom population, this is becoming an unfunded liability.

Wilson noted insurance premiums are expected to increase another 25 percent next year, following a 13.5 percent increase last year and a 19 percent increase the year before.

Here’s more advice for bargaining teams:

• Create alternatives for any part of your contracts impacting budgets, in case the Education Endowment Fund on the May 21 Primary election fails.
• Don’t finalize any major financial agreements such as salary/step increases until the May election.
• Make sure your contracts include a Funding Clause as a financial “safety net.” The clause, triggered by revenue decreases, allows boards to re-negotiate economic portions (salary, insurance, etc.) of labor contracts if there is insufficient revenue to fund the agreement. [Sample Clauses]
• Bargain for insurance caps to control rising health care costs.
• Reducing days is a big cost-cutting remedy this year - but very tricky. Your contract may not allow it.
• Use the Interim Bargaining process to resolve issues.
• Meet early with your unions about layoff and recall procedures. You may find differences in contract interpretation, so iron these out now. Make sure personnel files are updated. Contact Ron Wilson for reduction-in-force strategies. Information is also posted under budget reduction/layoffs.
• When facing tough bargaining decisions, keep these questions in the forefront: “What is the impact on student learning?” and “How does this affect our ability to keep good staff?”