A long-running interest of EphBlog has been the financing problems facing local schools, especially Mount Greylock Regional High School (MGRHS). Classic posts here, here and here.

The short version of this history is that the College gave $250,000 to MGRHS to help with a temporary financing crunch. The town voted increased taxes to help out one year, but then failed to do so again last year, despite the hard work of Professor Sam Crane. (Note that my prediction that the College would pony up more money was wrong.)

Anyway, the latest update in this saga is a report by several Williams faculty and staff about the future trends in school finances. The report is excellent! Kudos to Dick De Veaux, Cappy Hill, Sue Hogan, Keith Finan and Jim Kolesar. I am glad to see Williams faculty and staff so involved in the well-being of the local community. The report concludes:

In the final analysis, to project balanced budgets for the school into the medium-range future will require dramatic steps by the school’s policy makers and communities to increase revenues, decrease expenses, or somehow combine the two. None of the ideas generally floated in public discussions would by itself balance the budget for very long.

Alas, I haven’t had time to go throw the entire report, but it seems well-done, thorough and depressing. Unless something is done, the school finance gap is doomed to get much larger. The school’s expenses are simply out-of-whack with its revenue under any reasonable forecast.

Fortunately, EphBlog is here to help! The central problem with MGRHS is that expenses are too high. Want to cut expenses in a service business? Cut salaries and benefits. Problem solved.

Now, our more sensitive readers may be shocked by this suggestion. How can we balance the budget on the backs of our no-doubt underpaid and overworked teachers? Yet, before the tears well up in your eyes, please guess (without looking at the report!) what the average teacher salary is at MGRHS. (Note that the school budget crisis has been going on for several years and lots of smart, dedicated people like Professor Ralph Bradburd have done everything they can to reduce costs while maintaining educational quality.)

Got your guess?


I bet you guessed too low. The correct figure is more than $56,000. And that’s cash salary! Benefits come it at another $12,000.

Now it isn’t for me to say whether, in some Platonic ideal universe, high school teachers should be paid $25,000 or $56,000 or $500,000 for 9 months worth of work, although you can bet that this is not what Diana Davis ’07 would be paid if she started teaching at, say, Exeter, in two years.

But, to the extent that the set of “ideas generally floated in public discussions” is so pathetically restricted as not to include a straight-forward review of expenses, I am here to do some floating. It also seems clear that a majority of the voters in Williamstown think that there might be more than a little fat in the school’s budget.

For me, the biggest mystery is the role, if any, of the teacher’s union at MGRHS. I have looked for information on this in the past and found nothing. Does anyone have good pointers? In the meantime, consider these questions and idle speculation.

1) Is there a teacher’s union at MGRHS? What is its relationship with the school/town? What are the terms of its current contract? When is the contract due to be renegotiated? As best as I can tell, this information is not publicly available to voters. If I were such a voter, I would be very suspicious. Sweetheart deals are not uncommon in situations with little public oversight. If you were a member of the school board and you had friends/family who were teachers, would you try that hard in negotiating salary and benefits?

2) Is teacher firing done by merit or seniority? I suspect it is the latter. In other words, when the school had to lay off some teachers, it did not pick the worst teachers. In fact, it might very well have recently laid off the very best 2 or 3 teachers in the school. Does that seem like the best way to educate the students of Williamstown?

3) Are teacher salaries set by merit or seniority? Again, I suspect the latter. There are no doubt teachers at MGRHS that are worth $56,000 per year — where “worth” is defined by the market opportunity that they have to teach elsewhere. But there are also probably teachers making more than $56,000 who are actually lousy teachers, who could not get a job elsewhere. Their pay should be cut.

4) Also ripe for the chopping block is the $700,000 in retiree
benefits (rising to over $1 million in 2008). Why are benefits for retirees a part of the current school budget? For the most part, these sort of excessive retiree benefits (not clear if this is health care or pensions or both) are a result of town negotiators from prior years giving up these future benefits because, hey, 10 years down the road is someone else’s problem. The school may be obligated to pay these, but it could certainly stop adding to its future liabilities. Again, voters need more details.

5) How much money does it take to run a high school? With around 750 students and a budget of $9.4 million, MGRHS is currently spending more than $12,000 per student. That’s not enough?

Now, I clearly lack the information to make concrete suggestions at to what the school board should do, but who can argue that the voters of Williamstown are any better off? There are certain many complexities having to do with state aid, special education mandates and the like. But, I certainly wouldn’t vote for higher taxes until I was sure that my current taxes were being well-spent.

The Eagle article (no link available) summarized the presentation made to the school board last winter as follows:

An analysis of Mount Greylock Regional High School’s projected finances conducted by a group of Williams College administrators finds that over the next several years, the school’s revenues will increase about 2 percent, while costs will grow by 4 percent each year.

The projections present a distinct set of challenges for Williamstown and Lanesboro parents and voters as the district begins its fiscal 2006 budget process, and as estimates of potential measures to fill the gap come up short.

The Williams group volunteered its services to help the district articulate the problems it faces; it will not make any recommendations on what course policymakers and residents should choose. The presentation was made last night in the Greylock library, with about 50 people in attendance.

“No one said it would be fun, but it’s a useful place to start,” joked Williams spokesman James Kolesar, who was part of the group that made the projection and gave the presentation.

The projections are based on a number of assumptions, including that local appropriations would grow at 2.5 percent per year, that state aid would remain flat, that the school would lose six students a year to the Berkshire Arts & Technology Charter School, and that other revenue sources such as user fees and fund raising would remain at current levels.

Assumptions about expenses include that salaries would increase 2 percent per year, that benefits would grow 10 percent for current employees and 12.5 percent for retirees, and that costs for transportation and for buildings and grounds would increase 3 percent each year.

The results could vary — state aid levels have actually fallen in recent years, and the funding formula for charter schools continues to change — but the estimate is that income would grow only by 2 percent and by 4 percent.

For the 2005-06 school year, that would amount to a $326,000 deficit, which would grow by 2009-10 to a $1.8 million shortfall.

“In the final analysis, to project balanced budgets for the school into the medium-range future will require dramatic steps by the school’s policymakers and communities to increase revenues, decrease expenses, or somehow combine the two,” the group wrote in a summary of their findings. “None of the ideas generally floated in public discussions would by itself balance the budget for very long.”

Reducing the district’s share of the employees’ health insurance co-pay would free $57,500 for each 5 percentage points cut. The school district currently pays 90 percent of the premium.

The group also found that reducing all extracurricular activities would only save $45,000, as the activities are able to recoup much of their costs through gate receipts and user fees, and are a target for fund-raising efforts.

On the revenue side, the group reports that increases in the towns’ tax bases would have little effect. If the town tax base recorded $5 million in new growth, they said, a tax increase of $70,000 would result. If that were split evenly among the major budget centers in town, Greylock’s increase would amount to only $23,000.

The Transcipt, reported:

Mount Greylock Regional High School faces a possible $326,000 deficit next year and — if nothing changes — that deficit could grow to $1.8 million by 2009, a report estimates.

On Tuesday night, Williams College officials presented their long-range financial projections for the high school. Their best-guess estimates — calculated with the same modeling tool used at the college — point to the high school’s income increasing by less than 2 percent with expenses growing by more than 4 percent each year.

Not included in the school’s future expenses, however, were the costs of resolving the school’s water problem, renovating the building, or staying current with technology to include computers and other educational enhancements.

According to Williams spokes-man James G. Kolesar, who provided the information to about 50 parents, school committee members, and school and town officials, Mount Greylock’s budget experienced two major hits over the past three years: A $550,000 reduction in state aid and an increase in mandated special education expenses of $664,000. The school also saw a significant increase in health insurance costs.

Part of the budget gap was closed with about $500,000 from a tax override in Williamstown, a one-time $250,000 gift from Williams, with the rest of the money coming from a reduction in staff and programs, charging fees for extracurricular activities and expanded fund raising.

Included with the assumed expenses are an annual 2 percent increase in salaries, benefit costs to increase by 10 percent each year for current employees and 12.5 percent for those who have retired; transportation and building and grounds cost increases of 3 percent each year, and capital improvements at $61,000 in each of the next two years and $150,000 each year thereafter.

A significant portion of the budget is dedicated to provide for special education students passing through the system. This year’s cost is estimated to be nearly $1.4 million.

Additionally, the annual growth rate of the mandated cost to educate special education students is expected to grow by more than 24 percent each year. Kolesar said that these students could spend more than six years at Mount Greylock as the school is required to serve them until age 22, if needed.

Kolesar said several significant sources of revenue or decreases in spending would be necessary to solve the problem, adding that none of the ideas generating in public discussions would, by themselves, balance the budget for long.

Although cutting the administration could free up a total of $194,000 next year, that may not be legally possible as a certain amount of administrative staff is required by the state.

Nearly 74 percent of the budget goes toward teachers’ salaries, with the average regular education teacher earning just more than $56,000 per year, not including stipends such as for coaching.

Considering the cost of health insurance benefits, letting one regular teacher go would free about $70,000 next year, but because the newer teachers would likely be the ones let go, that cost per teacher would be reduced.

Therefore, if reducing the number of teachers next year were the only step taken, there would be 4.7 fewer teachers. The average class size then would increase from 21.5 to 23.9. By 2009-10, there would be 16.4 fewer teachers and class sizes would average 36.1.

Increases in state aid, fund raising and town assessments, he said, would have to equal the projected deficits and then grow by 4 percent each year.

One override is not the answer, as it would not solve the budget gap in perpetuity. However, it might solve the problem for “quite a while.”

More likely, periodic overrides — along with other revenues or ways to drive down costs — would be needed to balance the budget. One person in the audience remarked that residents likely would experience increased property taxes, and asked if there were any estimates with regard to future costs per $1,000. Those estimates have yet to be made, but may be examined soon, Kolesar said.

For every 5 percent the district reduced its portion of health insurance, $57,500 would be realized. Currently, the district pays for 90 percent of that cost.

Eliminating all extracurricular activities, including sports, only would save $45,000 because athletic events bring in money, and due to user fees.

A dramatic amount of economic development would be necessary to make a difference, said Kolesar. Every $5 million would generate about $70,000, but that would be divided between the high school, the elementary school and town government.

Despite the grim news, the audience applauded those responsible for the financial model for their efforts following the hour-long presentation.

Prior to the presentation, when asked if Williams College might be called upon for financial assistance, Kolesar said he could not say, but pointed out, “The community needs to have some serious discussions about the long-term finances of the school, and we’re part of that community.”

Again, congratulations to the report’s authors on a job well done. The more that Williams faculty and staff interact with the local community, the better. Indeed, I think that looking at this problem more closely would make for an great senior thesis, perhaps under the direction of Professors Hill and De Veaux.

Facebooktwitter
Print  •  Email