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Vouchers: Wisconsin educators serve up doom, gloom with a side o’ scare

By   /   March 22, 2013  /   8 Comments

By Ryan Ekvall | Wisconsin Reporter

MADISON – The public education establishment likes to serve its anti-school voucher program message of doom and gloom with a side of scare over looming teacher cuts and building disrepair.

But it’s hard to make such a dire case in Milwaukee and Racine, home to Wisconsin’s two private school voucher school districts, given the public school system’s past budget priorities.

VOUCHERS: To the public schools establishment, Gov. Scott Walker’s voucher plan signals the Four Horsemen of the Apocalypse. But the state’s two voucher-based public school districts sure are spending on teacher retirement benefits like there’s no tomorrow.

The two districts, and Milwaukee Public Schools in particular, made so many unfunded promises to employees in the pre-Act 10-era, that taxpayers today pay more in retiree benefits in the two districts than the entire statewide cost of educating the nearly 25,000 students in the voucher program.

“We have a very high cost model to deliver education,” Rep. John Klenke, R-Green Bay, said this week to Tony Evers, superintendent of the state Department of Pubic Instruction, at the Legislature’s Joint Finance Committee hearing on Gov. Scott Walker’s budget proposal.

Evers urged lawmakers to forsake Walker’s proposal to expand Wisconsin’s voucher program. “I’m not seeing anybody come forward to say how they’re going to change that high cost model of education in a new era.”

“We will be paying, through our retirement system, for 1.5 people outside of the classroom for every one person in the classroom, if we don’t change,” Klenke said. “I’m not seeing paying for 2.5 teachers in the classroom as sustainable.”

Klenke was referring in part to the pensions in the Wisconsin Retirement System, where prior to Act 10, Walker’s controversial collective bargaining reforms, taxpayers footed nearly the entire funding bill – nearly 12 percent of covered payroll – year to year.

In addition to the state’s generous pension plan, however, MPS contributed $92 million last year to funding the trust fund of its other post-employment benefits, or OPEBs. The benefits include health and life insurance for retirees.

The infusion came after Milwaukee’s public school board took drastic measures that slashed $1.4 billion in future OPEB costs, saving the district $117.2 million in fiscal year 2012, according to the district’s Comprehensive Annual Financial Report.

MPS’ total budget is around $1.1 billion.

Even with the changes, which bumped the eligibility age for health benefits from 55 up to 60 for most current employees, the unfunded liability for future retires is $1.4 billion.

Last year, MPS’ nearly 7,000 retirees and their spouses spent $67 million on life insurance and health care costs, which allowed the district to build up a nearly $30 million balance in the trust fund. The cheerier financial picture was the result of the timing between required contributions versus spending.

Traditionally, MPS has strictly stuck to a pay-as-you-go system. Now the district tries to fund closer to the actuarial amount. The bottom line: taxpayers spent $92 million to fund the trust, but retirees only drew $67 million last year, a figure that changes year to year based on retiree health care costs.

Looking at that spending from another perspective, it costs taxpayers more to subsidize each of the health care benefits of an MPS retiree or their spouse than each pupil in a choice school.

Racine Unified School District contributed nearly $8 million to OPEBs last year, $2.7 million short of actuarially calculated amounts to fund future costs.

The voucher program for 500 students in Racine costs around $3 million.

Racine’s unfunded liability – or amount actuaries expect future taxpayers will have to pay — for all current and previous Racine Unified employees is nearly $85 million. In Racine, most employees can still retire at age 55 and qualify for OPEBs.

The entire budget for the Milwaukee and Racine voucher programs was about $158 million last year. For comparison, Racine Unified, which has about 21,000 students, will spend some $314 million this year.

Evers has pushed for more traditional funding for K-12 public schools, asking lawmakers to forego a proposed middle-income earner tax cut and boosts in education spending to load more money into the public education system.

Evers said he was at the hearing to “advocate for a budget that reinvests in our public schools.”

Walker’s budget proposal instead adds $129.2 million to state equalization aids, while keeping revenue limits flat, money that essentially goes back to property taxpayers. His education funding plan also includes another $100 million or so for new competitive grant programs, data systems and teacher resources and assessments.

“No new textbooks or computers. No additional reading or career and technical education teachers,” Evers explained in a statement following the release of Walker’s budget proposal. “No additional interventions or services.”

Evers is a vocal critic of Walker’s proposed voucher program expansion plan, which could add up to nine new districts in addition to Milwaukee and Racine next year, if the Legislature buys in. Walker has also called for an increase in per-pupil spending in the voucher program, which currently pays up to $6,442 of costs per student.

Evers isn’t the only agency head looking for increased funding this year.

“At this time of year, it seems everybody is asking us for more money,” said Sen. Glenn Grothman, R-West Bend, at the hearing.

He, too, suggested school districts could find savings in changing their health care benefits, like the Milwaukee school board has done only recently, more than twenty years after it was alerted to the growing problem in 1989.

According to the nonpartisan Employee Benefits Research Institute, 37.5 percent of large, private employers (over 1,000 employees) offer OPEBs to early retirees and 31.5 percent offer OPEBs to employees past Medicare eligibility.

About 77 percent of local governments offer OPEBs to early retirees and 63.2 percent continue that coverage past Medicare age.

Contact Ekvall at rekvall@wisconsinreporter.com

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Ryan Ekvall

  • Jack Lohman

    I love it. Vouchers = privatization = campaign bribes. I can’t trust these bast*rds as it is, now we should insert payola?

  • http://www.facebook.com/people/Jeff-Farnsworth/100000328481507 Jeff Farnsworth

    Your formula is a wild distortion of reality as is these pro union school districts talking points. Lets give a simple comparison. There is a Burger King and a McDonalds across the street from one another. McDonalds employees (teachers) are rude, over-bearing know-it-alls that try to tell you what they think you should want and when you get it is is blatantly under-whelming in it’s quality. When you leave you are still hungry since there was more packaging (propaganda) than food (learning) in the meal they sold you. Burger King has polite welcoming employees that listen to what you really want and will do everything they possibly can to reach your goal. When you leave you are very comfortable and satisfied knowing your family has been provided with a quality, balanced meal (education) and it even cost less. The manager at Mcdonalds gets mad because he is losing customers to the competitor so instead of modifying his employees attitudes by getting rid of the worst ones (which he cannot do) and forcing a change of his employees attitudes by using incentives (the carrot and the stick…or the threat of being canned), providing better quality food and keeping the dining area clean and safe he complains to his upper management asking for more advertising money (taxes) to help him stay above water. Public schools are not losing money…they are losing customers because they provide such a poor quality product in many locations. For decades Mcdonalds had tried to improve this by paying their employees more and more but it didn’t matter at all, the final product keeps deteriorating with no end in sight.

  • mosloehand

    I cant have said it any better, until the Unions their Bosses and thugs wake up to the fact if they the only way they are going to stay in business and its a Billion dollar business for them is they are going to have sell a better product and once you get the Liberal Politician’s out of letting Unions run them instead of the other way it will happen, but there is to much money and Power involved.

  • Franseenit

    Have you read information about the CEO and staff payscales at outstate private schools? They far out pace the public schools and other states have shown the figures that bear this out while the grade success is marginal. The problem is we will have worse graduates from the private schools at that rate. This is strictly an effort to privatize all America’s education into the hands of greedy corporatists. Next will be “qualifying exams to even get accepted into any school” Why would anyone think that this voucher road will a good thing – check out the other states numbers – you will not (hopefully) be impressed.

  • UsingMyBrain

    Have you read information about the CEO and staff pay scales of instate private schools? Maybe you should. I serve on the board of directors for an instate private school. The principal/school administrators/subsitute teacher (yes she does all and has for 23 years) makes about 2/3 the wages of a starting public school teacher. The teachers are about 1/2. No employee receives retirement benefits. The board of directors work as volunteers, i.e. not paid but instead donate to the school because they feel so strongly about the quality of education the students receive. No “greedy corporatists” (is that really a word) here!

  • UsingMyBrain

    Sorry, didn’t give you enough information. The students at the school outperform the public school students. There is no testing to keep only those who perform well in the school. The major difference is the parents sign a contract to be involved with their childs education. The parents who place their children in the school want their children to be the best they can be and will help them to set and reach goals.

  • Franseenit

    You are likely referring to religious or charter schools. First off, we have no business supporting religious schools with taxpayer money – if so they and their congregations must be taxed like other corporations. The goal of this voucher program is to open up the ‘market’ for independent corporate schools which have taken hold in several states. The investigations into these CORPORATE schools are very disturbing. The CEO’s are ‘enjoying’ compensation much higher than typical schools – several have been sued as parents watched them destroy their children’s formative education years. The grades, graduation rates and quality of the education in these schools is not worth the states investment – they may not be here right now but that is what the GOP wants – corporatize education – do away with public education.
    I am not opposed to religious/private school, but if someone wishes to choose that, vouchers must not be a part of your choice. My parents sent 11 children to Catholic schools – they drove us there – we lived 4 miles from school and picked us up in the afternoon. This voucher idea is a very slippery slope – when we no longer have public education only the wealthy will have an education of any kind. The republicans have been against public education since its inception. I have read anti-public education newspaper articles from the early 1930′s that were shocking. It was among my mothers things – she was concerned about that even though they chose to pay for private education.

  • Franseenit

    I do not deny the positive results of these charter schools – friends have sent their children to them. This is not what Walker and the ALEC group has in store for Wisconsin – they are talking about CORPORATE SCHOOLS where they can reap huge profits as they give a substandard education – it is easy to find these news articles – Google will get you there.