Philly School District Lays Off 3,783 Employees

Facing a budget deficit in excess of $300 million, the School District of Philadelphia has announced the layoff of nearly 3,800 people. The layoffs amount to about 20 percent of the roughly 19,000 total personnel on the district’s payroll.

Why the big deficit? Based on the district’s proposed budget, the two largest causes of the shortfall are a sharp drop in Federal grants and the deficit from last year that required borrowing to fill the gap-borrowing that cannot be repeated. Another problem that is developing to exacerbate the funding shortfall going forward is the hike in the amount the school district will have to contribute to pensions. Unless there is agreement on pension reform legislation, Philadelphia, as well as most school districts in Pennsylvania, face ruinous increases in pension funding. And that means higher city taxes, more layoffs or both. Philadelphia, like many other communities across the state, is not in any position to absorb higher taxes.

Serious pension reform is needed and teachers’ unions must consider the pain they themselves will suffer in the short run as evidenced by the layoffs already occurring across the state. Layoffs that will grow as the pension burden gets larger in the years ahead. Fighting common sense reforms that preserve benefits earned to date and ward off major tax hikes is a train wreck in the making for the unions.

Teachers and Legislators Getting Schooled on Bad Policies


Facing a large budget deficit, the Plum School Board has voted to lay off 23 teachers.  The principal causes of the $1.48 million deficit are salary increases of over $900,000 and a requirement to boost the District’s pension contribution by $1,000,000 for the upcoming fiscal year. Limited to raising tax revenues over the current fiscal year by a state imposed index, the School Board has opted not to apply for an exemption from the Department of Education to increase tax rates.



Teachers were asked to voluntarily forgo the salary increases called for in the contract but rebuffed the request, necessitating the personnel reductions. As required by a state law that does not allow teacher layoffs for economic reasons but does permit layoffs for enrollment declines or program eliminations, the Plum school board is targeting several programs for elimination including ROTC, television production, and family consumer science among others.  Predictably, the teachers’ union head responded that “children should not be held hostage”-adding that the union wants to save all programs now and in the future. 


How ironic. Teachers’ unions have pushed for and received the job protection legislation that prevents school boards from making teacher layoffs across departments and working to achieve the least disruptive results of layoffs.  By forcing school boards to eliminate entire programs in order to make layoffs, the legislation does exactly what the teachers want; hold taxpayers hostage. They pit parents against taxpayers knowing students and parents of children taking classes in the programs targeted for elimination will raise a fuss and clamor to preserve the programs.  This strategy of pitting parents against the taxpayers and the school board on behalf of teachers works well when strikes or threat of strikes occurs. It is very clever to set up a scheme that deflects attention from the creators of the problem to the school board.


All this is now occurring in the reality of the massive and growing shortfalls in the Pennsylvania teachers’ and state employees’ pension plans.  These shortfalls will necessitate very large additional contributions from the state coffers as well as school districts over the next few years if major changes in the pension laws are not forthcoming. The reforms proposed by the Governor earlier this year would go a long way to dealing with the problem.  However, these reforms face enormous opposition from state employee and teacher unions with the threat of court challenges.

The plan to implement a new payout scheme for future years of service of employees who are currently employed while preserving the benefits earned to date is a major obstacle. Outcomes in the court are not assured and reforms could be nullified completely or delayed for many years.


But the lesson from Plum for teachers and the Legislature could not be clearer or starker.  With the billions of dollars that will have to be poured into pensions over the next several years if dramatic pension reform is not enacted, the state and school districts are facing an excruciatingly difficult dilemma of deep spending cuts or tax hikes. And as long as the law is in place that requires program elimination to layoff teachers, school boards will eventually be forced to cut into education muscle and bone.


Here is the reality. If teachers and state employee unions are not willing to accept the proposals outlined by the Governor, they will inevitably see their wages and non-pension benefits cut and many of their associates lose their jobs. The only alternative will be tax hikes that will cost many private sector jobs and hurt the state’s economy, a situation that over the long term helps no one-and certainly not the public sector unions.


It is now incumbent on the General Assembly to move quickly on substantial pension reform legislation to avert the coming disaster. It should also immediately amend the statute that requires entire programs be eliminated in order to have teacher layoffs.  And that should be followed by emulating the states, including the addition of Wisconsin in 2011, that do not permit teacher strikes. Teacher strikes are the ultimate argument against public sector unions.  Nowhere is the Madisonian admonition for the government not to create and/or side with powerful interest groups more in evidence. The opportunities for powerful public sector unions to use their considerable resources and influence to get friendly legislators elected and to have those legislators work for legislation favorable to the unions are demonstrably antithetical to good governance and sound fiscal policy. And they are the ultimate weapon against taxpayers.


The teachers and state employees have a decision to make. Will they fight pension reform with great zeal and vehemence and likely win a pyrrhic victory wherein they cause great damage to themselves and the state’s economy and taxpayers?  

Dilemma for a Small District

Cut positions in order to save the district. That’s the position taken by the administration of the Northgate School District, a district serving the North Hills communities of Avalon and Bellevue. Population has fallen in the communities, as has public school enrollment, but there are more teachers now (115) than there were in the 1995-96 school year (110). Thus, the proposal to layoff 23 teachers and 10 aides at a meeting this week. As we have written before, Pennsylvania only allows layoffs of public school employees when there is a drop in enrollment or a program is shuttered, not for economic conditions.

Consider: in 95-96 enrollment was 1,644 students and the pupil to teacher ratio was 14.9. In 12-13 enrollment was 1,211 and the resulting ratio was 10.5. Laying off 23 teachers-and assuming enrollment does not change dramatically for next year, say it stands at 1,180-the pupil-teacher ratio would be 12.8, lower than the national average of 15.1 and that of Pennsylvania (13.8) as of 2010. Curiously, a November 2011 article detailing a new four-year contract for teachers recalled three teachers who had been laid off and stated that it had "eliminated the need for additional layoffs".

The superintendent-who was hired last May-went on record saying he would not support merging with another district due to losing the character of neighborhood schools that serve the district. Property tax rates went up 24% in the District from 2001 through 2012 and, at 28.6 mills now, the District has one of the highest millage rates in Allegheny County. Northgate, like all districts in the state, are facing steep increases to pension costs. How does the District work its way out of this situation?

Bethel Park Superintendent Seems Confused About Responsibility

Lamenting the inability of the Bethel Park School District to get a contract with teachers for the last two and half years, the superintendent says she has been silent until now because she is in a " peculiar position of advising the Board and leading the staff."

Hold the phone. Does the Board not hire superintendents to manage the schools on behalf of the residents and taxpayers of the district? That being the case, the superintendent is honor bound to work for the board and taxpayers. Staff members do not pay her salary, they answer to her as the board’s appointed agent in charge.

Clearly, she has the obligation to advise the board on what it should do vis-à-vis the teachers’ contract but her obligation has to be first and foremost to the board. She can be an advocate for programs that improve education or management procedures that improve cost effectiveness. At the same time, she is not, and should never consider herself, to be a spokesperson for the union’s interests. The union has enough power on its side in the bargaining process including the right to strike and the state’s idiotic no layoffs for financial reasons provisions.

If the talks are at an impasse, and compensation costs cannot be lowered under the terms of the old contract, the superintendent should offer suggestions about programs to cut-one of two criteria the state permits for reducing staff. Alternatively, if teachers will not agree to slight increases in class size to save their jobs, then the onus must be on their union for staff that lose their jobs because of intransigence.

The Bethel Park board should question whether the superintendent understands her role.

What Triggers a Voiding of PAT Agreement?

There are a lot of "ifs" in the agreement that was crafted between the Port Authority management, the Amalgamated Transit Union, and the Commonwealth that held off service cuts and reductions that were scheduled to happen at the beginning of September. If the RAD board agrees to fund PAT, if the County comes up with money from the drink and car rental taxes, if the state finds the money etc., etc.

The PAT website has a summary of the executed agreement between PAT and the ATU and it states that there are essentially three events that could trigger one of the parties to void the agreement and reverting back to the prior contract. "In the event funding is insufficient" and either:

  • 1. A bus garage is forced to close (there are five operating divisions in the County) or
  • 2. More than 5% of the current bargaining unit workforce is laid off (as of June 30, 2012 there were 2,106 ATU employees according to the PAT budget) or
  • 3. More than 5% of the 2,300 bargaining unit is laid off over the life of the four year contract

Note that the most recent "doomsday" projection for September 2012 would have shuttered the Collier garage and resulted in layoffs that would have hit the PAT workforce (not all were represented by the ATU) to the tune of 23%. Based on the conditions above the range of headcount reductions would be 105 to 115 employees. Seeing that the PAT board and management has historically been inclined to avoid any interruption of service it is unlikely that they would be the party that would void the contract if one of the above did indeed occur.

Pittsburgh Schools Staring at Huge Deficits

In its recent proposed budget document for fiscal 2013 and the outlook through 2016, the Pittsburgh School District reveals rapidly expanding deficits over the next four years. Spending is projected to rise from $516.5 million in 2013 to $561.9 million in 2016, while revenue edges up a slim $6 million from $512 million to $518 million.

Causes for the $35 million jump in spending are listed as; salary increases, swelling pension payments, and expanding health care costs. Much of the rising costs is locked in by labor contracts and long term obligations entered into years ago. Realistically, significant savings can be achieved only through more personnel cuts or a large turnover in staff in which senior, high paid employees are replaced by entry level and lower compensated workers.

Layoffs of teachers can occur for only two reasons: one, declining enrollment and two, elimination of programs or some combination of the two. Thus, it is difficult to project declining employee compensation through layoffs. Eliminating entire programs is possible, but at some point program cuts can reduce the quality of the educational experience and make the District even less attractive. The state law that imposes the idiotic set of requirements needs to be addressed. It is far better to add a couple of kids to each class rather than eliminate a science program or foreign language courses.

But be that as it may, Pittsburgh schools are looking at serious financial trouble. There is one path to lower spending still open although it is not a desirable one. Note that enrollment continues to slide, dropping below 25,000 in the last school year. The decline in student count has been falling at a rate of over 1,000 per year for many years. The latest census shows a significant drop in the population in the numbers of children who will be of school age in the next years. There was also a big decline in the numbers of adults in the child rearing age groups suggesting that the Pittsburgh Schools are a major factor in outmigration.

Ironically, the District can cut spending growth only by continuous downsizing its operations. The tragedy is that spending per student is holding above $21,000 and will rise even further as enrollment drops. Expenditure cuts cannot match enrollment reductions because of the pension and health care commitments and the increases in costs they will entail.

The answer for education in Pittsburgh is-as it has always been-to adopt a voucher program and allow children and parents to attend schools of their choice. Maintaining the government monopoly schools to protect the teacher unions and the educrats who benefit from the state run monopoly that fails in its moral obligation to prepare students for life after school is disgraceful. The never ending string of excuses will continue unless or until Pittsburgh parents and residents demand change. The state could help with a voucher law, but the state has shown itself to be content to live with the status quo. As a result thousands of Pennsylvania children are being denied the opportunity to participate fully in the American dream.

Transit Pact on the Table

According to published reports and a news release from the County Executive’s office, there is a tentative deal between the Amalgamated Transit Union and the Port Authority that represents "the first step" to avoiding the service cuts and layoffs scheduled to go into effect September 2nd.

There will be scant details until the contract is voted on, sometime around August 19th. Therefore, any comment as to what is in the contract or what the contract does vis a vis the state putting up money for closing the 2012-13 deficit is speculation.

What can be commented on is how this contract process compares to the 2005 and 2008 contract expirations and negotiations. The last contract was not voted on until December of 2008, some six months after it expired. In 2005 it took until November of that year. If the present contract is approved it will have been a considerably shorter time frame. The 2008 contract also went to fact finding, and that process was not even completed until the end of August 2008.

Going back to January 1, 2006, ATU wages have gone up 3% per year with the exception of 2010, when the increase was 2%. Employees are paying 3% of their wages toward health care coverage. The 2008 contract also truncated employees into various classes based on age and length of service to determine post-retirement health benefits.

PPS: What Results from Staff Reductions?

Following last night’s school board meeting, the Pittsburgh Public Schools will have fewer staff members at the start of the 2012-13 school year, including 176 K-12 teachers. A look at the audited financial statements of the District shows what we have pointed out for many years: enrollment continues to fall. In the 2005-06 school year there were 32,529 students, and at the beginning of the 2011-12 school year that just concluded there were 26,652 students. Note that in the audit enrollment is taken on the first day of school. Recent numbers provided by the District that we reported in a blog put enrollment at 24,624 on the last day of the 11-12 year.

If we use the audited enrollment and audited headcount shows that all classifications of employee groups fell from 2005-06 through 2011-12 with the exception of health service, which reported one more employee in 11-12 than in 05-06. Administration, instruction, pupil affairs, operations/maintenance, and food service all reported fewer employees. The key measure is the group in instruction identified as teachers: in 2005-06 there were 2,722 and the pupil-teacher ratio was 11.9. In 11-12 there were 2,196 and the pupil-teacher ratio was 12.1.

If the layoff/furlough of teachers stands, there will be 2,020 (assuming pre-K teachers who were laid off are not included in this total) teachers at the start of the 2012-13 school year that begins next month. If enrollment at the beginning of the year remains around 24k or so the pupil-teacher ratio will not change much. If enrollment at the beginning of the year slides even further from the 24k, let’s say to 23,900 on the first day of 2012-13 with 2,020 teachers, the pupil-teacher ratio will stand at 11.8.

Pine Richland Schools to Cut PE

The lunacy of Pennsylvania school laws strikes again. Faced with a budget deficit that cannot be filled by raising taxes as much as the tax base can bear, Pine Richland schools will eliminate the physical education program and cut 5.5 teaching positions.

Why are they doing this? Because state law does not allow a district to lay off teachers for economic reasons. Teachers can be laid off only when enrollment drops significantly or entire programs are eliminated. Since enrollment is not down and teacher pay and benefits continue to rise, the District finds itself in a dilemma. The money is not there to pay everyone and the teachers’ union will not voluntarily suspend pay increases or agree to concessions during the period of financial difficulty so the District is forced to reduce expenditures by dropping a program. Goodbye PE. It could have been music and art, maybe foreign languages, but apparently the least bad cut was the PE department.

Now all those parents and handwringers who will decry this move can begin their screaming at the Board. But they should be screaming at the state laws and the unions that have created this monstrous situation. Stupid and obnoxious do not begin to describe statutes that protect teachers to the degree Pennsylvania elects to do. Thus, rather than asking some sacrifice by several departments in the form of slightly larger class sizes or schedule changes needed to accommodate one less teacher per department, an entire program has to go, guaranteeing the maximum public outcry and attacks on Board members.

And so it goes. Just one more indication of how down the road to total government chaos Pennsylvania has traveled.

Rally Participants Should Not Be Surprised

Nine community organizations joined together yesterday to rally for factors other than seniority to be considered when the Pittsburgh Public Schools takes action to reduce the employee headcount this fall, with at least 350 classroom teachers the initial estimate. Several advocacy groups said that the data is there to make a determination on effectiveness; the teachers’ union says seniority is the only fair way; the Board hopes to find a middle ground.

That the union is holding steadfast in its position on seniority should have come as no surprise: even as the District and the union worked on a pay for performance model and negotiated a five year contract in 2010 and there was a spirit of cooperation the documents applying for foundation money to support teacher effectiveness stated "…the [Pittsburgh Federation of Teachers] membership will be the final voice on collective bargaining issues" and "…the PFT membership will be the final voice on these initiatives [related to pay for performance]". The contract states that "system seniority shall be the sole applicable seniority criterion to be applied in the layoff of any teacher(s)". Even much of the contract language that implements the Teacher Effectiveness Plan contains special seniority provisions.