PhillyBurbs.com: The ABCs of your schools: Act 1 law making contract talks difficult

PhillyBurbs.com:  The ABCs of your schools: Act 1 law making contract talks difficult

School boards "are using Act 1 to limit salary increases," a state teachers union spokesman said.

The state's property tax relief law, enacted four years ago, is playing an increasing role in contract negotiations between area teachers unions and their respective school boards, officials said.

The law, commonly known as Act 1, is a major reason why nine schools and districts in Bucks and Eastern Montgomery counties are approaching the new school year without labor agreements in place, they said.

Salaries and benefits are the main tie-ups in negotiations in the Centennial, Central Bucks, Hatboro-Horsham, Neshaminy, New Hope-Solebury, Pennridge and Pennsbury school districts, and Bucks County Technical and Upper Bucks Vocational high schools, officials said.

Act 1 limits how much school districts can raise taxes without residents' approval to help pay for the salaries and benefits. Tax percentage increases were about 4 percent when the law went into effect. Since then, the amount a district can raise taxes, known as the index rate, has been decreasing.

The index rate for 2011-12 is expected to be about 1.2 percent, said Dave Davare, director of research services for the Pennsylvania School Boards Association. It is not expected to go back up in the near future, he said.

That, coupled with the fragile economy and the increased contributions that districts will pay to the Public School Employees' Retirement System fund in the next few years, are the main reasons why school boards are calling for little or no salary increases in their contract proposals for teachers unions.

"Districts need to pay attention to what they are spending, not only in terms of the present year outlay but also future year expenses," Davare said.

Not everyone sees it that way. State teachers union leaders say the property tax relief law has become a tool of sorts for school boards.

"Boards are using Act 1 to try to limit salary increases and get local associations to pay more for their health insurance premiums," said Rob Broderick, a spokesman with the Pennsylvania State Education Association.

The state law does not prevent school boards from spending money on collective bargaining agreements, Broderick said. He suggests if school boards want to stay competitive with attracting and retaining quality teachers they "have to make choices" about program and extra-curricular offerings and capital improvements.

School boards also can file for more exceptions from the state to raise taxes above their districts' index rate to cover special education, pension payments and other costs. That would free up existing revenue to help cover salary increases for teachers union members, he said.

"The rate of settlements is coming down," Broderick acknowledged, because of the environment created by Act 1, the economy and the impending pension rate increases. Unions are weighing their options, he said.

"They have to decide what's better, whether it's a new contract or staying with what they have where they are not getting raises but they also are not paying more for health care," Broderick said.

Davare, the research services director at PSBA, a trade group, said he doesn't see the labor stalemates ending any time soon given the increasingly dire circumstances surrounding the contract talks.

School board members are hearing from their constituents across the state, many of them hit hard by the tough economic times, he said. They encourage board members to not give in to the union demands for greater salaries without significant increases to their health care contributions, he said.

"Negotiations are going to be difficult and protracted," Davare said.

August 22, 2010 03:31 AM

from the bcct:
Board takes steps to avoid tax hike
By: GEORGE MATTAR
Bucks County Courier Times
The Morrisville school board enthusiastically passed the Act 1 Resolution Wednesday, which will keep any tax increase below the 3.4 percent district index for the 2010-11 budget.

The vote was unanimous and most members gave a resounding "yes" when asked to vote. Board President William R. Hellmann said "absolutely" when voting yes.

The board and administration are working to keep taxes low, but is facing a $1.1 million shortfall for next year's budget, said Morrisville Superintendent Elizabeth Hammond Yonson.

By passing the resolution, the board is committed to and can no longer fall back on applying for exceptions to raise the tax any higher than 3.4 percent.

Right now, the budget is $18.4 million and the average tax bill is $3,191.

Last week, district business administrator Paul DeAngelo said, "We're going back to the drawing board. We're going to look at the budget line by line."

He told the board at a preliminary budget meeting that Morrisville schools will consider a number of ways to balance the budget, including an expected $100,000 credit from Intermediate Unit No. 22, as well as trying to reduce energy costs and efficiencies in special education facilities.


DeAngelo also said there are several factors contributing to the deficit, including 8.56 percent higher premiums for health care, a projected increase in the employees' retirement system, a $255,000 increase for the Bucks County Technical High School budget and decreases in local, state and federal revenues.

Additionally, teacher salaries and benefits are expected to increase about 3.5 percent.

Hellmann read a portion in an editorial from Thursday's newspaper that called for cutbacks in school districts' budgets.

"It says schools should do more to cut costs," he said. "We do need to cut costs. I agree with that."

In other business, resident Ann Perry asked the board about what she called "a persistent rumor" that some of the district's three music teachers would be laid off.

Yonson said she has no idea where Perry got that information and said nothing has been discussed regarding any such cuts.

After the meeting, Perry would not elaborate, but said she has heard it talked about throughout Morrisville.