fine-print

Seattle’s Cost of Monopoly Bargaining and Strikes

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Seattle Public Schools administrators are hopeful.   They are hopeful that taking all but $6.6 million of the district’s cash reserves, will be enough to prevent a strike.  This is the cost of Labor Peace.  Not many tend to think of the cost of monopoly bargaining and labor peace when speaking about teacher union officials.  It’s about time.  Dahlia Bazzaz has the story in The Seattle Times.

Just before the school year started, Seattle Public Schools (SPS) and the Seattle Education Association negotiated a three-year, $137 million contract, greenlighting the second consecutive year of double-digit raises for educators.

Amid SPS forecasts of financial doom and gloom, the details of how the district will afford the contract long-term are somewhat foggy. While the state and the district’s technology levy will cover a good portion of the cost, SPS will spend $67 million from its general fund and cash reserves to cover the remainder.

On paper, the costs of the deal add to the rapidly increasing gap between the district’s revenues and projected expenditures, originally estimated at close to $100 million in this school year’s record-breaking $1 billion budget. In reality, though, the district often overestimates its spending and winds up with extra money at the end of the year.

Still, district officials say the contract may risk depleting the district’s $136 million in cash reserves — which are tapped during funding shortfalls — beyond what School Board policy allows.

If the paper version of the contract’s financial impact becomes reality, there will be only $6.6 million in that account by summer 2022. That estimate is far below the Seattle School Board’s required minimum 3% revenue in savings, which would amount to about $30 million. To dip that far, the district must seek special permission from the Board before approving the 2021-2022 budget.

It’s a risk that might eventually lead to layoffs, the district’s chief finance officer said, but worth preventing a strike.

 “We’re gonna be going into the hole on this, but if we can’t [offer] our teachers a wage to stay living in this unaffordable community … then what do we have? Not a good situation at best,” Board President Leslie Harris said at a meeting last week, just before she and other members gave their unanimous approval to a summary of the contract. 

While it’s hard to say how many teachers leave the district because of compensation, the union’s public remarks during negotiations pushed for salaries that were consistent with Seattle’s cost of living and competitive with surrounding school districts.

When asked via email what the alternative or consequences would be for taking the spending risk, Berge responded: “A strike and not starting school on time, which disproportionately impacts our students furthest away from educational justice … Again, we planned for the bargain.”

Seattle Education Association Vice President Michael Tamayo said the union wouldn’t have bargained something that would bankrupt the district.

“We are confident the contract doesn’t impact FTE (full-time equivalent teaching) resources,” he said. “Does it concern me? It’s the same message we’ve had in the district my entire career, and I don’t see it changing.”

There is no state-mandated balance minimum for school-district coffers.

“The education funding system in this state has gone through four once-in-a-career transformations in the last decade,” said Kelly, alluding to the changes lawmakers made in the court-ordered overhaul of Washington state’s school finance model.

The School Board will vote on the full version of the contract on Oct. 16.