Ann Arbor school district will have to pay unemployment insurance for laid-off teachers
Students work at different stations in a kindergarten class at Mitchell Elementary School earlier this year.
Melanie Maxwell I AnnArbor.com file photo
But if the district is forced to achieve these staffing reductions through layoffs, the cuts will have monetary repercussions.
The school board approved Wednesday issuing layoff notices to 233 teachers, in order to prepare for a possible cut of 50 positions.
The 50 positions carry a price tag of about $4.7 million — more than half of the district's $8.67 million budget shortfall for next year.
For every full-time teacher the Ann Arbor district lays off — or cuts through attrition — the savings in salary, benefits, pension contribution and Federal Insurance Contributions Act tax will be $100,000. But for each laid-off teacher, the district is required to pay about $7,200 in unemployment insurance.
District officials explained workers who become unemployed through no fault of their own are entitled to temporary benefits for up to 14 to 20 weeks paid for by the district. The cost is around $360 per week, for a total expense per employee of about $7,200, said Deputy Superintendent of Human Resources and Legal Services David Comsa.
So despite saving $4.7 million in compensation costs by laying off 50 teachers, the district would be required to add about $360,000 back into its expenses to cover unemployment insurance for the laid-off instructors. So the net savings would be $4.34 million.
Ann Arbor Public Schools board Vice President Christine Stead speaks during a public hearing at the Ann Arbor District Library.
Angela J. Cesere | AnnArbor.com file photo
Trustee Christine Stead said the act of teacher layoffs will add to the amount of money by which the district must reduce its operating expenses in order to pass a balanced budget for 2013-14, resulting in more agonizing discussions about tradeoffs and which awful cut is better than another awful cut.
"I do want to raise my colleagues' awareness of some of the other impacts that we may have," Stead said at Wednesday's Board of Education meeting.
Stead has been one of the trustees most vocal about trying to save teachers.
The unemployment insurance costs would apply to any employees that are laid off, which could include another 26 FTEs from grounds, maintenance and custodial services, and from guidance counselors and central office staff. The school board agreed to keep these positions on the chopping block at a study session on May 15. The gross savings would be about $1.5 million.
The board also looked Wednesday at reductions to office personnel (3.5 to 6.5 FTE), teacher consultants (8 to 8.5 FTE), teaching assistants (4 to 4.5 FTE) and speech and language pathologists (2 FTE) for a savings of $250,000. There also is the possibility to cut two community assistants or paraeducators from each comprehensive high school, one from Ann Arbor Technological High School and one from Roberto Clemente Student Development Center for an estimated gross savings of $347,200.
The cost for unemployment benefits for all of these additional 45 employees could be around $324,000. Combined with the teachers' unemployment insurance, the total cost to the district to lay off staff could be in the realm of $648,000.
Which staffing positions ultimately will be cut is still unknown at this point. It likely will not be clear until the board passes a budget in June.
Trustees have been trying to find ways to look at anybody and anything else but teachers to get to the needed $8.67 million in savings for 2013-14.
The board has until June 30 to approve a balanced budget for the next fiscal year.
Stead touched on the remaining financial unknowns at Wednesday's regular Board of Education meeting, as well as Thursday on her blog.
Among the many things still in flux, Stead said, is the potential to lose a portion of the district's special education funding due to the federal sequestration. There also are about five pieces of legislation that have been proposed in Lansing that could permanently decrease money that goes into the School Aid Fund, Stead said.
Another cost that will need to be factored into the district's $8.67 million budget shortfall is the expense of borrowing $10 million to make payroll. The district will be required to pay some processing and interest fees on the line of credit. District spokeswoman Liz Margolis said the district's interest rate is not finalized yet.
A Republican-led School Aid Conference Committee last week approved a 3 percent increase to K-12 education funding in Michigan. It is unknown whether the Ann Arbor Public Schools will see any of this money because, as of Thursday, the proposal on the table was to raise the per-pupil foundation allowance by $60 at the state's lowest-funded schools. Other proposals are still floating around, however, Stead said. The latest idea is to give all districts a $5 to $40 per-pupil boost.
For AAPS, that boost could mean an additional $82,500 to $660,000 in revenue and could save — on the low end — the Pioneer High School theater technician or keep the middle school pools open. On the high end, the boost could preserve high school transportation, the seventh-hour option or 6.5 teaching FTEs — or cover the cost of unemployment benefits for laid-off staff.
Danielle Arndt covers K-12 education for AnnArbor.com. Follow her on Twitter @DanielleArndt or email her at daniellearndt@annarbor.com.
Comments
Stuart Brown
Mon, May 27, 2013 : 3:14 a.m.
Questions for Christine Stead: how many buckets does AAPS maintain? In other words, how much money is stashed away in non-general fund, discretionary accounts? Why not make admins eat the $8 million and leave the teaching staff alone? If the admins threaten to quit, good riddance!
MichU
Mon, May 27, 2013 : 2:35 a.m.
The Board needs to keep as many teachers as possible; they should make the cuts in the bureaucracy that is Balas!
newsmuse
Mon, May 27, 2013 : 1:24 a.m.
It would be interesting to request the W-2 information on principals and compare that with their publicly acknowledged salaries. I believe that they get bonuses for meeting goals that are really simply a part of their regular assignments- e.g., completing staff evaluations. Are student suspension rates down because principals get a bonus if they don't suspend students? These bonuses may seem far fetched, but maybe Danielle could look into the extra payments that principals receive above their base salaries for simply doing their jobs
J. A. Pieper
Tue, May 28, 2013 : 11:09 p.m.
I would also love to have these issues delved into a little more deeply! Especially since the reason there are less suspensions is that we really are not allowed to discipline students from a specific culture. And principals get a bonus because suspensions might go down? And, does the public realize who does the most work on teacher evaluations? The Teacher! With new guidelines for 2013-2014 school year, all tenured teachers will be completing what is known as a Professional Growth Plan (PGP) each year, and all of this work is done by the teacher, while the principal makes sure it is updated on the Stages web site.
Laurie Barrett
Sun, May 26, 2013 : 8:38 p.m.
I hope students in the system are getting world-class educations. Something's rotten in the state of Denmark if not.
AMOC
Mon, May 27, 2013 : 1:49 p.m.
A few AAPS students are getting a world-class education. Most are getting an education above-average for Michigan, but distinctly inferior to Massachusetts, France or Germany. What's really first class about Ann Arbor Public Schools is our salary levels for teachers and administrators, and the sheer number of administrative positions in the school system. You'd think they were trying to behave like the University of Michigan. Only in Ann Arbor!
Tom Joad
Sun, May 26, 2013 : 8:09 p.m.
Can't keep up the charade of an improving economy with significant teacher lay-offs
BhavanaJagat
Sun, May 26, 2013 : 5:13 p.m.
Whole Dude - Whole Mess: My father spent his entire career in educational service in India and I have some good understanding as to how our State Government in India funds the costs of education it provides in state-owned academic institutions. I am surprised to note the amount of secrecy that is imposed upon disclosing the true costs of providing education at public schools. This story simply describes some of the costs involved in removing some staff members from service. It does not say as to how money is being spent to maintain the rest of the staff members who may continue to keep their current employment status. In a different story published by AnnArbor.com, it was gratifying to read that the School District has enough supply of funds to undertake several projects during the summer months. It is my impression that the District has issued these layoff notices to all teachers to scare the public and to force us to vote the approval of additional funding in a future ballot proposal. The public should not be fooled by this trick.
Charles Curtis
Sun, May 26, 2013 : 4:40 p.m.
Is anyone concerned that it seems every day we get another surprise, or I should say the BOE get another surprise? Lets see the deficit grew more than $1 mill over the last few months, and now one of the proposed cuts is not going to deliver the stated reduction. We need some real people to do the budget and fired everyone there now. The reason we keep getting surprises is only due to a few possible things and all of them should have the tax payers demanding new personal at AAPS. We either have complete incompetence, people lying or hiding things, math errors, lack of gathering needed information, no information on needed facts ... all of these are just not excusable anymore. If the BOE cannot get proper information, or doesnt know what information to ask for, they need to go. If the administration of AAPS is not forthcoming with the needed information, then they need to go. Im personally sick of our government telling me they know better and to not worry about things, they have it under control. Hows about we see some evidence of the government being responsible for anything they do/decide.
Greg
Sun, May 26, 2013 : 4:28 p.m.
Guess having to function within a budget is not something that this school district figured would ever apply to them. Spending was out of control, that is why there is such deep problems currently.
Let me be Frank
Sun, May 26, 2013 : 3:11 p.m.
Why doesn't the equation for reducing costs include those in the administration ranks? The teachers represent a direct service benefit whereas the administration is overhead. What have been and are the total number of administrators and administration salary expenses over the past five years versus the total number of teachers and their salary and wage expenses? This would be good for the AnnArbor.com to find out and report.
jns131
Sun, May 26, 2013 : 2:56 p.m.
This just gets better and better all the time. Layoffs and budget cuts, gee I think it is time for an EMF to come and clean house. Privatize Balas. There you will save a lot more then letting go great teachers. Rethink your strategy and then come back with a better idea. BOE? You really hit quagmire this time.
Poorman
Sun, May 26, 2013 : 2:53 p.m.
It is time we start rewarding and dismissing public union workers based upon their performance and quit only using seniority. This yearly raise approach and protected worker system is doing a great disservice to our schools and children. Some of the best teachers are going to be laid off just because of lower seniority. Some of the worst will stay and get automatic raises solely because of senority. We will be forced to dismiss more teachers with this approach because we will be letting only the lowest paid employees go. In private industry, employees are rewarded for performance and efficiency. You cannot survive in the real world without a focus on affordable performance based pay. The low performance and inefficient public school systems will not get better until we change to a performance based reward system. It is done in private industry with much more difficult to measure work tasks.
elise
Sun, May 26, 2013 : 2:18 p.m.
Why are people not demanding the principals take a pay cut like all the other staff in the district? I find it interesting that they suggest the super take a $50,000 cut and they STILL haven't stepped up and taken a cut themselves. Do they find themselves more important than the rest of the staff in the AAPS system? They continue to wait to take a cut, while the district has to lay off teachers and possibly pay for their unemployment. Interesting.
Charles Curtis
Sun, May 26, 2013 : 4:53 p.m.
The district ought to be cutting and straight say 10% for everything, and if the contract says you cant cut the salary, then cut a position. Or maybe the principal's union contract prevents that as well? I cant support any part of AAPS who is not taking some type of cutback that is on par with what the student are having done to them.
Basic Bob
Sun, May 26, 2013 : 3:19 p.m.
They can demand all they want, but there is a contract which must be honored. I would start with a thirty percent cut in the number of union administrators and see if that loosens up the negotiations. That fits right into the idea of closing buildings, which apparently can't be done.
Greg
Sun, May 26, 2013 : 2:14 p.m.
Sadly, because teachers are straight union workers, layoff will be by seniority, Not competence. One of the reasons unions are losing credibility fast.
Joe Hood
Mon, May 27, 2013 : 3 p.m.
ThinkingOne: That's an assumption that the administrators are competent. If you have pushed out an incompetent principal to become an administrator...
Charles Curtis
Sun, May 26, 2013 : 4:49 p.m.
I would have some respect for unions if they actually policed themselves, but they do more to protect the problems, than to insure there union is the best it can be. But when you force all employees into the union , I guess thats the best they can do. Getting a job should not automatically get you into a union. There was a time when union workers were a guarantee of the highest standard of workmanship, but like so many other things that is a memory.
Basic Bob
Sun, May 26, 2013 : 3:17 p.m.
Economic reasons are not the only time to sharpen your pencils. But good organizations can use it to their advantage. Poor ones hide behind arbitrary rules such as seniority, which actually ends up increasing the cost to districts when one considers that by contract, one senior teacher can still only be assigned to the same number of classes or students as the most inexperienced.
ThinkingOne
Sun, May 26, 2013 : 2:39 p.m.
If the administrators are doing their job, incompetent teachers would be continuously weeded out on a regular basis. There would be no need to do this under the guise of layoffs for economic reasons.
Paula Gardner
Sun, May 26, 2013 : 1:20 p.m.
I just removed a comment from this story that repeated a statement that was made in a school story on Saturday. I'm contacting the person who made the comment. I'd like to reminder readers that this forum is designed to express opinion about a story or topic; it also allows readers to share information that they have on a topic that may not be in the story. That information still needs to fit our commenting guidelines and if it's presented as fact, it needs to be verified.
timjbd
Mon, May 27, 2013 : 4:48 p.m.
I posted links to stories backing assertions in one of my posts and it was yanked. So which is it? Verify your assertions with links or don't post links to verifications (and thereby not actually verifying your assertions)?
BonoVox
Sun, May 26, 2013 : 1:19 p.m.
I am confused as to how we get to 94k per laid off teacher saved (50 positions save 4.7 million). More informed others, please correct where I am wrong, I am going from memory. salary= 40k (first year teacher; assume most would be at this level due to seniority lay off) FICA about 2k, health insurance 12k, retirement (20% or so) 8k= 62k Unemployment cost= 7k; Total savings per teacher = 55k. Assuming attrition gets 25 (15 retirements already) or so, eliminating 25 teachers would save about $1.8 million. What am I missing?
AMOC
Mon, May 27, 2013 : 1:43 p.m.
AAPS has widely stated that their average annual cost per teacher, including salary and benefits, is $104,000. Even if you assume that the majority of the teachers who will be laid off are the lowest seniority teachers who can't "bump" to a position for which they are qualified, as required by the contract with the AAEA, the $7k cost of unemployment benefits will, on average, be budgeted by AAPS at $94k in savings per laid off teacher. Ann Arbor has many highly educated teachers, who make, on average $70k in salary even when they may have only a few years in the district. Many of them also get "points" money for coaching, administrative assignements or for supervising performing arts groups and student clubs outside of regular school hours. Health insurance coverage runs about 30-35% of salary for employees in that pay range, and MSPERS retirement payments have recently been capped by the state at 25% of total compensation (includes the points, department chair bonuses, etc.).
chapmaja
Sun, May 26, 2013 : 7:40 p.m.
The layoffs may or may not be the lowest paid teachers anymore. Remember, they are talking about cutting several more specialized positions, which likely means more tenure, and thus higher paid positions. Also, IIRC the schools contribution to the MiPSERS is more like 25% for the upcoming school year. Let's take an average of 50K not the 40K you assume. The payroll tax per employee is 7.65% or nearly $4000 per employee. Let's use 22% as the MiPSERS amount, or another $11,000. Add in 12K in insurance benefits (which might even be higher), and now you are looking at saving over $76000 per employee, minus the lost savings from UIA payments. One other thing to consider is time off that these teachers get. Many contracts allow teachers to accumulate sick days and personal days. By getting rid of teachers you also reduce the number of sick and personal days the staff can take over the course of a year, which in turn reduces the number of substitute teachers needed to replace those days during the course of a year. I think 94K might be a bit on the high side, but I think it is closer to 94K than the 55K you project. As with everything, the number really is somewhere in the middle. The district, based on an average salary of 50K will be saving roughly 69K per employee laid off.
Charles Curtis
Sun, May 26, 2013 : 4:56 p.m.
Thats the new math. But yeah numbers really dont add up for me either, maybe another error to be dumped on us later?
Dr. I. Emsayin
Sun, May 26, 2013 : 12:45 p.m.
Are schools saving money by putting retired administrators into schools like Clague, Clemente and Skyline when an administrator is needed to help complete yearly teacher evaluations ( due to sick, transferred or missing administrators)? Each administrator receives thousands of dollars in bonus money for completing evaluations. Is this district money well spent? Do the substitute administrators receive bonus money on top of a daily fee? Is the daily fee of $200 a day accurate? From what fund does this money come? From what fund is Glenn Singleton paid? I was under the impression that this highly paid consultant who was hired to sensitize employees to achievement gap causes had finished his contract before this year, yet I hear he is still employed by aaps. Where are all of these costs located on the transparency chart? There must be other expenses that the general public does not see, and I wonder if the BOE sees such costs. I am not the only tax payer who has walked into the Balas building and wondered if all the folks who work there, and there appear to be hundreds, are more valuable than 50 teachers or the theater tech around whom hundreds of parents are rallying. I have seen comments about too many assistant and deputy superintendents, and too many teachers paid to be part or full time district department chairs (different from building department chairs because the district chairs are released from multiple teaching hours or paid a 10% stipend). Do we have assistant superintendents who can either do those jobs or be released? In past administrations these district chairs were hired because one assistant superintendent could not handle all the State compliance requirements. Are those compliance requirements under control now that they have been in effect for a few years? These are questions that should be answered before cutting direct service to students.
Thoughtful
Tue, May 28, 2013 : 12:31 a.m.
Stop giving stipends- they just need to DO THEIR JOB!!! They are already overpaid. No stipends!!
Truth Hurts
Mon, May 27, 2013 : 9:18 p.m.
Dr. Emsayin, please verify your facts. I know one of the district chairs and they are released part time to do their work and they are not paid a 10% stipend, the building dept. chairs get the stipend. We need to stop spreading falsehoods and rumors that are not true. Please verify facts before posting.
Charles Curtis
Sun, May 26, 2013 : 4:59 p.m.
Yes it would be nice if the entire budget from last few years were made public so the general public could take a look, but that will likely never happen. Who knows what everyone would think if the actual facts were put out there.
Nicholas Urfe
Sun, May 26, 2013 : 12:24 p.m.
Someone needs to FOIA the credit and debit card use, and also the rules, guidelines, spending limits, and approval history, because the school district does not seem to be doing controlling their spending. And that "discretionary fund" sounds like a real a monster scandal that needs some attention.
Wake Up A2
Sun, May 26, 2013 : 12:10 p.m.
No principal layoffs? If you share them in the elementary buildings and go to two in the high schools you then save 1.5 million or better (15 principals laidoff). See if teachers, minions, and central takes a hit why no principals? That is not fair....
picasso46
Wed, May 29, 2013 : 11:52 a.m.
There are many good ideas around saving money that never see the light of day because of self interests. The irony is that kids are the customers in districts and their interests should always be served FIRST. Just sayin'.
Thoughtful
Sun, May 26, 2013 : 1:20 p.m.
Honestly, it depends on which principals you cut. Cut the few effective ones, with school sharing, and there is an even bigger mess. Would the newer ones be the first to go? Or the ineffective ones?
local
Sun, May 26, 2013 : noon
So teachers take 3% pay cut to save around 3.5 million, then we have 233 teachers pinked slip to try to make up another 4.7 million (50 positions and figure before insurance taken out), at a total of about 8 million on the backs of teacher towards this budget crisis. Something seems wrong here in my mind. The one thing that directly affects students EVERYDAY is the one thing being cut above all other things. We are wasting money on Scholastic computer programs, Danielle ask the district for money spent on programs like READ 180 through Scholastic and other programs like this. Our administrators and BOE with credit cards being used all around Ann Arbor on tax payer coin, with zero transparency to where the money is going. Teacher classroom budgets were cut in March, but Balas budgets weren't, why not? Once again, teachers taking hit because the BOE doesn't want to get serious about making cuts that might anger certain groups within the AAPS community. As the year winds down, I want to thank all the teachers out their for the work you have done this past school. Educators, in the classroom, are the rocks that hold this district together.
J. A. Pieper
Tue, May 28, 2013 : 11:20 p.m.
AAParents for Students, Not everyone is sold on read 180. A certain teacher you mentioned probably loves it because there is no effort to teach on their part! AAPS jumps into any new thing to try and help struggling readers, wait a little bit of time, it will be something different! Maybe the 300 unused Read 180 licenses are because many people recognize this is not the panacea certain people think it is! Also, the district did not order all the supplemental materials that support this program, and many teachers were frustrated because the only part of the program available was the computer part. I have heard teachers commentating about this all school year.
Thoughtful
Mon, May 27, 2013 : 8:59 p.m.
I think the point is not whether or notRead 180 is effective, but all of the licensing purchased but NOT used as pointed out by sh1 above. Could this possibly be 300 times $700= $210000??? What a waste if this is accurate. Whose responsibility is it to buy licensing? Fire them yesterday!
Ann Arbor Parents For Students
Mon, May 27, 2013 : 2:30 a.m.
READ180 is essential and changes kids lives. One of the reasons for READ180 is because many teachers were not teaching reading effectively to all learners. I know one kid that went up 3 levels in one year after struggling with a teacher who "knew best" how to teach kids to read or quickly handed out a tutors name for struggling readers. These parents went into mediation with the school district and found out that this special education teacher illegally withheld READ180 from their child. She told the district said no one qualified at her school. She just did not want to learn how to teach it and "knew best". Once this child was in Read 180, he went up 3 grades in 6 months and 6 grade levels oner the past three years. READ180 is a great program because it takes the teachers out of the equation and adjusts to the kid's deficits. Hard to mess it up. There are some great teachers who actually do a great job modifying the program to even make it better. Lexile scoring is a critical test for all students and this program has a proven track record in improving Lexile scores for most kids. Most kids in READ180 have IEP's (so this program is reimbursed at some level by WISD) plus I believe they READ180 software and materials were already purchased and there is no additional cost per year. Kids have to qualify for READ180 and read a least 2 years below grade level. I have yet to see a better reading intervention program. Talk to Chuck Hatt--the reading and social studies guy! He is the shining star in the AAPS Administrative team and fighting for making sure kids in this district can read and write. He is doing a great job.
sh1
Sun, May 26, 2013 : 12:40 p.m.
Danielle and the public may also be interested in knowing that nearly 300 Read 180 licenses went unused this year. According to the Read 180 website, each license, prorated, costs $700. It is an effective program, but why were so many more licenses purchased than needed?
dia
Sun, May 26, 2013 : 11:08 a.m.
Unemployment is funded through a payroll tax that goes into a trust fund from which benefits are paid so expense is effectively prepaid. -See http://www.esd.wa.gov/newsandinformation/factsheets/state-funding-sources.pdf
Basic Bob
Sun, May 26, 2013 : 11:26 a.m.
Here in Michigan, the law is a little different. A school systems is considered to be a "reimbursing employer". A reimbursing employer does not pay quarterly taxes to the UIA . But if unemployment benefits are paid to former employees, the reimbursing employer must repay UIA , dollar-for-dollar, for unemployment benefits paid out.
Topher
Sun, May 26, 2013 : 10:58 a.m.
Good, high quality teachers should be one of the top priorities for a school district. They are the most important factor in student growth and achievement (poor teachers can conversely have negative effects). Seniority, not effectiveness or quality of skills, is the determining factor in keeping/laying off teachers. For parents of high school students - you should be worried about increased class sizes. Already many high school classes are in the 30s (36 was my biggest class this year). This may work well for a lecture-based class, but not so much for discussion based classes that include one-on-one teaching of writing. Expect to see an even larger increase in class sizes at the high school level (since this is where AAPS/The Board is directing all of their cuts).
Basic Bob
Sun, May 26, 2013 : 10:25 a.m.
The cost of unemployment for a high-paid administrator is the same as any other worker. The maximum amount is $362 per week for 20 weeks. And only if they don't find another job. In any case it's way cheaper than their legal bills to terminate bad employees - I wonder how they budget for that! I wonder when they become eligible for unemployment benefits since teachers usually don't work in the summer and many choose to collect their pay throughout the summer. Also when does the district pay back the state?
SonnyDog09
Mon, May 27, 2013 : 1:41 p.m.
So, none of the laid off teachers will be able to collect unemployment until after their summer vacation is over?
tom swift jr.
Sun, May 26, 2013 : 12:53 p.m.
The district will be reimbursing the state on a quarterly basis.
Ann
Sun, May 26, 2013 : 12:32 p.m.
If teachers are laid off, then the remainder of the money owed them, would be paid in a lump sum! They aren't earning money in the summer as it is money already earned as you stated.