Questions the School Board Won't Answer

Bill Call · Post by **Bill Call** » Fri Mar 02, 2007 7:49 am

I sent this to the Lakewood Schools. I haven't received an answer yet. Does anyone out there have the answers?

From: Bill Call
Sent: Tuesday, February 13, 2007 7:33 AM
To: 'asklakewoodschools@lakewood.k12.oh.us'
Subject: Pensions and Health Insurance

To Whom It May Concern:

I have heard that the District pays the employee portion of the pension contribution. If that is so how much does that cost the district each year in total for all employees?

What is the total dollar amount spent by the district on health insurance premiums? What is the total dollar amount of the premium paid by the employees? What are the co-pays and deductibles for those health plans?

It has been reported that the Lakewood School district expects to get about 47 million dollars from the State to offset the new school construction costs. Is that 47 million absolutely guaranteed to be paid by the State? Is there any chance at all that future changes by the State would change that dollar amount to a lesser figure? Is it guaranteed by contract or statute? How will the 47 million be paid to the District?

You can email your response to me.

Joe McClain · Post by **Joe McClain** » Sun Mar 04, 2007 3:05 pm

Bill,

Some of the information you request may be available by filing a request under the Ohio Freedom of Information Act. Generally FOIA says a government entity has to provide certain records on request--but it is not compelled to interpret those records.
For instance, you want to know if the district picks up the "employee portion of the pension contribution." If the district is paying these contributions, reason would dictate that there probably would not be any records of "employee portion," because if employees don't have to make a contribution, such records are not necessary. My point is, your question probably requires a certain amount of interpretation, which the schools are not required to do, according to my understanding.
So you have to be very precise in what you ask, even though your request seems pretty straightforward. Also, the difference is sometimes pretty slim between the information that is available under FOIA and information that is absolutely protected from release (under other laws). There's even some overlap, areas in which FOIA says yes, yes; and privacy laws say no, no. Employee records are one of these areas.

I work with a FOIA officer and have picked up a thing or two, although I'm not an expert, by any means. Ohio FOI laws may be substantially different from the ones down here.

DougHuntingdon · Post by **DougHuntingdon** » Sun Mar 04, 2007 3:07 pm

Bill
Could you just ask for a copy of the union contract? just a thought as I am not an expert on this type of thing

Doug

Bill Call · Post by **Bill Call** » Mon Mar 05, 2007 9:02 am

Thanks to both of you.

I may contact each individual board member for the information at a later date. I'll give the district a chance to respond to a third request.

In the mean time, I think I found out why they don't want to provide the information.

The district will spend $72,000,000 dollars over the next five years on pension benefits. If the district is paying for the employee portion of the pension that means over the next 5 years the district will spend $29,000,000 to pay the employee portion of the pension benefit.

Of course, if we don't sign on to a new operating levy the only thing the Board can think to do is to close schools and stop buying books.

Jeff Endress · Post by **Jeff Endress** » Mon Mar 05, 2007 9:21 am

Bill

I had an interesting conversation with an attorney friend who represents school boards. Very boutique practice.

I asked him about the idea of the board paying the employee's share of the pension contribution. He told me that it's really not that uncommon and is a means of leveraging a tax benefit. Apparently it can be structured so that the contribution by the board is not taxable to the employees, whereas an employee's contribution would be "after tax". By structuring it this way, the board can provide a greater benefit with less money.

Jeff

Bill Call · Post by **Bill Call** » Mon Mar 05, 2007 10:12 am

Jeff Endress wrote: By structuring it this way, the board can provide a greater benefit with less money.

Jeff

The teacher saves a substantial amount on taxes and saves a substantial amount by not paying the teacher's portion the pension contribution.
The schools save nothing.
For example:

Salary $90,000
Income tax on $90,000 - $22,500
Teacher pays 10% for pension - $9,000

Take home pay - $58,500

Salary $90,000
Schools pay $9,000 in pension cost - actual salary $99,000

Income not taxed - $9,000
Tax savings - $2,250

Income tax on $90,000 - $22,500

Teacher pay $0 for pension -

Take home pay - $67,500

Teachers total tax and pension savings $11,250.

I suppose it would be like telling your boss " You pay my portion of Social Security and all of my 401(k) contributions and let me keep my current salary plus give me annual cost of living raises and step raises and contract raises but don't worry, you are really saving money!"

Beam me up Scotty!!

I think it is very fair to ask that school board employees pay the employee portion of the pension cost and a reasonable percentage of the health care premium before they ask for more money.

The school board disagrees.

Jeff Endress · Post by **Jeff Endress** » Mon Mar 05, 2007 11:03 am

Bill

I look at this differently. While you view the pension payment as ADDITIONAL compensation, I believe if you view it as part of the entire package, you end up with a different result, and more of an apples to apples comparison:

I could be wrong, but it could weel look like this:

Total teacher salary/benefit cost: 90,000

scenario I (teacher pays their own contribution):

Salary $90,000
Income tax on $90,000 - $22,500
Teacher pays 10% for pension - $9,000
Take home pay - $58,500

Scenario II (Board pays contribution)
Salary $81,000
Income tax - $20,250
Teacher pays - 0 for pension
Take home pay - $60,750

Net increae to teacher $2250.00

Net cost to board $00.00

Jeff

Dee Martinez · Post by **Dee Martinez** » Mon Mar 05, 2007 4:49 pm

Mr.Call:
The issue of teacher and public employee benefits can be debated sincerely and intelligently, but I must question your good faith when you use a number like $90,000 as a benchmark for a teachers salary.

Surely if you have done your homework you know that the starting teachers salary in Lakewood is slightly over a third of that figure and that the average salary of all teachers is less than 2/3 of the number you site.
The discussion is legitimate IMO but it has to be based in fact and not on emotion.

Lynn Farris · Post by **Lynn Farris** » Mon Mar 05, 2007 6:08 pm

When I researched this with Lakewood Taxpayers for Responsible Schools, many years ago, we found that not only teachers were getting this benefit - so were administrators. This is common with top end administrators - but it is not common with business administrators - who in Lakewood at the time I did the research were recieving it. At that time there were only a few school systems that did this.

Teachers and administrators do not pay Social Security or FICA, they pay STRS. STRS is a larger program. In the real world, FICA/medicare is 15% of the employee's salary up to a maximum level. The employer pays 7.5% and the employee pays 7.5% in this system. The STRS system I believe is 24% a much bigger chunk. In our system in Lakewood, the employee pays 0 and the employer pays 24%.. Please correct me if I am wrong - but I think the contribution is 24% and I did not see a cap.

Now, Jeff, I understand your scenerio, where if we pay our teachers/business administrators less than other school systems do, to offset the increase in the payments there is a wash. However everytime we give the teachers a $1.00 increase, we are actually increasing our costs significantly more - because this is a percentage of the salary.

What I found objectionable was the fact when this was instituted, the public was being told that we aren't giving any increase in salary - at the same time giving a huge benefit. Of course this was many years ago and may not have occurred under the watch of the current school board (or at least some of them).

Let's face it - teachers are very well paid. I know few other professions in NE Ohio that are making this kind of money and recieving these kinds of benefits.

But comparing apples and apples, I would ask:

1) How many school systems in Cuyahoga County are picking up the teacher's STRS portion?

2) How many school systems in Cuyahoga County are picking up the business administrator's STRS portion?

3) How do our teacher's salaries compare with other teachers who have their STRS picked up? and with teachers that do not.

4) How do our business administrator's salaries compare with other business administrators who have their STRS picked up? and with business administrators that do not?

I agree with you Jeff, that this is all now part of the contract, but the contracts are renegotiated at certain intervals. I would make whatever adjustment is needed to pull out the Employer's pick up of the Employees STRS contribution as it tends to magnify any increase that is given to the employees. It tends to distort the picture and opens the system up to attack - as the average person is well aware that they pay into FICA and are really surprised that people in this program don't have any FICA payment - it does seem unfair.

JMHO