Re: A no-frills day school
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Re: A no-frills day school

April 27, 2009 06:35AM
Allow me to put the matter into very specific terms.

In my school we have around 900 students, preK-12. Our salary budget
is around $10,000,000, or about 83% of our $12,000,000 budget.

An across-the-board 3% increase in salary, which is hardly huge,
translates into $300,000+ additional expense (the extra is the 7.65%
FICA and Medicare tax, about $23,000, which is a hidden factor but adds

Assuming a balanced budget (and even if not balanced, the cash flow
must be maintained), we need to find another ~$325,000 to cover the

Dividing that out over the 900 students means raising tuition by $360
per student. Factor in scholarships (and 20% scholarship is also not
unheard of) and the real increase has to approach $450 per student.

And this is just to give the teachers a 3% raise. We're not factoring
in overhead, programs, etc.

Cutting programs is enticing, as it can be lead to cutting staff
positions. But as others have mentioned, do we cut our social worker
or learning lab staff? The reality is that school staffs are
significantly larger than they were even a decade or two ago. We hope
that the additional staff improves our product. I would not risk
cutting the programs to find out.

One suggestion that I heard was to not give across the board raises.
There are certainly staff members, teachers and administrators, who are
earning well above what our parents earn, especially when looked at on
an hourly basis. Does everyone need an annual increase? While this is
not as difficult a matter as merit pay, which has yet to find a way to
judge the full value of a teacher's input into the growth of a student,
one has to wonder how we would decide who needs the money most. Do we
ask staff to justify their need for a raise, as we ask parents to
justify their need for a scholarship? I'm sure many parents would see
poetic justice in that arrangement - having teachers submit their
income and expenses to a group of parents for them to divide the fixed
pot of tuition dollars allocated to salaries. I'm sure there are some
members of our staffs where only one spouse works. When looking at
parental scholarship requests, we ask parents in similar situations why
they expect the school to carry the burden of supporting such a life
style; we expect that, barring exceptional situations, both parents
will be gainfully employed. Parents can justifiably turn that back on
us and our assumptions of fair salaries and the number of wage earners
in a family.

One answer given to this challenge is to increase outside funding.
That is easier said than done. Many donors are moving away from
general donations, preferring targeted giving to specific programs.
While this is wonderful for gaining gifts of equipment that are beyond
our reach (could we really afford smartboards for all our classrooms at
$4000-5000 a pop?), it does nothing to help the bottom line. And there
is not an endless supply of outside donors either. Many of the biggest
givers are hit up by a growing number of institutions, so that even if
actual giving goes up, each school gets a smaller piece of the pie.

Finding new donors is like searching for a needle in a haystack. If
someone has enough money for a big gift, chances are others know about
the person as well, or will in short order. And the really big gift
takes years to cultivate; it is rare to get a letter in the mail from a
lawyer with a multi-million dollar check from an unknown donor's
estate. The larger the gift, the longer the development time, the more
opportunity others have to approach the donor as well.

PEJE has tried to nudge schools into sharing costs where possible. I
think that statistics bear out that most day schools have less than 100
students. Schools such as these might be able to find ways of sharing
certain back office expenses: does each school need an executive
director? can schools share office staff? But mid-size and larger
schools have more than enough to maintain full-time executive
directors, controllers, maintenance managers, technologists, and social
workers. Joining with other schools just doesn't work.

The only real way to stop the inexorable creep of salaries is to cap
them. That way we know that there is a maximum salalry load that we
will achieve, within reason. This does not address newly created
positions to address student needs. But schools will set different
caps, or they will lure away a prized teacher by making a salary cap
exception. I am gaining a stronger appreciation for professional
sports owners and their problems with run-away salaries. And our
salaries are hardly exorbitant. Do we go to a system where we declare
"franchise" teachers and any school poaching one has to pay a penalty
or open its protected teachers to being approached by other schools in
return? And how do we balance less affluent schools against the more
affluent? And how do we decide on a cap- a per hour rate? What about
positions that are harder to fill? Is there one rate for language arts
teachers and another for science teachers? Do limudei kodesh teachers
get a preferential rate?

Reality also has to play a role. In searching for a new principal over
the past few years, I was struck that a thirty-something applicant,
without any experience as a principal, only some limited work as an
assistant principal, expected to earn over $175,000 in salary and
benefits. Where does that leave a school moving forward? And the
number of teachers we all have that are approaching or who have
surpassed $100,000 annual salaries is increasing. In the real world,
those salaries are not common.

I am not advocating for salary caps. I am just at a loss looking to
the future for a way to continue to make ends meet. The real world
work force does not have automatic annual increases. They do not have
a 10-month a year job structure. There is increased expectation that
jobs are not 9 - 5 any more. People stay at work until the job is
done, no matter how late it gets. And they give up weekends when
needed. And there is no extra compensation for work that has to be
taken home to be completed. And vacation days get eaten up by the
chaggim. These are, increasingly, the realities faced by our parent
body. And these have been the reasons we have given for justifying our
salaries (teaching is more than just classroom time, we do research and
prepare over the summer, etc.).

Charter schools, after-school programs and no-frills schools are not
the answer. The first two will wilt as soon as final exams and other
high stakes tests are encountered. Do we really expect the same effort
from students who are in a program that does not affect their GPA when
the SAT is a month away? We need to be realistic. No-frills schools
have other, external costs, as has been discussed already. The system
we have is the one with which we must work.

We need to be much more sensitive to parental fears. The current
financial crisis has actually given us that opportunity. Cutting costs
where possible, holding staff salaries in place, making a serious drive
to increase gifts from donors, and a minimal increase in tuition shows
that we are looking to spread the burden across all stakeholder groups.

That worked this year. My real worry is what to do if next year is
equally economically dismal. Where will we cut then? I have no answer.

Not for 2010-11. Not for further down the line.

Eliyahu Teitz
Subject Author Posted

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Eliyahu Teitz April 27, 2009 06:35AM

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