Wisconsin case illustrates the folly of making big financial commitments during school collective bargaining

Mar 4, 2013 by

NEENAH, Wis. – Wisconsin lawmakers took a major step in the right direction in 2011 when they approved Act 10, a law limiting collective bargaining privileges for public sector unions, including teachers unions.

But labor agreements from the bad old days before Act 10 continue to haunt school districts. A recent controversy in the Neenah school district is a perfect example.

A group of veteran teachers from the Neenah district is planning to file a class-action lawsuit to try to win back millions of dollars in early retirement bonuses they were promised through old collective bargaining agreements, according to the Milwaukee Journal Sentinel.

Under the district’s old early retirement program, many teachers who were hired in the 1990s were allowed to retire at age 55, provided they had at least 15 years of service with the district. Besides their regular pension, they were rewarded with 10 annual payments equal to one-half of the starting teacher salary in the district. That means each of them could have collected about $170,000.

In October the school board cancelled the program and future payments, replacing it with a much less lucrative program. Last week the school board rejected appeals to restore the original retirement package, according to the news report.

That means a lot of teachers who were counting on big bucks at retirement may be out of luck, unless they are victorious in court.

The school board didn’t pull back the money to be mean-spirited. It cancelled the program because it costs $5 million per year, and would have created an unfunded liability of $185 million over 25 years for the district.

That sort of money will be needed to instruct students, not to make good on foolish promises.

The teachers claim the district used the generous retirement program to lure quality instructors, and as a result earned high academic rankings in the state and nation. The teachers plan to seek $257,000 per plaintiff in the lawsuit, according to the news report.

“Injustice can only be avoided by enforcement of (Neenah Joint School District’s) promises and, at a minimum, compensating the teachers-claimants and class for their years served in reliance of (the school board’s) promise,” the teachers’ legal claim says.

Unfortunately it’s a promise that probably can’t be kept without leaving the district in a huge financial hole. The Neenah school board’s first responsibility is to make sure the students of today and tomorrow receive the instruction they deserve.

This case, sad as it is, is a good illustration of the insanity of collective bargaining in public schools. An early retirement program negotiated years ago continues to threaten the financial health of a school district in 2013.

Yet there are still school officials out there who believe the old way was the best way, and collective bargaining was somehow good for schools. Go figure.

via Wisconsin case illustrates the folly of making big financial commitments during school collective bargaining – EAGnews.org :: Education Research, Reporting, Analysis and Commentary.

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