A grim picture of the 's financial state painted Monday suggests teachers and all unionized employees could lose about 18 percent in pay gradually over the next three school years.
The figures, compiled by Board Treasurer Brendan Walsh, are based on projections and assumptions on funding for the next few years.
According to the projections, the employees are likely to have to take a 2.65 percent cut next year, the 2012/13 school year. The following year is 10.19 percent and the year after, 2014/15 is 5.62 percent.
That total, about 18.46 percent, is a hard figure to digest for teachers and other employees, who have been calling Grosse Pointe Education Association President Ranae Beyerlein with questions all week.
The projections for next year are the most dependable of all the figures, she said, and if the board is willing to work with employees, the near three percent cuts are manageable.
The cuts are part of concessions the teachers and other unionized employees agreed to in the last round of contract negotiations in which employees agreed to make up the difference in fund equity if the balance fell below 10 percent.
According to Walsh's figures, the fund equity balance will end the 2011/12 school year at 8.28 percent—the first time it has dipped below 10 percent.
During negotiations two years ago, Beyerlein said the teachers never thought it would actually happen. There have been so many variables that have changed significantly since the negtiations that it would have been hard to predict, she said.
Among those variables: drastically lower property values making for less taxpayer funding statewide, less per pupil funding, rising retirement rates and more.
Beyond next year, the projections are unpredictable because there are so many unknowns about funding and costs, Beyerlein said. Additionally, the contract is expires and new negotiations will begin, she said.
Although the contract does expire, the terms stay in place until a new contract is reached, Walsh said Thursday. The district has also made many long-term financial decisions, including a healthy retirement benefit option, based on this type of contract, he said, so the district is hopeful to stick with the idea.
"There is little evidence that there is a whole lot more good that will come out of Lansing," Walsh said, explaining that while the figures are projections only it's better for the district to plan based on the trends. It would be unwise, he said, to not acknowledge there is significant risk.
Walsh told the crowd Monday that he does not see a way "to cut our way out" of the declining budget to avoid making the cuts from the employees.
Beyerlein disagrees, however.
The less than three percent deficit could easily be made up, she said, noting the board and administration agreed in reaching this contract to work with teachers in reaching a balanced budget. That has not happened, she said.
There has been some spending association members think was not necessary given the state of the budget, Beyerlein said, including , various surveys the district has been conducting and more. Anything that can be conducted in-house, she said, should be done that way rather than spending money the district cannot afford to lose.
Despite disagreeing with some of the spending that has already been done, Beyerlein said her members intend to work with the board and administration to reach appropriate agreement.
The formula for the contract concessions still has to be determined and the cuts could come from somewhere other than pay, Beyerlein said. Employees could agree to pay more for their contribution of health insurance, for example, she said.
"This is a worst case scenerio," Beyerlein said of the presentation. "We are going to do everything we can do to work with them and lessen the blow to teachers. It's workable if they will work with us. If they are taking the road that we're the managers and you're not, then we'll be right back where we were two years ago."
Collaborative work should be and is the ultimate goal in the process, Walsh said, noting he wants to see the employees and the administration work together to figure it out just as they did to reach the contracts.
Ultimately, the district has been able to devote a higher percentage of its budget to employee pay than other comparable districts because of some notable differences, Walsh said, noting the higher salaries have been maintained even with dropping enrollment.
Among those differences, Grosse Pointe has no bussing system to pay for and maintain, a salary grid that offers employees more upward movement than other comparable districts and more, he said.
"This contract accurately connects to how our school funding works," Walsh said. "This is a much more rational way to do it rather than picking a random number."