When I began as a brand-new school business manager for a small rural district, I had a vague idea of being expected to crunch numbers during negotiations. Instead, fresh on the heels of a legislative overhaul of K–12 funding in Washington State, I found myself as one of the lead bargainers, attempting to refute the financial analysis presented by the state teachers’ union.
Bargaining in reaction to outdated and sometimes misleading information is extremely uncomfortable. The experience left its mark and underscored the importance of communicating our district’s “story” to all stakeholders well before any negotiation sessions. That means presenting beyond “where are we now” to “where we expect to be” in a year, two years, and five years down the road based on current trends. It means not only using analytics but also finding a way to make their interpretation easily accessible to everyone.
Ask any school business manager in the country where their budget story begins, and the almost-unanimous answer is “enrollment.” With few exceptions, enrollment is the driver for public school funding.
During bargaining, you must have a firm grasp of the revenue you are expecting before committing to any of the asks on the table. Is your enrollment climbing or declining, or has it plateaued? Are you expecting to rebound quickly from the COVID-19 pandemic enrollment drops, or do your data show a slower recovery? What do the answers mean for your state funding and local levy collections?
Although much has been made of the enrollment declines during the pandemic and the need for states to continue to provide budgeted funding amounts, school officials are also coming to grips with the prospect of losing millions in local levy collections. How then does this translate into revenue projections?
Make sure your stakeholders (school board, superintendent, and community — which includes your bargaining unit members) have ample opportunity to review the effect of enrollment on the sustainability of bargained agreements. As a side note, every ask during bargaining has an attached cost, even if it doesn’t appear so on the surface. Those costs add up in a hurry!
Coupled with your revenue projections are your fund balance trends. At the end of 2020–2021, many districts were sitting on seemingly healthy balances because of the savings in supplies and operational costs afforded by remote learning. Those balances may be deceptive! Analytics are critical in looking ahead to see where you expect to be throughout the bargained agreement.
The Ins and Outs of Bargaining
Although Dieringer School District showed a fund balance of just under 20% at the end of the past fiscal year, that’s not a complete picture. Every projection scenario we created reflects a dip into the negative by the end of the 2023–2024 fiscal year, unless staffing is adjusted. That is even without any additional bargained compensation.
Based on this knowledge, the question then becomes how the requested compensation increases will further affect the district’s ability to maintain staffing levels. It’s important to be prepared to show that information early and often (see Figure 1).
Figure 1. Amount and Percent of General Fund Expenditures
Once at the bargaining table, the next hurdle to clear is the selection of comparable districts. More often than not, bargaining groups will look to their neighbors as comps; however, that may not necessarily be advantageous if, like us, your neighbors are 10 times your size and sitting on a significantly larger tax base.
Taking the time to find peer districts with enrollment stories similar to yours concerning income, English language learners, and total enrollment will help you frame your response to questions of spending and staffing trends (see Figure 2). You may find you need a different peer group for compensation questions than for administrative spending. Although you may show a highly inflated percentage of spending for total administration compared with larger districts, the analytics may show that you are right in line with like sized districts.
Figure 2. Demographics of Peer Districts
Peer groups may also present the opportunity to explain your outlier spending trends. Our district far outspends our peers in special education programs because our board has made special education a budget priority, and we employ far more paraeducators than districts of similar size. Because our teachers have come to rely on that instructional support, the board is more willing to negotiate with an eye toward leaving enough budget capacity to maintain that staffing.
Before bringing it to the table, know what your data say about your spending patterns compared with your peers (see Figures 3 and 4).
Figure 3. Administration as a Percentage of Total General Fund Expense
Figure 4. Special Education as a Percent of Total General Fund Expense
The onset of the pandemic and the associated staff concerns over health and safety measures have brought working conditions to the forefront of bargaining. Although class size has always been a hot button, it’s never before been accompanied by outright fear that students are sitting too close to one another or to their teacher. Trend data can be used to counter both the argument that your district has the biggest class sizes and that there are too many students in a classroom.
Looking at our teaching staffing ratio, we find that we are absolutely in line with our peers. When total staffing is brought into the picture, an even starker contrast is painted between what the state funds and how the district has prioritized small class sizes during the pandemic. Districts that are being asked to use available dollars from the Elementary and Secondary School Emergency Relief Fund to reduce class sizes or to compensate teachers for larger classes will find this analysis particularly helpful (see Figure 5).
Figure 5. Teacher Staffing Ratio Comparison
Inevitably, the negotiations will turn to the topics of compensation and retention, the meat and potatoes of any negotiation. Some critical pieces of data will be your average staff experience (as this usually translates into higher placement on a salary schedule), your average salary, per pupil spending on instructional staff, and turnover rates.
I’ve heard everything from “We don’t want to keep losing staff to . . .” to “You’re getting plenty of money from the state to make this happen.” By analyzing our teacher turnover, we were able to rebut with clear evidence not only that we were not losing staff members to any particular district, but that we were actually hiring and retaining the most experienced staff members in our region.
By the same token, analytics showed that the district was contributing the second highest amount toward compensation above state funding among those same peer districts. It shifted the conversation from whether our starting salaries were competitive to how to sustain salaries for a highly experienced staff.
Analytics also debunked the myth that our district lagged behind our peers in average salary and in awarding salary increases. In fact, they showed just the opposite: our certificated staff members enjoyed the highest average salary of our peers and had bargained an unprecedented 27% salary increase in three years.
One last point about salaries: typically, salaries and benefits run 75%–85% of a district’s budget. Because the data show we are already spending just under 84% of our budget on compensation, it’s imperative that I share the narrative with my board that little room is left in our salary cap, so to speak, for further increases unless we see a drastic change in our revenues. Buildings still need to be heated, and the lights still need to shine (see Figure 6 and Table 1).
Figure 6. Comparison of Percent of Operating Expense
Table 1. Funded Salary vs Average Paid Salary Comparison
The Key to Success
In the end, you’ll know you’ve used your data to the best of your ability to tell your story if both sides come away from the table agreeing that you’ve done good work. It’s possible. I’ve had the pleasure, once I got the hang of proper preparation and communication. Analytics were the key.
This article originally appeared in the March 2022 School Business Affairs magazine and is reprinted with permission of the Association of School Business Officials International (ASBO). The text herein does not necessarily represent the views or policies of ASBO International, and use of this imprint does not imply any endorsement or recognition by ASBO International and its officers or affiliates.
Kim Knight, CSBO, Executive Director of Business Services, Dieringer School District 343, Lake Tapps, Washington