Several school districts inWestern Pennsylvaniahave either recently concluded teacher contract negotiations or are involved in ongoing negotiations that have continued beyond a year after the current contract expired with no foreseeable end to negotiations.  Why is this happening?  As attorneys for several school districts which have resolved their labor disputes as well as districts who are involved in protracted negotiations, possible reasons we have observed are as follows:

  • With the current economic climate, the financial viability of most school districts in theCommonwealthofPennsylvaniahave been challenged.  Increasing retirement costs (PSERS), dwindling tax bases because of assessment appeals, decreased earned income, little or no transfer tax, minimal land development in most school districts, and the ever shrinking Act I index has caused a situation of unprecedented concern on the part of school administrators and school board members.
  • Even if a school district is blessed with a significant unreserved fund balance, projections of new Act I tax revenue against expected school district costs in the near future, including the dramatic PSERS spike, the five (5) year forecast for most school districts is bleak.
  • Inability of several school districts to pay their bills, including Chester Upland, Reading, Allentown, York City and HarrisburgSchool Districts, present concerns which may soon face all school districts.
  • With no foreseeable financial assistance from the Commonwealth, school districts are left to attempt to control costs to the extent they are able, with the majority of those costs reflected by labor expenses. 
  • School districts are facing escalating health benefit costs that far exceed the Act I index, even during periods when contracts are being negotiated under the status quo.
  • In addition, during status quo, teachers work to the letter of the contract and do not volunteer or take on any duties beyond the contractual requirements, creating a situation where no one has an incentive to settle.
  • Teachers do not want to settle a contract where they will be contributing more towards health care when they are receiving little or no wage increases.
  • School boards are more prepared and have community support to continue to negotiate a contract rather than entering into a contract that gives benefits or compensation increases, even if in exchange for other concessions. 

Unless there is a substantive change in the economic conditions or a legislative change, the apparent trend is that contracts are taking longer to negotiate.  One of the solutions to resolving protracted negotiations is to develop creative compensation alternatives.  Three (3) factors converge to increase teacher pay in a traditional salary schedule:  step movement, lane movement, and across the board increases that raise every step in the salary schedule.  Some suggestions for negotiating something different with fewer resources are as follows:

  • Place limitations on step increments – if school districts can negotiate the elimination, postponement, decrease frequency or lessening of step movement, they will spend less or use money they would have spent on step movement in other ways.
  • No step movement – this will save the district money immediately and into the future.
  • Lengthening time between steps – step increases can occur on a less frequent basis, such as every other year or longer.
  • Adding steps to decrease pay increments – adding steps permits the school district to still offer step movement every year and may cut step costs in half.
  • Delayed step movement – a delay in the granting of a step increase for part of the year, typically for a specific number of months, may generate sufficient savings for the district to stay within its budget.
  • Split steps – a split step is similar to delaying step movement, but it generally will not produce as much one time cost savings.
  • Allowing step movement without awarding it – this would move teachers on the salary schedule without awarding them the increase of the step during the contract term.  This results in a one time savings for the district because no one takes a step. 
  • Placing limitation on lane movement – limitations could include requiring credits in advance degrees to be relevant to subject matter taught, deleting lanes, or freezing lane movement.
  • Across the board increases – smaller or no across the board increases will keep salary increases low or could be configured in a way to accomplish cost savings and other goals, including providing bonuses as a one time payment not included on the salary schedule and, therefore, will not raise the cost of the salary schedule for all future years, an across the board flat dollar increase or forgoing step movement in lieu of an across the board percent increase.

Since each of the above compensation alternatives is, to some degree, a non-traditional concept, the success in such proposals being accepted by the teachers will be challenging.  However, if contract negotiations are ever to be concluded in this age of economic uncertainty, those at the negotiating table must be prepared to consider creative alternatives as the traditional approach to compensation packages may no longer be realistic based on the financial realties facing most school districts.

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Alfred C. Maiello
Alfred Maiello

Alfred C. Maiello is the founding member of MBM and has represented area school districts as solicitor for 50 years. He counsels school districts and educational institutions on leading developments in school law and guiding them through their day-to-day and long-term challenges.