A forum for comments about Naperville news and issues.

Teacher compensation

| 214 Comments

Looks like this topic has life again. Just how much are teachers getting?

UPDATE UPDATE

Looking for the highest-paid teachers? Don't look in Naperville. Districts 203 and 204 don't even crack the top ten. Or the top 25. In fact, they barely make the top 100. So is Naperville a bargain after all? What do you think?

214 Comments

thanks,

the data there is different for 2011 than the data the suntimes had. I will try to run an analysis of the data for teachers who are listed at FTE = 1.0 both years using the ISBE base salary for 2012 and 2011.

-1

Try www.google.net or http://www.isbe.net/research/htmls/salary_report.htm

Does anyone have a link to the 2012 salary database? The familytaxpayer data was the same as the suntimes data for 2010-2011. I cannot find the 2011-2012 data anywhere.

thanks,

-1

All,

I’ve posted the August 20th District 203 BOE business meting on the Qe203.org website.


Major discussions were regarding the implementation of the new principal’s evaluation program and a short discussion prior to the approval to hire a person to run the new Career203 program which will, when implemented, be a groundbreaking system that replaces lanes with a system that will be more relevant for teachers professional growth.

I'll also mention in response to some comments here regarding D203's hiring practices, that it is common for D203 to hire freshly minted teachers, probably for budget reasons, if nothing else.

Thom Higgins

QE203.org


The answer is "yes and no".

By this, I mean 203 is heavily skewed toward long tenure and a lotta extra schooling (both brought more money).

So, as teachers retire with 25-30 yrs experience, 203 hires experienced, though less experienced, teachers to replace them. Many districts would bring in a new grad, or 2 yrs experience, to replace them, but since 203 is in such demand it becomes a sellers market and 203 has the advantage of being able to hire more experienced teachers as replacements.

How much in demand is 203? Well, teachers regularly come to 203 and forfeit several years of "payable experience" for the privilege of teaching here.

Just cuious, is the district hiring more teachers who are lower on the pay scale- less experience, etc.? It's definitely cheaper but not always wiser.

Yes, you might want to read your own post ......again!

I stand by my interpretation. You are pretty clear in your statement and you DO make direct reference to not being able to keep math and science teachers, than you say 203 could be losing teachers to higher paying districts.

For -1 and SOB,

You both seem intent on misconstruing my statement reproduced here:

”My experience talking to D203 HS principals over the years is they do struggle to attract and keep top performing teachers, especially math and science teachers that are in great demand always. I’ll mention that assuming our friend -1’s numbers are correct, this could well be part of the reason why 203 elementary/middle school teachers have longer tenure; the District could be losing some experienced HS teachers to better paying districts.”

I direct you both to the word ”especially” in the first sentence and the phrase ”could well be part of” and later, the word “could” in the second.
.

I am also entirely content with these comments regarding ACT scores:

”I’ll also mention that 203’s ACT scores over 30 years have shown a steady increase, even after 2002 when 100% of all students were required to take the test (it was 70% -85% previously), and the percentage of low income students went from 2% to 10% since 2002 as well. Test scores are only one data point and aren’t everything, but D203 and its students certainly deserve to be proud of this kind of academic achievement.”

And:

”And as I’m fond of mentioning there isn’t a higher performing district that spends equal to or less than 203, but whose students achieve higher ACT scores. Indeed, the few (districts) whose students do post higher ACT scores spend 37% more on average. A huge sum. For more information on how D203 stacks up to the top performing distorts based on ACT scores go to What is the best Educational Value in Chicagoland ?

”There is a lot for the District, students, parents and the community to be proud of here.“
.

In the five years I’ve done the analysis, District 203 students have achieved between the 4th and 6th highest ACT scores in Illinois and the District has always spent 30+% less than the average of the higher performing districts. In those same five years there hasn’t been a district whose students achieved equal or higher ACT scores than D203 but whose district spent less than D203.

Thom Higgins

QE203.org

So all of those elementary teachers in Darien (feeding into Hinsdale Central) and Kenilworth Winetka, etc.(feeding into New Trier). aren't being compensated as well as D203, so the students there are harmed?

And absolutely NO---learning does not begin at the elementary schools.

Learning happens to begin at home for the vast majority of students in D203 (and elsewhere).

-1

If you don't fairly compensate the elementary teachers, the kids don't continue their success on to the middle and high school levels. Learning has to begin somewhere, and that happens to be in the elementary schools. And being the unit district 203 is, all are paid equally.

I just read today's SUN ---- I am quite concerned about the article concerning the new 203 Superintendant and his involvement in the teacher/child incident at WAHS.

Per the article, it certainly seems that the best that can be said is that his actions were lackadaisical, and the worst that they were no better than those of the Penn State administration.

Uh, even a minor student of English would say it was you, Thom, who connected math & science teachers to leaving the district.


You wrote:
"My experience talking to D203 HS principals over the years is they do struggle to attract and keep top performing teachers, especially math and science teachers that are in great demand always. I’ll mention that assuming our friend -1’s numbers are correct, this could well be part of the reason why 203 elementary/middle school teachers have longer tenure; the District could be losing some experienced HS teachers to better paying districts."

You make direct reference to not being able to keep math and science teachers, than you say 203 could be losing teachers to higher paying districts.

Come on, man! Take accountability for your own words. Don't pull an Obama and blame it on me!

203 Is one of the handful (6?) largest districts in the state. Not only does being over the state avg by 2.8% (10% in instruction), represent big numbers, they are HUGE increases when you consider the expectation Of economies of scale.

As I said, test scores were getting slightly better, but you ignore the real point that 203, and Naperville before that,mhas ALWAYS been a very high performing district even at less than half the current cost per student.

Cut the ACT crap. ACT scores initially went DOWN when everyone had to take them. Since the scores are up a bit just like the state.

Let's go to the wayback machine...

http://blogs.suburbanchicagonews.com/newsblog/2009/02/you_pick_the_topic.html#comment-77581

Update from that post: State ACT average is 20.9, so up .8 since everyone starting taking it. D203 (using latest results) is up .9.

-1

Higgins wrote:

My experience talking to D203 HS principals over the years is they do struggle to attract and keep top performing teachers, especially math and science teachers that are in great demand always. I

Please justify that these teachers, especially math and science, are not being retained. How do you define top performing? Are you claiming that our HS principals think we do not have top performing math and science teachers? Or are you once again going write that you heard it from someone else.

-1

SOB,

I'd call 203 spending 10% more than the state average for instruction, but only 2.8% more for operations (which includes instruction costs) a real win.

If you want to talk about D203 costs from the basis of total expenses/enrollment, and compare them to the state average on the same basis, you are going have to calculate the same for 868 school districts before you can claim D203's number is higher than the state average of that calculation. Worse, you will need to locate all the feeder elementary districts feeding into the high school districts and find the costs on a weighted average attendance basis to have a number that’s relevant to 203. I suspect you will find, as I did when I did the similar calculation for OEPP of the top performing districts, that D203 is a real bargain.

I’ll also mention that 203’s ACT scores over 30 years have shown a steady increase, even after 2002 when 100% of all students were required to take the test ( it was 70% -85% previously), and the percentage of low income students went from 2% to 10% since 2002 as well. Test scores are only one data point and aren’t everything, but D203 and its students certainly deserve to be proud of this kind of academic achievement.


-1,

It was SOB who connected two of my comments to create the statement that you are questioning.

Thom Higgins

QE203.org

Seriously, nobody is concerned about the new Superintendant in 203 and the issue reported last night on CBS concerning the lax response to the "improper relationship of a teacher and a student"?

No one?

I understand that you limit the expenses in  your calculation to just operational expenses. IMHO this is not a good data point. 

The "total expenses" number is readily available for most other districts via their online sites (which is where I got the 203 data) and you can make the comps and yes, 203 as a "deal" deteriorates   a bit!

You might want to check your math! State avg instructional spending per student is $6773, v. $7500 or so in 203.  That's a 10% difference, not 2.8%!  I will also point out here that over the past 20 years, 203 has gone from an unbelievable "deal" to "slightly worse than the average spending" of a deal.

In other words, 203 is in a 20 year trend of deteriorating financial comps with the same to slightly better test results.

Let me close on what you might consider heresy ---- the spending figures as reported in Chicago magazine this month can be interpreted quite negatively for Naperville 203.

Why? Well, the argument can be made that 203 is not spending enough of their budget on direct instruction (think $7500/13000).  I, personally, would like to see that ratio closer to 70%.  In fact, I am a big fan of the 65% solution.

So, 203 still has a lot of work to do to even consider themselves world class. For now, it is a good district, even strong, that is a queen of the sows here in Illinois  and the U.S.

Turned a blind eye to the abuse of a student, allowing further abuse to another child.
Penn State? No...West Aurora HS. And who was the authority in charge at the time? Welcome to D203!!!

SOB,

I’m assuming that you are taking D203’s operating cost and debt service and dividing by enrollment. I come up with $12,831 per student on that basis, pretty close. This is not how the ISBE reports costs unfortunately, so you can’t compare this kind of calculation to a district’s OEPP as reported by the state.

For What is the best Educational Value in Chicagoland ? I use the OEPP (operational expense per pupil) specifically because it is calculated by the ISBE for all school districts, using the same criterion, and is readily verifiable. It’s also the biggest number available from the state. On that basis, D203 for 2011 was 2.8% more than the state average, and if you go back twenty some years, D203’s average for those years is just slightly below the state average. Pretty good considering that the few higher performing districts than D203 are regularly spending 30+% more each year. Heck, look at Lisle 202 next door. A smaller district to be sure, but they spend a whopping 47% more than the state average.

In sum, it is entirely fair and correct to say that D203 in 2011 spent 2.8% more that the state average and over a 20 some year period its average has matched the state's average for those years, based on the ISBE's calculated OEPP. You can do a different calculation of (operating budget + debt service)/enrollment, and get a higher number, but then you would have to do it for all districts in Illinois to be able to compare them fairly to D203. Remember, if you add in debt service, young districts like 204 with large amounts of debt would have some really huge numbers.

Thom Higgins

QE203.org

Certainly not good news for 203's new superintendent!

This is NOT a case where any pr is good pr.

Should he be dismissed?

Can you please justify the statement that Math and Science teachers are leaving D203 .. either to other districts or to the private sector.

-1

So what do Benet and Avery coonley teachers make?

A few comments:

First, using opinion based on the limited numbers used by Thom I would say 204 has at least an equal claim the the comment about "the best deal in Illinois"

Second, you might want to look at the data on the math/science teachers that leave 203.  You might be shocked to see how many are leaving teaching (thus rendering  useless your meandering and baseless speculation about losing them to better paying districts) to work in the private sector.

Third, I again encourage all to look at total  spending divided by total students.  this will render a much higher average spending per student calculation;

>>>specifically, the current budget per the 203 website puts the 203 average spending per student at almost $13,000 per student.
 
Finally, the comment "...However, they do this even though they spend just slightly over the state average per pupil" is a bit of a canard.  Even using the   limited "Instructional Spending" numbers, 203 is still 10% HIGHER than the state average, an amount I find to be more than slight.  If you use the total spending numbers, it is  even larger.

I mention all of this not as a disagreement we have a good (certainly NOT world class)  district, or that it is not a good  bang form the buck. It is merely to make sure we are not using propaganda to further agendas.

Both sides and the arbitrators use the conecpt of comparables and market to set compensation. I'm not saying that it's right, it's reality. Further, suggesting it's going to change any time soon is silly. We can debate it all we want, but it's not going anywhere.

I’ve a lot on my plate so as quickly as I can:

Illinois is unusual in that it has two differing structures for school districts. Unit districts such as 203 (as is typical in the rest of the U.S.) have a common K-12 pay scale. But we in Illinois also have split districts, with one or more elementary/middle school districts feeding into one HS district. Here, there is a fairly significant difference in pay scales with HS teachers making more than elementary/middle school teachers. This makes comparing districts fairly, tricky.

My experience talking to D203 HS principals over the years is they do struggle to attract and keep top performing teachers, especially math and science teachers that are in great demand always. I’ll mention that assuming our friend -1’s numbers are correct, this could well be part of the reason why 203 elementary/middle school teachers have longer tenure; the District could be losing some experienced HS teachers to better paying districts.

At Monday night’s meeting the BOE approved the hiring of a coordinator for a ground breaking compensation program that aims to make D203 a more desirable place to work at from a professional development standpoint. This is intended to be revenue neutral. The program will replace the lane component of the salary structure, and I hope the step structure as well. If this kind of innovative working environment can help entice top notch teachers to come here (and stay) this will be a very big deal.

I’ll also mention that when you compare D203 to the combined elementary and HS districts salaries, D203 is one of the top paying districts in Illinois. However, they do this even though they spend just slightly over the state average per pupil. And as I’m fond of mentioning there isn’t a higher performing district that spends equal to or less than 203, but whose students achieve higher ACT scores. Indeed, the few whose students do post higher ACT scores spend 37% more on average. A huge sum. For more information on how D203 stacks up to the top performing distorts based on ACT scores go to What is the best Educational Value in Chicagoland ?


Thom Higgins

QE203.org


La Cuc,

Unions negates the concept of "market" as you are trying to use it. The use of threats (ie strikes, sending kids home to say their fav teachers will be fired, etc) supersedes the free market, thus distorting it.

To -1's point, the fact that there are regularly 400-500 applicantsnfor any open position in 203 would indicate the pay, ON AVERAGE, is considered at nor above market.

Some simple math: what costs more - 1800 people being paid an average of $80k, or 200 at $125k and 1600 at, say, $45k

Minus,

On second thought, call 203 and ask what comprables they use for Union negotiations. I assume that both sides would have agreed to them and that an arbitrator would use them in a dispute. Hope that's good enough for you.

You may dispute their market, actually, I'm sure you will. But, that's the official market... unless you can get in there and change it.

Editors,

Your little newsflash slipped into the "subject" is quite inflammatory, especially since it is both incomplete and misleading.

If younger to join the fray, some data would be appreciated. How about you add in the average Teacher's salaries for the districts in question?

When looking at overall averages, I think you will find that 203 jumps near,mor at, the top of the stack especially when looked atnthrough the prism of the largest districts in Illinois.

Teachers in comparable districts. Including student test scores, class size, unit districts. Is that good enough? If not, I can try even harder. You people are making this into the most complex examination of compensation ever seen.

The teachers are in unions. School Boards, Unions and arbitrators use comparables to set compensation. Your arguments seem to be focussed on process and analysis. But, what is your point? If they are paid what the market pays, that's what it is. You want them at below market? Or a different market altogether?

The three cities mentioned in the article published in the Sun -- Burbank Summit and Oak Lawn. See if you can figure out which are high school and which are not.

Name: Avg Years experience/ Average Salary
all data from

iirc.niu.edu

Burbank SD 111 : 11 50000
Burbank (Reavis) HSD 220: 12.1 97000

Summit SD 104 : 15.3 60000
Argo CHSD 217: 13.7 101,000

Oak Lawn:

Ridgeland SD 122: 10.4 52000
Oak Lawn Hometown SD 123 : 11.9 64000
CHSD 218: 10.1 80000
CHSD 229: 10.9 88,000

Naperville:

D203: 13.5 78000
D204: 12.2 68000

So about those great salaries in those suburbs..only in High School. Last I checked, grade school teachers in D203 made about $2000 more per year than their NNHS NCHS counterparts -- mainly due to seniority.

D203 has no trouble attracting high school teachers despite the lower pay scale for HS teachers compared to other HS only districts, so the pay scale is clearly not a deterrent.

So why are we paying the grade school teachers so much? We pay more than Darien and Winnetka and Kenilworth and Glencoe. Jeesh!

-1

La Cuc:

Please explain "the market" that teacher pay is reflecting? This oughta be good.

-1

I have been following the blog, looking for the venom that inspires some to be so passionate about what teachers make, and don't see it. I think that Naperville schools are a bargain. The gym teacher and libarian pay scales are a different issue. I do agree that there should be some separation, as there is in most organizations. I think that teacher pay reflects the market. Like it, or not.

What numbers?

If you are referring to the garbage numbers of starting salary and max salary from the pay scale, then no apology will be coming from me. I eviscerated the argument of comparative pay scales previously. What the taxpayer pays is that pay scale with teachers placed on the grid ("scatter plot" in Higgins' words borrowed from Zager). If you placed the D203 scatter plot onto the D204 pay scale, the taxpayers there would revolt.

If you have followed this entire issue, you'd also know that the grade school teachers in D203 are *very* generously compensated, and the high school teachers do not fare as well in comparison to HS only districts. Yet people are lining up by the hundreds (per opening!) to get a high school teaching job in D203 despite this horrible inequity. If you are not upset about grade school gym teachers making $120000 and school librarians making over $100000, then I do not know what to say.

-1

I think if you you perform a simple task ---- take the total 203 budget and divide it by total students ---- you will get an avg costper student that's MUCH higher than those in the article.

Would Dan D. and Thom like to add anything?

After looking through the numbers it looks like Naperville schools are a bit of a bargain. Even with 6 or 8 or 1percent raises, districts 203 and 204 don't crack the top echelon in Illinois. It makes me wonder what the whole teacher pay hoopla has been about in Naperville. personally i think -1 and Dand and others owe the teachers in this town an apology.

Anyone read Juan William's article in the WSJ?

The most compelling, and scary, line was as follows:

"...but even parents in the best suburban schools are alarmed by the fact that the U.S. now ranks 30th world-wide in math, 23rd in science, and 17th in literacy."

Gosh, all that money is being well spent, eh?

Also, the Chicago Magazine article this month certainly highlights that Naperville 20 is a much better deal than Naperville 203, yes?

http://www.suntimes.com/data/14288435-666/illinois-teacher-salaries-how-school-districts-compare.html

See this site for the SunTimes data on Teacher's pay.

It lumps unit districts together with others, which is unfortunate (and and comps), which underplays the richness of the 203 data.

For Higgins:

You have some company in the NEVER EVER ROUND UP!!! ARGHHH!!!! camp like you told Mr. Zager when he had the audacity to round 4.76% to 4.8%, and that did not fit your narrative.

http://www(dot)medi(dot)fire.com/?za1192fzx3c13fc Page 46

From Yahoo news:

"White House: 8.3 percent unemployment? No! 8.254 percent!"

-1

Sounds like an excuse not to cut staff with declining enrollment.

Need to bring Leis back. When the principals of the Taxpayers Ticket challenged him to save 2%, he did. He prevented lazy principals from hiring teachers with 10 to 15 years experienced and forced them to mentor real entry level teachers.

And they cut the bus drivers salaries 15%, more than we EVER expected.

also move towards a teaching staff and administration that more closely represents the makeup of its students.

What does this mean? Please don't tell me it will be a lame attempt at PC!

Please DO tell me it means the number of employees will be adjusted to match the enrollment.

All,

I’ve just posted the July 16, 2012 District 203 BOE Business Meeting Recap on the QE203.org website.

Most notable is the update on the District’s diversity initiative. It is clear that District 203 has undergone a significant change in demographics in the last 10 years. This initiative demonstrates a major commitment by the District 203 board and administration to address these changes to its student body and also move towards a teaching staff and administration that more closely represents the makeup of its students.

I think anyone interested in public education in DuPage County should check out the book "Voices" that is mentioned by Dan Bridges.

I'll also offer the observation that there is a change in how the administration is making their presentations to the board under interim Supt. Dan Bridges, namely that board members (and the public) are given very specific timelines as to when specific tasks will be completed. There is a very palpable sense of a determination to carry out initiatives in a timely manner.

Thom Higgins

QE203.org

I've got to laugh.

You can lead a horse to water...

Yet the horse still wants us to drink the kool-aid.

The horse forgets you can only fool some of the people some of the time.

Higgins did not write:

For whatever reason, be it an honest misunderstanding of the data, or a willful misstating of what the data represents, I, Thom Higgins continue to be intent on claiming (incorrectly) that the data is something other than what it is. That’s my right, but let the record show that my characterizations of what the data means are simply wrong.

I just replaced -1 with Thom Higgins and spruced up the grammar a bit. I took the liberty to alter his quote as something he'd write as an admission, since the original quote has been proven to be completely false.

Signing out for a while since Higgins has shown an inability to admit and correct repeated errors. If he wants to keep incorrect labels for Lines 1-3 in the chart, he has been shown the truth.

And if anyone cares, my chart (called RAISE ANALYSIS) was to find the average percent raise, since that was the discussion at the time. That is nowhere on Higgins chart despite his desire to think LINE 1 has any comparative relevance.

Here's where it started:

Zowie!

and

http://blogs.suburbanchicagonews.com/newsblog/2009/02/you_pick_the_topic.html#comment-77052

-1

Mr. Higgins aka Black Knight,

Need I go through this blog and point out all of the times you said I was wrong or the truth I was pointing out was just my opinion.

It would be mighty long.

The fact that you cannot acknowledge

LINE 1 = Increase in Average Salary had everyone stayed

OR

LINE 1 = Increase in total salary had everyone stayed

is a sign of what you do not understand. That is sad. Very sad.

That is much simpler language than the very confusing and WRONG "Total average annual increase to compensation for incumbent educators between each consecutive year (1.)" By the way, that is not Zager's language.

Suddenly Vexed .. you mean back seven weeks ago on May 31 when I posted about the Q&A. Yep. Suddenly is certainly the word that fits it for you.

http://blogs.suburbanchicagonews.com/newsblog/2012/05/suggest_a_thread_1.html#comment-1542080

-1

Anonymous,

I completely agree they are two separate calculations and measurements. Both have their place, and I believe that and if you are interested in helping people understand the dynamics of teacher’s salaries as it relates to how much the District/taxpayer pays then you should discuss both.

As I’ve said before many times, neither -1’s nor the District’s calculations are perfect. I continue to be content that Overview of Teacher’s Salary Increases for Fiscal Years 2007-2011, is a fair-minded and worthwhile presentation of District 203 raises and salaries.

-1,

Quite an outpouring!

I talked to Dave tonight before the board meeting and asked him if he wanted me to change any of the wording for lines 1-3 of the analysis. His reply: No. We did talk about revising the structure of the question that you are suddenly so vexed about. When I have a minute I’ll send over some ideas to him.

So, no recanting, no sackcloth and ashes. Sorry.

Thom Higgins

QE203.org

I have no problem with LINE 3 as the increase in average salary or the increase in what taxpayers pay for teacher salaries. (NOTE: Not net cost of raises!). I have never had a problem with that number when appropriately described.

He is trying to give meaning to his chart which it does not have.

Mr. Higgins tried to use his LINE 1 number as a raise number he could plug in to see how much a teacher would make over a career. I think he has been disabused of that notion finally.

He also has deceptive information on his salary chart. These errors have been pointed out and rejected by Mr. Higgins. The truth is now known as I wrote earlier today.

By calling LINE 3 the what the taxpayer owes in raises, he falls into the same trap from years' past.

-1

Discussion with Mr. Zager this AM:

Yes, Mr. Zager did answer the Q&A as shown. However, he agrees that "raises" is the not the right word in the Q&A since that word is too specific and applies only to a subset of the teachers listed in LINE 3. The goal of LINE 3 is to show what the taxpayer pays in salary costs. The net increase in salary cost paid by the taxpayer is LINE 3. Not the net cost of raises. He gets it. The chart is about salary costs not raises.

-1 editorial comment: This may go back to the confusion between raises and increases by Higgins when he was trying to clarify something.

My interpretations of LINE 1and LINE 3 are correct with regard to average salary and what would have happened/what happened to a dollar of salary cost.

LINE 1 is not an average of anything.

Average is a NOUN in the description given by Mr. Zager in the Q&A for LINE 1 and LINE 3.

The prior two statements do not contradict each other.

Higgins, stop wasting everyone's time.

If you'd like, verify these statements at the next meeting you have with Mr. Zager. Please do not type to try to discredit them before that time. You'd be wrong. Again.

-1

FTN has been caught removing the names and salaries of those who have pay cuts

Quick job for Mr. Higgins.

Put in the filter 0 to .99

What do you know? Each and every year .. including those claimed to have not included teachers with pay cuts .. has teachers with pay cuts being included in my analysis.

The only year which looks any bit suspect is 2003-2004.

Try again.

Nice knobs, eh?

-1

Higgins,

You are really stretching.

A lot.

You will be brought back to reality tomorrow.

On years where it could be compared , the data list was IDENTICAL to the data list published by..wait for it... the sun times. I will assume they did not filter out people with raises. And as a check, I previously compared 2008 and 2003 salaries of people employed by the district in both years (again, NOT employed continuously) and got an average raise of 7%. [method: Power(Salary2008/salary2003,1/5) and averaged those.] The 2008 data is not in question. The claim is that the 2003 data is excessively high. Guess what that means with 2003 in the denominator.

Show me someone who is missing. All of the names and salaries are in my chart. note: alpha year over year might have a slight error in highlighting for people not showing up in consecutive years. That is irrelevant since that page is not used for calculations.

If someone is 100% and 9+ months, are they not full time? Why do you think I would begin to look at part-timers when I am calculating what happens to people working full time. How can I calculate total FTE when I have 1100 full time employees. Hmm.. let me think...

A few tenths of a percent. Oh like lowering your mortgage by paying a point? Gets you down .125% I guess we should ask mortgage companies to give us that for free, since it obviously as no fiscal significance to anyone. And it actually gets up to .375% in some of the years. Gonna get 3 free points on your next mortgage? Ah never mind. We'll just ask the teachers to take a few tenths of a percent off of their raises since there is no fiscal significance.

What is even neater is that Higgins is blind. I have average salary (ISBE) Average Salary of ALL of the employees 100% 9+months (yep..it's there), and average salary of those included in the analysis right there on page one. Get some glasses dude.

2010-2011 numbers were posted in a preliminary form in another blog soon after they were available. I checked last night and I had to edit a few things.

http://www(dot)mediafire(dot)com/?v7tv86bkt97gid1

unedited

Average % Raise was 6.25% 1999-2011 if that's the number you were waiting for.

and finally

You just do not get it.

Please review the correct usage of the words teacher, teacher's, teachers and teachers' and how those words mean different things and how those words refer to different populations in different places in the discussion.

The raises are paid to a subset of the teachers (those staying both years -- line 1 minus the fake raises). Turnover affects a different subset of teachers (retirees from one year and new hires for the next year). The net effect is LINE 3 for NET CHANGE IN SALARY EXPENSE. No matter how much you want to claim that the net cost of *raises* is found in LINE 3, you are flat out WRONG. That is the net increase in salary cost -- COST OF RAISES (one group of teachers*) MINUS SAVINGS FROM TURNOVER (a different group of teachers*). If each of the retained teachers decided to give us $100 back each, I'd be happy to net that against the raises and claim that raises cost us that much less.

It goes back to you not seeing that the chart is what happens to a dollar of payroll.

* = for this to match the chart, LINE 1 and LINE 2 would have to lose the theoretical raise for retirees. LINE 3 is unchanged.

I will post again tomorrow afternoon. Higgins, be prepared.

If you want to retract anything before noon, feel free.

enough for now.

-1

-1 and TH,

Why can't you guys simply agree to address "Total Distict Salary Expense" and "Average Teacher Raises" as two distinct and separate calculations AND measurements and move forward?????

-1,

I can’t help but smile reading your latest. You criticize me for looking at the chart as one of raises instead of salaries, and then immediately say the following:

”Line 1 Theoretical increase in cost of SALARY (which turns out to be raises)”

A few lines later:

(line 1) ”Cost of Raises”

Perhaps, mon ami, the chart really does have something to do with raises?

Anyway, here’s an olive branch. Would inserting “net” into my question make you feel any better? The question would then be: ” If a taxpayer is concerned with the actual net percentage increase in tax dollars paid by them for raises, which percentage increase represents that amount: Line 1. or Line 3?”

Thom Higgins

QE203.org

Please post this one. minor HYTML edit


Since -1 has been so generous with his time critiquing the Overview of Teacher’s Salary Increases for Fiscal Years 2007-2011. I will somewhat return the favor making a few comments about his latest statements about his spreadsheet and the spreadsheet itself.

Regarding this: “I took the published creditable earnings of all non-administrative certified staff”

Well, sorta. His “published” data is from the Family Taxpayers Network (formerly Champion) and includes approx. 1100 employees. That is not a complete list of all 203 certified staff which is more like 1300 (which are all included in the District/QE203 analysis). For some reason the ISBE doesn’t publish all of the salaries, and additionally, the FTN has been caught removing the names and salaries of those who have pay cuts, typically someone full time in one year and part time in the other (mostly maternity leave – a very common occurrence for a group overwhelmingly female and young). This looks suspiciously to be the case here as there are precious few with salary reductions. All this to say the list is incomplete. Not -1’s fault, but he needs to disclose that it isn’t a complete list and certainly shouldn’t be making any sort of claim using the adjective “all.”

Continuing, regarding this: ”.. .and had a raise between -20% and +20% (you can change those values but I wanted to eliminate the freak 20% raise in the early 2000s) to make sure we were not dealing with data errors.”

I note this is softening the clearly factually incorrect statement on his spreadsheet: ” The (sic) allows for filtering of flawed data reported by D203 to the ISBE or data entered incorrectly at some stage.” To both statements, well, no, he can’t solve for FTE so we have his filters. This is hardly to do with incorrect data. The beauty of his filter is you can “twiddle with the knobs” and get a wide range of percentages. -1 arbitrarily chose a +/-20% filter and acts like the percentages returned are the exact answer. They’re not. They’re his best estimate.

Lastly, for anonymous especially, all this sturm und drang, about the significance of whether one should use the sum totals of salaries for a group of incumbents or take the average of the individual raises, I will remind readers that the difference in -1’s spreadsheet is just under two tenths of a percent. If you want to get all worked about over a couple of tenths, hey, go for it, but I think it’s pretty irrelevant. Using the sum of salaries has actual fiscal relevance that -1’s calculation lacks. He feels his is a better gauge to compare ones actual raise to. Fine, but it has zero fiscal relevance. Clinging to the argument that: “we are talking about average raises so we can only look at the average of the individual increases for our answer," is simply an attempt to limit the conversation. Why?

Accordingly, I will gently criticize -1 for not including in his spreadsheet some discussion on the effect turnover. He can’t calculate it, but he can certainly post the ISBE average salary numbers and calculate a percentage increase, using it as a way to illustrate the difference. It would be much more informative.

Lastly, I ask -1 why he hasn’t posted the 2010-2011 numbers? The data has been available for a long time. If he wants to continue to post and comment about his analysis he should be at least minimally up to date, especially considering how he has criticized me whenever I haven’t updated things promptly. Btw I hope to have 2011-2012 numbers in the next two months and as I’m not extensively revising the analysis as I did this year, it should be a matter of just plugging in another column. I also ask he revise the time frame he is using for reporting his averages. Instead of 2000-2006, I suggest 1999-2008 that captures all of the more typical 6% increases that occurred prior to the last two contracts which are significantly lower. Leaving the three years off (1999-2007-2008) could lead some to think he is manipulating the analysis to report higher percentages, as adding in these three years lowers the average about two tenths of a percent (but gives a better picture of the time of the 6% raises)

Thom Higgins

QE203.org

p.s. As I am posting this I see -1 has posted a number of comments. I will simply offer as my response my prior comments here. I have faith that readers will grasp what is being presented in our analysis.

Quickie

Higgins -- you are interpreting Dave Zager's chart as that of one of raises.

Wrong.

It is a chart of salary costs. All of my prior comments are in that vein.

Line 1 Theoretical increase in cost of SALARY (which turns out to be raises)

Line 2 Savings of salary expense due to turnover

Line 3 Net salary increase NOT net cost of raises!!!.

You are making a basic first grade misinterpretation. Just because theoretical increase in gross cost is essentially raises (real and fake) that does not mean that net raises are line 3. Each of the three lines uses a different subset of teachers in its numerator. Basic math. Basic Basic stuff.

Anyone reporting it your way is deceptive to themselves and everyone else.

Nobody can misinterpret

Cost of Raises
Savings due to turnover
Net salary cost increase

To say what we pay in raises is LINE 3 is ludicrous and not accepted by any accounting method I know.

We can tangibly go and see real raises. we look at the paychecks of those present in both years and add it up. Real dollars. Right there.

-1

Higgins

I wrote:

LINE 1 : Increase in average salary had everyone stayed (WHAT THE TAXPAYER WOULD HAVE PAID IN RAISES)

PLEASE do not misread that like I think you are doing. The only reason I say WOULD HAVE is due to the fact that retirees' fake raises are included. Without the fake raises, the parenthetical comment would be DID PAY (provided we are dealing with "actuals")

It all comes down to how to you define SAVINGS. Is it actual prior year retirees' salary minus new hires' salary (in which case DID PAY is the operative phrase) or what the predicted retirees' salary minus the new hires' salary (WOULD HAVE PAID is what goes there)?

I truly hope you are not so dense as to think you have found some loophole in my statements.

-1

whatever

call it total cost. Same concept.

When there is a line specifically calculated as THIS and a question is asked about THIS, the answer is not THAT even if you thought THAT was the case.

I hope that is not too complicated for you.

fwiw, Interest could be seen as a negative deduction, but I won't clog your mind with actual details.

-1

Anonymous....relax.

Average % raise:

it is all here:

http://www(dot)mediafire(dot)com/?r4ix17y1itayb0f

I took the published creditable earnings of all non-administrative certified staff who were in the district in consecutive years working full time and had a raise between -20% and +20% (you can change those values but I wanted to eliminate the freak 20% raise in the early 2000s) to make sure we were not dealing with data errors. It will reject some real 20% raises, but there are no real 20% paycuts out there. As such this is a lower bound analysis. I found both a geometric and arithmetic mean of the salary multipliers. I also have a column where I add the sum salary of those identified above and did a year-over-year ratio (that was Zager's method..sort of). The geometric mean makes a bit more sense if we want to use the average multiplier as a career-type figure.

Part of the problem is that the Taxpayers Ticket (or Champion's) analysis from the past used sum total salary ratios, and that was recreated by Zager. That does makes some sense when looking at increase in average teacher salary, but, as has been discussed ad naseum, that has nothing to do with average % raise -- nor does LINE 1 of Mr. Higgins document.
.
.
.
Otherwise, I am just trying to make Mr. Higgins' presentation a bit more correct. There is no way he'll post my analysis, but if he can remove some of the bias and mischaracterizations from his sheet, I think we are all better off -- including Higgins.

-1

Quickly,

Thank you for your response. It will serve as a book end to my post immediately following. I think we have said about as much as we can about the issue, and the two posts will well serve to lay out our differing views.

A quick comment on your labeling; line 3 is incorrect. From the teachmefinance.com website:

”Net Price -- Price after all deductions, discounts, rebates, etc have been taken.

Thus, using “net” is appropriate in my analysis, but incorrect in yours.


Thom Higgins

QE203.org

We have doubled employee headcount in public education over the past 40 years, with only an 8 1/5 percent increase in enrollment, and testing versus the rest of the world has consistently fallen, and people actually wonder WHY we question salaries, pensions, etc?

Look, guys ---- it is a very, very simple concept:

You do NOT use group totals to calculate average individual raises!!!!!!

When the average person asks "What did a teacher in 203 get for a raise last year?", they do not want to hear an average of total salaries year-over-year. They want to know what the percent increase was, on average, for each teacher.

Simply put, the raises in 203 have averaged close tp 3x inflation for close to 20 years.

Next question?

Let's say we did an analysis of a bond issue.

We had three lines

LINE 1 = Principal
LINE 2 = Interest
LINE 3 = net cost

If there was a question "What is paid for principal" I think we would all agree that LINE 1 would be the answer. If anyone said otherwise, I would assume you would think they were crazy.

If there were a question "What is the net cost?" LINE 3 would be the answer.

This is no different.

Had your chart not had a line which was created to pick up what RAISES cost, then your answer would not be as much of a lie, but the chart is specifically designed to separate out RAISES, TURNOVER, and NET COST. To answer a question *which you set up* in a way other than LINE 1 is disingenuous at best.

If you look through all of the blog posts, you will see that nobody has misunderstood LINE 3 except you back before the chart was created. You thought LINE 3 was average raise.

The very simplest and truest and easiest labels are

LINE 1 : Increase in average salary had everyone stayed (WHAT THE TAXPAYER WOULD HAVE PAID IN RAISES)

LINE 2 : Savings from turnover (SAVINGS FROM NEW TEACHERS REPLACING RETIREES/NON-RENEWALS)

LINE 3 Increase in average salary after turnover (WHAT THE TAXPAYER ENDS UP PAYING)

The parenthetical comments can be removed, but they are there for you to better understand what the lines actually show. The descriptions next to LINE1 LINE 2 and LINE 3 are nonsensical at best.

You seem to want to ignore the genesis of this chart and try to cover for YOUR misunderstandings by saying LINE 3 is what the taxpayer pays in raises. This is flat out wrong and maybe an ego-protection mechanism or a bald-faced lie. I am not sure.

I am completely serious about the language suggestions. At first I thought it was just sloppy writing, but now I can recognize a pattern of not writing the correct words as a sign if misunderstanding what they mean. And not understanding the words leads to not understanding the implications of the calculations three years later.

-1 ( not close to edited)

Because I appreciate the constructive tenor of your last comments I’ll offer these thoughts:

I don’t think it’s a matter of grammar as much as we simply see things differently. The Q&A that you are unhappy about is a case in point. Using 5 year averages on the QE203 analysis, you want to say that the average increase of 4.62% represents the cost of the increases. OK, true enough statement in and of itself, but its usefulness is pretty limited.

We know that doesn’t mean the District’s payroll costs are going to increase by that amount. We know turnover (here 2.12%) decreases the costs to the District and thus we net out with a 2.51% increase in cost to the District, and thus we taxpayers. The table clearly lays all this out and there is a discussion of the dynamics (especially turnover) below the table. I believe that people are sophisticated enough to understand the significance and the interplay between the three percentages.

So I believe Dave’s answer that “The final percentage (Line 3.) represents the cost to the taxpayer” is perfectly acceptable when asking the question: ” If a taxpayer is concerned with the actual percentage increase in tax dollars paid by them for raises, which percentage increase represents that amount: Line 1. or Line 3?” Could Dave have offered a detailed discussion of the three lines before coming to that conclusion in his answer? Sure, but it would be redundant. Do I think it would be misleading to simply state that the cost to the taxpayer is 4.62% and leave it at that? Yes I do, but I suspect you will disagree. If you care to offer a statement on how you would answer the question, I’d be interested to read it.

I appreciate you setting “anonymous” straight that the numbers are not mine and that you have no problems with them, although I do struggle reconciling this comment with your many comments disparaging the numbers as outlined in my July 2nd post at 10:34 p.m.

Btw, for the record, the descriptions on the three lines are not mine. They did change a bit over time, which I will have to ascribe to Dave and/or Dan. I was busy writing the descriptions of the salary components and have no recollection of discussing or working on them with either. I think Dave and I could be convinced to modify line 1 a bit (although I doubt it would mean anything to anyone except you). I think you will have a hard time convincing either of us to change line 3.

Thom Higgins

QE203.org


Mr. Higgins,

A few suggestions. These are not meant to sound snarky. They are suggestions which may help you communicate the truth better. These are not nit-picky but they go to the heart of some of your apparent misstatements.

  • Learn the singular, singular possessive, plural, and plural possessive forms of the nouns you use. Recognize when it is appropriate to use each one. A good one to start with is "teacher".
  • Learn and understand the different forms of speech the word "average" can represent. Learn to recognize when each form is being used.
  • Learn some basic operations on fractions. For example 4/6 = (4/2)/(6/2) = 2/3. Each of those forms may encode slightly different information. Also review the concept of a common denominator.

(note: this previews as a list with bullets)

-1

Great short article in today's WSJ on pension accounting and the GASB changes.

Quick summary:

>Governments calculate pension liabilities using "risk-free" rates pegged to high-grade municipal bonds or long-term Treasurys.

>Since pensioners are basically secured creditors, thus pensions are riskless and therefore the liabilities should be discounted at risk-free rates.

>FASB requires corporations to discount their pension liabilities with high-quality fixed income assets

>GASB let governments stick with their desired, rate of return, which is typically about 8%. Public pension funds have returned 5.7% on average since 2000.

>Governments have resisted dropping rates because using lower discount rates would explode their liabilities.

>Like corporate America, governments will eventually elect to shift workers to 401(k)s to avoid reporting even larger liabilities as such defined-contribution plans are by definition 100% pre-funded.

Note the 5.7% return since 2000

Actually... I do not mind the calculations done by Dave Zager.

I mind the incorrect labels placed on them by Thom Higgins. I mind that Thom Higgins does not understand the basic algebra I have used in my attempts to give LINE 1 a correct label. I mind that he uses an intentionally wrong Q&A. He is not missing the forest for the trees; he is an ant in some weeds, thinking he is in the forest. I mind that he uses a straw man argument in his 2nd paragraph about CPI. There is a CPI argument to be made, but he decides to create a rebuttal to an argument which has no one has made.

However, he is pretty close to creating a cleaner sheet. It will get there, slowly but surely. It has been 40 months(!?!?) since he thought he had something to publish. Mitrovich has come and gone and Higgins is still struggling.

-1

Thom Higgins wrote:

blah blah blah

So do you think the Q&A is correct or incorrect? Do you think Dave Zager will be happy he is being quoted as such? I'd bet not. Just like before.

Why in the world would you continue to publish erroneous and deceptive information about what LINE1 and LINE 3 represent.

Facts (using the assumptions about comparing to sum salary the year prior and other previously mentioned assumptions):

LINE 1 is (a tiny bit more than) what RAISES cost.

LINE 2 is the savings due to turnover

LINE 3 is the net increase in total cost of sum salary

Saying that LINE 3 represents the cost of RAISES is EXACTLY the misunderstanding which led you to need to get this chart in the first place.

I will add more later but I do not want to dilute the post.

If you, for a minute, think it is being pedantic to claim there is a wrong answer in the Q&A that is at the heart of the chart, then you sadly miss the ENTIRE point of that chart. It is not the other readers here that I worry about being confused.

-1

-1,

Thank you for your latest post. It is wonderfully indicative of what is wrong with your complaints against Overview of Teacher’s Salary Increases for Fiscal Years 2007-2011. You’re so excruciatingly pedantic with your comments that, at best, you lose me and I suspect many others, as you are looking at the bark of a tree with a microscope, ignoring the fact that the reader would learn far more by looking at the forest. At worst, you are simply using this as a tactic in an attempt to discredit the analysis.

Just for fun, I’ll play along this time. Here’s my response: the percentage in line 3 is an accurate and preferable representation of what the increases in teacher’s salaries are ultimately costing taxpayers.

Now, let’s get out our microscope. I suspect your response will go something like this: The above answer is horrendously wrong. The percentage in line 3 is not an accurate representation of how much taxpayers are paying for salary increases because if we are asking what the raises themselves are actually costing, the savings from turnover cannot be used to reduce the percentage. The truthful answer is the actual cost of the raises themselves as represented by line 1 (if line 1 was a real number but, of course, we know it’s not). Oh, by the way, you can’t use my average raise percentage from my spreadsheet either because it doesn’t have any fiscal relevance, so don’t look there for the answer…

Ok, the last sentence is mine that I doubt you would mention.

More seriously, and for everyone else, the reason for the question in the QE203 analysis and Dave’s answer is so people understand what the actual costs are, meaning how much more are teacher’s salaries costing the taxpayer in real dollars and that is line 3. -1 will have to admit that payroll is not going up by the percentages in line 1, but rather is going up by line 3 (assuming that the FTE/headcount is the same). This is important because I suspect there are many in town who believe that if teachers get x% raises then the payroll goes up x% as well. The argument being put forth by our friend -1 will, I fear, help perpetuate that erroneous belief.

So, yes: ” The final percentage (Line 3.) represents the cost to the taxpayer.”

I suspect -1 will reply at length that we are not truthfully answering the question ”what is the cost to the taxpayer for teacher’s raises,“ but instead answering the question “what is the net cost to the taxpayer when you add in the raises and subtract the savings due to turnover.”

My only additional comment is that this Q&A is part of a 2400 word analysis that clearly outlines in a table, the incumbent increases, the savings due to turnover and the net difference the taxpayer pays. There is plenty of context here for the reader to read and understand all the dynamics.

Lastly, as readers of this blog know, I grow weary of all this. I answered -1’s latest question because it was such a perfect representation of his “global” attitude toward the analysis. Don’t expect much more of this, and I will let -1 have the last word.

Thom Higgins

QE203.org

I repeat

-1 dislilkes the misleading and numerous salary calcs by Higgins because they mislead to the point of being an absolute lie.

Simple fact: calculating the change in overall salary, in aggregate, is NOT a calc of either the average raises OR the individual raises in 203!

It is a misdirection, at best, that masks from the taxpayers a large portion of actual raises with the overall benefits of employee turnover.

Higgins keeps miscalculating and miscalculaing, year after year after year, in the exact same wrong way, and each tme he expects us to accept his folly.

That, my friends, is the definition Einstein was looking for!

Pension payouts from the TRF are outrageous. They exceed any actuarial expectation.

Parents who believe excessive pay, benefits, and pensions are needed for quality education need to pay a tuition to help cover the cost of teachers.

Payouts which eventually exceed any salary paid before retirement, are irresponsible.

In summary the pension plan can be summed up in one word, THEFT.

A request for a commitment from Mr. Higgins to the truth:

from the QE203.org document Q&A section

Q. If a taxpayer is concerned with the actual percentage increase in tax dollars paid by them for raises, which percentage increase represents that amount: Line 1. or Line 3?

A. The final percentage (Line 3.) represents the cost to the taxpayer.

This answer was supposedly supplied by Dave Zager. I have a request for him to be sure those are his words to that question. The Q and A seem to be somehow dissociated or the A is lopped off. In reviewing some of the blog entries of the past few years, I have seen Higgins try to use such wording incorrectly. Yes, I could endlessly link to it, but why? If Zager truly believes that LINE 3 represents the dollars paid for RAISES , he needs to find a new job.

So...Mr Higgins..do you believe the above Q&A to be correct? Hint: it is horrendously wrong...and the correct answer is none of the lines supplied but it is closest to LINE 1 (in fact, it would be line 1 without the fake raises if we are assuming that "increase in tax dollars" means compared to the prior year sum salary since that is the common denominator for lines 1 2 and 3).

Dollars to donuts you do not commit or you commit to the wrong answer.

$100 to NEF if you actually commit with reasoning and the reasoning is not anywhere close to "uh..Dave Zager wrote that so it must be true."

Readers please note that this was added in to the Q&A after Mr. Higgins removed some other incorrect language from the Q&A which appeared to be from Zager but was not.

This is the same error Higgins claims he made when he thought average raise was 3.5ish %.

-1

p.s. Once again, believe the anonymous blogger who sends anonymous emails

A brief reply to Mr. Denys latest:

My understanding is that pension funds with an 80% or greater funded ratio at a given point in time is an accepted indicator of a pension plan’s health. We need to remember that a funded ratio is a single moment in time percentage that indicates the degree to which a fund is on course to meet funding requirements in the distant future.

I will repeat my comment that if the state had paid what they owed when it was due, we would have saved a ton of money (interest) and the system would be not be considered in trouble at 77% funded ratio. Would it be reasonable for the TRS consider some minor course corrections in the future even if the state had paid? Sure. But the problem would be infinitely more manageable.

It would be interesting to know if Mr. Denys agrees that the state’s unfunded liability is largely interest as they haven’t paid in the required payments over decades, and they are required to pay interest on any shortfall in addition to the missed payments? If not, what is it?

I note that Mr. Denys admits he could not find a source to confirm his statement that ”teachers would have to have 20 to 25% of their salaries withheld to fund their benefits.”

Since he can’t provide a source for his claims, his fallback position is to claim that the TRS’ numbers can’t be trusted either, as it’s ”controlled by the teachers.” Perhaps Mr. Denys can provide some documentation that shows how teachers control the TRS and, even better, that the TRS’ financial reporting is in anyway suspect. He might want to consider that the TRS works with the actuarial firm Buck Consultants who does an annual report on the TRS. Is he claiming that Buck’s numbers can’t be trusted as well? They are also audited by another company annually.

I suspect the TRS would jump at the chance to have the state make their past due payments and accumulated interest and make a fixed payment going forward. It’s probably a hugely better deal than what they will probably get (absent a successful legal challenge).

It is disingenuous to compare SS with pensions. SS does not use investment returns as part of their calculations. Pensions, of course do. It’s an apple/oranges comparison.

Lastly, I believe it was the Illinois Policy Institute that recently claimed that 70% of school districts pay the pension contribution for its teachers. The report was widely criticized because they incorrectly listed districts making pension contributions that don’t. D203 was one of many that asked for a revision as they were incorrectly listed as making payments. I will note that D203 does make its administrators payments to the TRS on top of their salary.

Thom Higgins

QE203.org

Dan D wrote:

7. As noted on the Champions, over 70% of teachers ARE NOT contributing to their pensions, the payments are being paid by local school districts with no taxes paid.

Dan, I think this is where everyone is missing the bigger picture. Even when the TRS is taken out from the paycheck, it is untaxed. So comparing what is taken out for SS which is taxed to TRS which is not taxed is not a purely fair comparison. And the SS contribution by the employer is not seen as taxable income. Just like the state contribution to TRS is not seen as taxable income.

And when benefits come due -- no tax on TRS or SS in Illinois. So TRS is never taxed.

But teachers will hear none of it as the union is in their ear about how unfair it is compared to SS (YOU pay 9%+ while SS only pay 6%...).

It really does not matter if a teacher gets X+TRS as a paycheck and has TRS taken out pre-tax or gets X' as a paycheck and the district picks up the TRS. There are several districts who have contracts explicitly mentioning salary with TRS and salary after TRS.

-1

Higgins wrote about LINE 1

blah blah blah all over the map

Here's the problem:

You cannot see the equivalency of what I have written. Hint: LINE 1 and what it is *exactly* depends on whether it is done as a prediction or an "actual" which is still theoretical.

Once I get answers I will post them. I do not need Zager to tell me anything since his calculations are exactly as I outlined almost 18 months ago.

You just be very blissful.

-1

Social Secuity actually takes a bit over 12% --- we need to include the employer's portion as A) it would be available for wages if it was not going to SS, and B) the self employed (ie small business owners) pay that plus!!

My "faulty thinking" is clearly outlined in Mr. Higgins post.

1. Mr. Higgins said that if the state made all of its funding, the plans would be 77% funded. WHOA! That is not fully funded. Since we are in the 40's (or whereever), that means that the state should have at leasted doubled its funding.

The extension of this analysis is that employee contributions would needed to be increased to make up the 23% shortfall. At least double their historical rate using numbers comparable to the state share. Does this point to higher withholdings?

And remember, the state defers all of this contribution calculations to the pension plans that are controlled by the unions.

2. Besides the increase in unfunding over the past 20 years, the increase in benefits particularly no control on end of service increases and early retirement benefits have proliferated. I think TRS notes a hundred changes. And you can count that until recent changes, none of these reduced benefits!!!

3. READ THOM. The constitution "guarantees" BENEFITS, it does not "guarantee" FUNDING. Again, this is murky.

4. The legistlature could fund the ENTIRE SHORTFALL through increased employee contributions. If this option were elected, my 20 to 25% number is way to low.

5. I quickly scanned the web for articles on the allocation of funding between teachers and the state. Could not find one. We do have a study by New Jersey that points out the huge benefits received by teachers reletive to contributions.

6. Analytical truthfullness. Social security takes 6% compared to 9% for teachers.. But teachers pensions are at least three times social security benefits. Does this support 9%?

7. As noted on the Champions, over 70% of teachers ARE NOT contributing to their pensions, the payments are being paid by local school districts with no taxes paid.

8. TRS is NOT an objective source, they are controlled by the teachers with OUR money. Why not create a union pension plan where the state provides a fixed contribution and the teachers have to deal with the details?

Once again, Mr. Higgins is repeating the teacher line. I think that there are viable plans being put forth and the teachers do not like them. So out comes Thom!!!!!!

Mr. Deny’s logic is faulty. In a recent conversation with D203’s CFO he indicated that 20% of what the state is paying (or is supposed to be paying) towards the pensions is the normal cost of the pension. The remaining 80% is interest on missed previous payments (I'll assume the missed principal too). The state has for so long, and for such large amounts, not paid into the system that the interest is killing them. So, yes, when Dick Ingraham of the TRS, or others, say the system is unsustainable, they are correct. The state has dug themselves into a hole so deep they can’t (reasonably) tax themselves out of it and the interest on the missed payments continues to grow. This does not mean that the teachers have not paid their appropriate share or should pay more. As I stated previously, had the state made their normal payments over the years, in 2000 and 2007 the plan would have been 100% funded based on rolling 16 year averages. Today (6-2011 numbers) it would have been 77%.

Now, if actuarially the normal contributions by both parties were found to be insufficient to pay the benefits for any number of reasons, then yes, either contributions would have to be increased or benefits cut. But, we are so far from a system where both parties have made the required payments, that this is somewhat beside the point.

I’m not sure what Mr. Denys is saying here: “The state constitution has a murky mandate on not changing pension benefits; the unions wanted a constitutional convention to make the provision stronger.

In 1970 the constitution was amended to state that membership in any government worker pension or retirement system "shall be an enforceable contractual relationship, the benefits of which shall not be diminished or impaired." The unions were interested in adding this language even back then because the state had previously skipped payments and it was only 40% funded in 1970. One question I have is how the fund remained solvent for 42 years if they were so upside down then. My only guess is the state anted up when they had to. Regardless, the provision is widely held by legal scholars to be quite enforceable, although there are some recent attempts to poke holes in it. As I have repeatedly said, I think all this will be ultimately decided by the Ill. Supreme Court.

Lastly, Mr. Denys seems to be up to his old tricks; making claims out of this air. I again ask he document a legitimate source that claims teachers would have to have 20 to 25% of their salaries withheld to fund their benefits.

Thom Higgins

QE203.org


A reminder. No blogging with yourself.

I am thankful for one thing, that Thom Higgins did not meet Jim Jones, since we would not have an extremist to address.

1. The underfunding of TRS was not simply the state, it was both parties. So if funding needs to be tripled, wouldn't that mean the 9.45% should go to 29% if both parties were to triple their funding.

I can smell the Kool Aid coming. But only the states missed its funding. Well TRS stated that they achieved their 8.5% return, then the shortfall is a function of inadequate contributions. Now a dirty secret, it use to be represented that the employee and the state were to match funding (50/50). However, the mechanism that the state picks up all of the shortfalls defeats this objective. And the costs of the benefits that have been added in the last 25 years outstrip the increase in employee benefits.

There have been articles (not on TRS, remember, this organization is controlled by the teachers) that note a doubling of both the teacher contributions and state contribution would not be enough. I do not clip every article, but INDEPENDENT PARTIES have noted major increases in pension payments.

2. Early retirement, I think police and firemen are at 50. But again, if you take a benefit ten years earlier, you are going to collect it for ten more years. Typically, a benefit 10 years earlier would be 50% of the normal retirement amount. Not in Illinois public pensions. This abuse is the second largest cause of the deficit, the largest being the 20%/6% retirement enhancements. Better yet, pensions should be based on lifetime earnings, not the best four years. Just like Social Security.

Just like people are calling for clawbacks of JP Morgan overpayments, we should be seeking taxes to effect clawbacks on retirees over $100,000.

3. Sure, IMRF employees are in Social Security. But costs and benefits are calculated based on the combinantion of the two. And the state funded portion of the plan is fully funded. What are you trying to say? (notice I do not call you ignorant like your new buddy) The combined benefits are still lower, but actuarially sound.

4. On bankruptcy. What did the TRS director say? Benefits might have to be cut. The state constitution has a murky mandate on not changing pension benefits; the unions wanted a constitutional convention to make the provision stronger. But it does not mandate that the legislature fund the amounts.

And I am impressed with the Democrats who say "If you don't agree to pension changes based on the constituion, then we are going to take away retiree health benefits that are not part of that guarantee." Too bad they did take that stance for the last 25 years and maintained a system like IMRF.

I think not, young TH.

The new rules & regs require the changed, lower rates to reflect the realities of economic returns, not the amount of pension shortfall. Even at 90%, the rates will still have to be lowered to better align with reality.

Will it make a diff when the two sets of numbers come out?

Absolutely, as more and more "non-public pension" people will be made even more aware of the extent and richness of the pensions, the state of their State's finances, and the corruption of their politicians (a twist on Ike, "beware the union-government complex!").

Let's all face the facts on public pensions: Public Pensioners are the true 1%!

Dude:

If the state had made its required payments over the years (leaving the TRS 77% funded), they would not be required to use the lower rate of return based on muni’s. They could continue to use their own rate of return and they could continue to report strong funding. If they reduce their assumed rate of return down from 8.5% to something in the 7’s then the 77% will drop a bit), and of course we will have 6-30-2012 numbers soon.

I’ll be a bit heretical here and say that the new required reporting of a lower percentage of assets based on the lower assumed rate of return, in the end, doesn’t mean all that much. Although it will be grist for the media to write a bunch of new articles.

What’s important is the actual rate of return, how much money the state contributes (or not), and any changes to the assumptions (like benefits). Chez What? is correct that the pension funds will be running two sets of numbers.

.

A few thoughts on Mr. Denys last post:

1. As I have repeatedly stated the philosophical basis for Lines 1-2-3, and the data itself in Overview of Teacher’s Salary Increases for Fiscal Years 2007-2011 is supplied by the District, using its Position Control database. All calculations are by the District. They are not my numbers as Mr. Denys states/implies, nor have I fiddled with them in any way.

2. Both IMRF member contributions and benefits are lower because they also pay into SS. So does the employer btw.

3. Mr. Denys is claiming that for the TRS to meet the IMRF’s level of funding then teachers would need to be contributing 20-25% of salary. Can Mr. Denys supply a credible source to back up these numbers? I don’t think so. Mr. Denys, source please?

4. Mr. Denys is incorrect about retiring at 50 with full benefits. Per the TRS: The earliest a member can receive a retirement benefit is at age 55 with 20 years of service. The maximum benefit is 75 percent of the average salary with at least 34 years of service credit.

5. Lastly, I’ll offer the opinion that Mr. Denys oft mentioned idea of having the state go bankrupt as a way to break its pension obligations isn’t particularly helpful, or likely.


Thom Higgins

QE203.org

Hey, all!

I caught the Trib article this week on the new GASB changes tp pension reporting, and it was NOT flattering to Illinois or TRS.

The following really caught my eye:

"The situation is especially grave for Illinois, the state with the most poorly funded pension system. Just how poorly funded, though, will smack taxpayers in the face when these new rules take effect next year. Example: The Illinois Teachers' Retirement System says it has assets to cover only 46 percent of its long-term obligations to retirees. But a study by the Boston College Center for Retirement Research says that under the new rules, TRS in 2010 had assets to cover just 18.8 percent of its liabilities.

Yes, that's the same TRS that in April warned its more than a third of a million active and retired teachers and their beneficiaries: "Preventing insolvency may include significant changes for TRS — new revenues must be generated and if they are not, benefits may have to be reduced." Starting, that is, with payments to educators who already have retired. Many retirees are in an understandable fury."

Understanding that return rate is being forced downward means that even if funded at 77%, there would still be a large downward adjustments to the balance and a corresponding increase to the underfunded balance,

As you can see, Illinois os in trouble no matter how you look at it!

As far as Senator Lauzen's attempts to reduce future benefits for the bulk of actively employed teachers who were hired before the Tier II pension revisions were enacted for new hires, I can only say that the alternative might be bankruptcy and the loss of the entire pension. It is easy to pretend the state constitution does not allow it, but once challenged in court economic reality would take the day.

JOMO


A couple of excerpts from the WSJ concerning the new public pension accounting rules:

>"Under the revised rules, pension officials will have to measure assets based on market values, which could cause numbers to swing from year to year."

>"...many pension officials plan on using two sets of numbers when calculating pension obligations: one for official reporting purposes and another to determine taxpayers' pension bills. GASB's new rules would allow that"

>"GASB's new rules would force underfunded plans to use a lower rate for some of their obligations. But the overall government rate wouldn't be as low as the 4% to 5% rate that corporate pension plans use."

The simple view is to understand that TRS will be affected as the current, and economically unsupportable, return rate will be dropped for reporting reasons. The underfunded shortfall will increase, probably by about another $7 to $8 bil. Of course, this will not affect benefits at this point. it will serve to let voters know the real shortfall, the real emergency, and help drive more reform.

Some quick points.

1. I must have had at least three posts lost. What is going on?

2. Is it two or three years since I provided the initial draft and Higgins is still trying to tweak the number so that generous salary increases are lowered? They are what they are.

3. Pensions. Much can be said. The basic flaw is that the State abdicated the management of the pension plans to the beneficiaries. And their answer is more state funding.

Working in the government arena for over 35 years, this topic has been the most misrepresented issue. First, look at the good. IMRF is fiscally sound and nearly 100% funded (they break the funding down to municipalities). Simple reason, all employees are forced to be in Social Security (that funds 30% of retirement costs and makes such employees eligilbe for Medicare), have total benfits that are 30 to 50% lower than comparable teachers, police or fire pension plans, and they were forced to fund the plans.

The key feature, the local governments could AFFORD the pension funding.

In contrast, these other plans kicked the can down the road. Their members demanded benefits that employers (State for teachers, municipalities for police and fire) could not afford. When they had no retiree health care and could not purchase it in the market, they demanded to be covered.

Yes, the state did not fund their share, but nor did the teachers. If the IMRF model of funding these lucrative pensions were used, teachers would have to have 20 to 25% of their salaries withheld to fund the benefits. So at 9.45%, they are not paying their fare share.

Take one benefit change. The ability to retiree at age 50 compared to 65 AT FULL PENSION. Had they worked 30 years, they paid in enough. But the pension plan had not earned enough. Most pension plans allow you to retire early, but at substantial discounts (30 to 60% lower payments).

So roll all of the benefits back to the 1994 level and do over. For those receiving these higher pension benefits, tax them at 5% and earmark those taxes for pension relief.

Lastly, the Madigan plan for transfering the funding to the local schools does not require tax increases. The first five years, a payment based on a percent of salaries (initially one percent) will be implemented. Simple solution, teachers salary increases reduced by a corresponding amount. Since their salaries are one of the few that have held up during the recession, this is a small concession. Alternatively, increase their contributions to 25%.

Better yet, let Illinois go into bankruptcy and see how much the pension plans get in a reorganization.

Sam,

I didn’t mention the state raising taxes because my sense is there is less than zero interest by legislators for any kind of state tax increase. So we get trial balloons to push the burden onto the SD’s without the ability to levy for it, which I believe would morph into allowing districts to levy, but then that’s their tax increase not the states.

Alternatively, you have Senator Lauzen recently trying to reduce future benefits for the bulk of actively employed teachers who were hired before the Tier II pension revisions were enacted for new hires. His plan (broadly) is to stop the “gaming” the system by some “outliers,” making 62 the retirement age and reducing the COLA from 3% to 2%. All this so the state can conveniently not have to raise taxes, or meet its prior funding obligations. A little snark there, sorry. His plan in not necessarily a bad one, but I believe it will provoke a legal challenge.

A few more comments on pensions:

I hear from someone who’s knowledgeable about the TRS that the GASB (government accounting standards board) has recently put into place new rules for public pensions and their assumed rate of return. This is going to be great fun for public pensions (not!). To illustrate the new rules, I’ll use the TRS as an example.

As you know, had the State of Illinois fulfilled its actuarial contribution requirements the fund would be 77% funded. Had they done so, under the new rules, nothing changes. The TRS would be allowed to continue to use their assumed rate of return. This btw will be how the IMRF (Ill. Municipal Retirement Fund) will continue to report, as they have made all actuarially required contributions.

But, as we all know, the state hasn’t made all the required payments, so now the TRS will be required to use the 10 year AAA muni-bond return (this is from memory) currently in the 3-3.5% range for its reporting. This will take their percentage funded from 46% to probably in the 20% Range. Lovely, just lovely.

I’ll also mention that there is talk of the TRS reducing its assumed rate of return from 8.5% to somewhere in the 7% range. My understanding is they will continue to use this percentage as well as the new mandated percentage in their reports.

My last pension comment is I was told that the new hires on the revised pension plan (work to 67 and I forget the rest) are still paying 9.4% into the system although actuarially they could be putting in less per the actuaries. So, they are subsidizing the current retirees and those that will (we assume) retire under the old system.

State Education Funding:

Quinn has signed the FY2013 education budget and it’s a bit of a shocker. For the first time in memory he has significantly reduced funding compared to the prior year. Total education revenues are down $212.3M, GSA (general state aid) is down $161 million, even though there is a $91M hike in the GSA Poverty Grant Line. Special Ed-transportation-free breakfast/lunch was reduced $25.6M and early child ed was cut $25M. None of this impacts D203 all that much because we get comparatively little from the state.

The ISBE has been looking for funding the last few years for training to help districts comply with PERA the new evaluation system for teachers and principals that the State enacted recently. Quinn zeroed out all these requests. This is one of the real worries about all the reforms that have been enacted, especially the revised ISAT’s that will bridge to the new PARCC assessments. If the state doesn’t fund this it ain’t going to happen. This is going to be a mess.

.

Lastly for -1, everyone else can skip this:

I guess an email is better than nothing. I hope you had the grace to not do it anonymously as was the case with your previous contacts. It’s a bit classless to not even give your name.

Anyway, if we are to suddenly talk about ”recanting” (such a powerful and emotive word!) I’m wondering if your “ final answer” is now ”LINE 1 is increase in average salary if everyone stays.”

I ask as you have been a bit over the map on what Line 1 is. The following are all from this thread. Are you "recanting" these in favor of the above?

PRESUMED % increase in average incumbent salary if nobody left.

Mr. Higgins' % increased in a theoretical average salary if everyone stayed (and we did not allow theoretical lane changes) and we gave an undefined raise to those who were already off the scale who happened to retire instead

Line 1 is the theoretic percent increase in total salary if everyone who retired stayed and there were not new hires.

it is clear that LINE 1 as calculated by Dave Zager is a purely theoretical number

How dumb does it sound that I keep bringing up theoretical raises for retired teachers to help explain Higgins' chart. If you want a voodoo number, thar she blows!'

LINE 1 is certainly not averaging any ratios or raises or anything. It is (indirectly) a ratio of theoretical averages. There's a winner

Please explain how LINE 1 represents an average of anything. You keep calling it that. My view that it does not represent an average is not an opinion. It is a numerical fact. It also represents a theoretical value -- even when calculated as an "actual"

I could accept LINE 1 as "(theoretical) Increase in incumbents' salary" Note the loss of average and the change of the apostrophe. So this is would be the increase if everyone stayed. Note no "average".

Although a fake raise for the retirees is technically needed for lines 2 and lines 1 to be correct, I am not particularly concerned about that as far as the big picture goes and how LINE 1 is mislabeled and is being misrepresented.

Line 1 = sum of all raises (including presumed for the retirees) divided by last year's sum salary.

One of the problems reading your posts is you are all over the map. It’s a wee bit hard to know exactly what your position actually is.

Thom Higgins


QE203.org


Thom,

You're right. Demonizing wasn't the right word.

My point is that when you mention putting the burden on local districts, you raise the alarm about higher property taxes -- to which most people are opposed. What you don't say is that the in the alternative, the state will have to raise taxes of some kind if the state is going to pay.

There is no free ride. If benefits are not reduced, taxes -- state, local or both -- are going to have to be increased. Not raising local property taxes just means some other tax will be increased and I still think that taxpayers will be better served in the long run if the costs are borne by the districts where they are incurred.

-1 wrote:


Clearly missing the point of having the employees feel some pain when unexpected costs get shifted to any employer.

Not necessarily. It's quite possible that both D203 employees and D03 taxpayers might have to share the pain, which is only fair, since both contributed to creating the problem.

Gonna agree and disagree with Mr. Higgins.

I think he has clearly seen how the districts will get socked with pension cost and has not been saying anything unreasonable about that. No demonizing as far as I can tell.

Except his solution...

, it's going to put a huge strain on many many districts unless they are given the ability to levy for the amount.

Clearly missing the point of having the employees feel some pain when unexpected costs get shifted to any employer.

Again, out for a while.

I did send an email to Dave Zager about some loose ends including a very unlikely Q&A question-answer set. When I did that before, Mr. Higgins cleaned up his sheet. We'll see what happens this time. He's out until July 7 so I will follow up when he gets back.

Mr. Higgins -- you have time to come clean that LINE 1 is increase in average salary if everyone stays. You can sing and dance all you want about what you *think" Zager did, but the maths is the maths. If you'd like to recant, here's your chance.

Everyone have a safe and fun 4th.

-1

Sam,

I'm sorry, I don't see why you feel I'm demonizing.

As I've said repeatedly, I can see the logic in SD's assuming the employer share of the pension. However, and it's a big however, it's going to put a huge strain on many many districts unless they are given the ability to levy for the amount. So far that's not being discussed.

The irony is that the Ill. State Constitution says that the State has the primary responsibility to fund public education, and in reality, Illinois ranks dead last out of all 50 states in percentage of education funding it pays.

All this transfer does is force a greater amount of school funding onto our property taxes. Unpleasant for us and all but impossible to do for SD's in poor communities.


Thom Higgins

QE203.org

Thom:

Please stop demonizing efforts to place the burden for pensions on the local taxpayers. We are represented by elected school boards who are responsible for setting pay and, by extension, pensions. Let the burden fall on the people who elect those school boards.

Unless benefits are cut, taxpayers somewhere(everywhere) are going to pay more. The money has to come from someone and as you noted, Illinois cannot print money, so the taxpayers will pay more.

I say that we'll have a little more control if the burden falls where the costs are incurred. There is no question that salaries and pensions are higher here than downstate and there is no reason downstate residents should subsidize our teachers -- we should pay. (I'm not suggesting that we should cut teachers pay or benefits, except that I do think all employees should be paying at least 25% of the cost of health insurance.)

One problem is that a lot of voters will be very unhappy and may finally take an interest in what the local taxing authorities do with the money the take from us.

Note the following excerpt from The Crain's article:

"Gunning for bigger returns exposes the plan to the possibility of bigger losses, further jeopardizing the pensions of 362,121 former and current teachers. The system, which has just 46.5% of the assets it needs to cover promised payments to retirees, is counting on an 8.5% annual return, which many portfolio managers and investors, including Berkshire Hathaway Inc.'s Warren Buffett, say is unrealistically high. If TRS banked on a 7.75% return — the rate that two other Illinois public pensions lowered their forecasts to this year — its assets would equal only 43% of obligations. That would swell its shortfall to $50.1 billion from $43.5 billion."

Yes, TRS is making riskier investments.

Yes, the discount rate TRS is using is too high and is not economically feasible

Yes, ST. Warren agrees the discount rate is too high.

Yes, the pension shortfall would increase tremendously (way more than the $7 billion warned by Chez What?) If TRS was using a discount rate even close to what private industry is forced to use by law. The extra $7 bil is the number if the rate is only dropped to 7.5%.

Next question?

Sam,

To your point the Trib & Crain articles point out that pension fund managers, including TRS, are taking bigger and bigger risks to attempt to achieve returns (this falls under the "duh" category). Then standard deviations and beta are rising at scary rates. Thus, when losses hit, they will and are hitting big!

Oh, I forget:

I assume you now acknowledge that the actual TRS return WAS 3.7%. ALSO, you now see that the correct pension shortfall in TRS is closer to $50 billion plus if TRS was using discount rates even close to those used by private companies (by law).

And, of course, as SOB posted, " by law a private defined-benefits  pension must use a discount rate based on a two-year average of AA corporate bond rates. Right now that average is under 1/2 of one percent". Note this is not the risk-free rate.

TH,

One more year does not statistically affect a decade average -- again, you try to mislead via inference!

Stop it! As was pointed out by SOB, private industry is held to a much more realistic and stringent standard.

Clearly we disagree, but I personally see NO reason why a public group with political pull, such as TRS, should NOT be using the same standards of excellence. As private industry.

8.5% for the first decade of this millennium was insane, negligent, and if you read the WSJ on Saturday will not be operated much longer!

TH wrote

"btw a fun fact: the CPS pension system was 90% funded in 1992. Chicago hasn't made one pension contribution since. "

With "facts" like this, who needs opinions.

Here's another problem with arguing the pension returns: Chez What and Thom have posted 10 year return data of 3.7% and just under 8%, respectively. They are both correct -- the difference is that the low number covers 2001-2010, the high number covers 2002-2011. So, by picking the "right" starting year, the reported "rate of return" can be doubled or halved.

Let's take the lower number for the decade starting in 2001, it's 3.7% -- and that has been vetted. Now, let's add 2011 which was a very good year - over 23% return. The eleven year number is now approx 6.9%. So far, 2012 doesn't look like a strong year in the markets, so let's assume the return this year will be 5%, then the 12 year average will be approx 6.5%. On the other hand, if the year is poor, say a 1% return, the 12 year average would drop to about 5.9%. If it turns out to be a strong year, say 15%, the 12 year avg will improve to about 8%.

My point is to demonstrate that the rate of return has varied widely and I see no reason to think that will change in future. The rate of return has varied from a 22% loss to a 24% gain just in the 11 years cited by Thom and Chez What. That' s one heck of a spread and I think it indicates just how volatile/risky the portfolio has been and continues to be.

I believe, I don't know but I suspect, that the entire idea of long term rates of return dates back to when pensions were very conservatively managed and emphasized long term investments. For example, private plans rates of return for actuarial purposes were required to be based upon the 30 year treasury bond rate. I can remember when that was 8% -- that was a "riskless" return for 30 years. What is that rate today? Can you invest in riskier assets and get a better return? Sure, but that leads to the +/- 25% range of returns that we have seen recently.

Since the entire population of participants in these plans depends heavily upon the investment performance, and since the taxpayer is on the hook for any shortfall, should we be taking risks that lead to the kind of swings we've seen or should we adopt a more conservative approach that minimizes the swings and still returns a decent rate of return? Of course the more conservative approach will necessitate a realistic look at the cost of benefits. Both sides owe themselves an honest assessment of the situation.

One last point, let's not be fooled by the often cited average benefit of $45,000. That's another accurate number that is not realistic. Today's teachers are going to draw pensions much larger than those who retired 10 and 20 years ago. The average benefit obligation going forward will be much higher than the current average benefit and the plan has to fund those higher benefits.


Chez,

I will gently point you to the Tribune article you cite. They plainly state the period of return as through 2010, not 2011. I find it of interest that the Trib chose to use returns through 2010 when returns through 2011 were available. Perhaps the 3.7% makes a more compelling argument for their pov than 6%?

As for private pension programs. Using the "risk free" rate of return will guarantee that every pension program will be woefully (and incorrectly in my view) underfunded.

I appreciate the concern that 8.5% is a very high mark to hit, but the TRS has exceeded for decades. That's not the problem. The problem is that the State didn't pay into the system for years and now the interest is killing them (us). Illinois can't print money, and taxing us out of the problem is very problematic, so we wait and see if there is a legal challenge and what our elected officials can agree to.

Tom Cross notwithstanding, I think that we will ultimately see the State off-load the employers pension contribution to the school districts. One way or another, that will cause our property taxes to go up.

btw a fun fact: the CPS pension system was 90% funded in 1992. Chicago hasn't made one pension contribution since. The system is now underfunded, who's fault is that?

Thom Higgins

QE203.org

All,

I’ve posted the June 18, 2012 BOE business meeting recap on the QE203.org website.

From the meeting:

The board unanimously approved the 2012-2013 budget. There were no public comments. The Citizens Financial Advisory Committee sent a letter in support of the budget. Taxes increased 1.5%, expenses increased 4%.

The board also approved changes to the HS boundaries in order to align them with the earlier elementary/middle school changes.

There was a long discussion about Coaches Evaluations and the most entertaining part of the night was the discussion on the draft 2013-2014 school calendar. All school calendars are an exercise in multiple compromises. Some board members are unhappy with the HS graduation dates. Others are unhappy because the length of the semesters is different by 10 days. In the end, the board deadlocked 3-3 with Dave Weeks saying ” I’m going to abstain in the vote. It frustrates me that year after year we ignore the committee. I don’t have a horse in the race. I’m going to sit this one out.” Causing Mike Jaensch to reply: ” I don’t have kids in the district either. My horse in the race is trying to do what’s best for the students.”

The matter will now go back to the committee and then make another appearance in front of the BOE in the coming months.

Thom Higgins

QE203.org

TH,

Again, you are just plain WRONG!

Let me see if I follow you correctly ---- you are accepting as gospel the TRS generated data, which differs greatly from that published by both Crain's and the Chicago Tribune?

Do you see anything wrong with that? god and henhouse, all that?

Let me be crystal clear with accurate, well documented data: the Ill. Teacher's Pension Fund annualized annual return for a 10 year period ending 6-30-2011 was 3.7%, NOT the 6.0% you are trying to sell to us.

Also, though you dodge the actual point, the shortfall is $43 bil, but the shortfall would be over $50 bil IF the fund was calculated using then same range of rates private industry is forced to use.

Now, I understand that younger oft confused by data as it can be pesky. However, be very, very clear that YOU ARE WRONG in your statement (actually, I will admit that it was really an inference) that theTRS returned 9% in this century ---- it hasn't, and the numbers I provided are accurate. IF TRS was following realistic accounting, the shortfall would be over $50 Billion dollars!

Sorry, Charlie, but you really need to be more open minded AND more truthful with then readers!

It is this fantasy return rate, and the fact that it is being allowed, that I am addressing

Chez What?:

If you will look at page 57 of the TRS Comprehensive Financial Report, you will see my 6.0% figure verified. Btw they returned 23.6% in 2011, and 12.9% in 2010.

With respect to this:

”The shortfall is $43 bil, but the shortfall would be over $50 bil IF the fund was calculated using then same range of rates private industry is forced to use. It is this fantasy return rate, and the fact that it is being allowed, that I am addressing!"

Well, no. The TRS has, over a period of decades, returned over 9% annually. So it’s hardly a fantasy.

For -1:

There’s nothing more to say. You are entitled to your opinion. You are not entitled to your own facts. If I can get Dave to pull up the numbers from one of the years I'll try to post them on the QE203 website when I get the time. I've asked him to get me the 2011-2012 percentages. Perhaps he can give the supporting numbers when he runs the numbers.

Thom Higgins

QE203.org

It's just that you guys go back and forth, skewing the numbers to support their own arguments. It's kind of a stalemate after awhile. Some of it is good discussion, but other things are just arguing like children.

And, yes, the attitudes of some of these bloggers represent the attitudes of Naperville residents. So, that's why people hate Naperville.

I will jump into this with some actual info on private pension funds versus public:

The current discount rate (and which has been used throughout the current century) used for the Teacher's Pension Fund is 8.5% (give or take). This rate has been used regardless of actual economic realities.

The private sector? Well, by law a private defined-benefits  pension must use a discount rate based on a two-year average of AA corporate bond rates. Right now that average is under 1/2 of one percent.

Anyone still think the 8.5% used by the Teacher's Fund is economically correct? Fair? Viable?

Editors,

Why did you go back to putting je "Comment" section at the bottom?

On longer threads like this one, it can take minutes to get to the bottom when using a smartphone. Do you know how tough this already is on a 4 inch screen?

Why can't you put it back at the top?

A couple points before I shove off.

Claim: LINE 1 represents increase in average salary had everyone stayed.

Proof #673

I am assuming we all agree that the denominator for LINE 1 LINE 2 and LINE 3 is the same -- last year's sum salary. (technical note: multiply numerator and denominator by #FTE if needed to make the denominators the same.) So changes to the numerator are what matter.

We agree that LINE 3 represents increase in average salary. No questions, right? We do (sum new salary)/(sum old salary) and subtract 1. No questions so far? Ok...changes in #FTE cause some slight perturbations which have nothing to do with my comments below, so assume same #FTE year-over-year.

So let everyone stay. No retirees no turnover.

Then by definition LINE 1 = LINE 3 since LINE 2 = 0.

In that case LINE 1 is increase in average salary had everyone stayed since everyone DID stay.

Assume we made a mistake and ONE person retired (predicted salary R) and was replaced by a new teacher (salary of N).

The numerator for Line 3 was (sum_salary_all_stayed). Now it is (sum_salary_all_stayed - R + N). We subtracted out the salary (R) for the retiree which is included in sum_salary_all_stayed and added in the salary (N) for the new hire.

LINE 2's numerator was 0 but is now (R-N) -- what the retiree would have earned minus what the new hire earns.

What happens when we add them?

LINE 1 has a numerator of (sum_salary_all_stayed - R + N +R - N) = sum_salary_all_stayed.

So LINE 1 is invariant on retirees/new hires since those additions and subtractions cancel each other when LINE 2 and LINE 3 are calculated and added.

So LINE 1 clearly represents increase in average salary had everyone stayed. Each and every time.

(Note: Predicted vs "Actual" maybe different but that has nothing to do with my proof.)
.
.
.
Did not look at the ACT crap again. It had too many errors before. But most of the analysis was for districts with single high schools. So is the Neuqua Valley catchment area a better value that the Naperville Central catchment area? Same ACT score, less cost per student?

-1 , hoping my long post from Sunday morning was not eaten by the spam monster

The only way the pension fund for public school teachers (TRF) can continue to be solvent is for the taxpayers to continue to pay ever increasing taxes to fund the program. This is also true of Social Security, in this case workers must pay more and more in to support retirees at ever higher benefits. The federal government commits to higher individual payouts because elected officials know who the voters are.

Now returning to TRF, the big problem is early retirement, age 55, and life expectancy,79 years+ and hopefully increasing. A very generous initial payout to start, plus 3% raises beginning at age 60, (not certain of exact age). This makes payouts excessive beyond contributions by employee and employer (State of IL in this case).

Pension plans originally were devised to pay retirees based upon actuarial formula estimating what the total amount of money would be when set aside over an employee's working lifetime. In the private sector, generally the pay out would seldom ever exceed fifty percent of final pay. Even then corporations and private entities could not continue defined benefit pension plans.

The defined benefit pension plan has gone the way of the Dodo bird. Only in the public sector are the dreams of delusional employees, administrators and elected officials allowed to continue.

To pay teachers or any other government employee more in pension benefits then they earn while working is absurd. Earning more in retirement then was set aside occurs when government employees live a long life, along with three percent compounding of retirement pay.

Taxpayer are under no moral obligation to continue paying for pensions which exceed the payments made into the plan, Current workers and taxpayers must pay more and more (mostly taxpayers) in order to continue the fantasy of excessive pension payouts to retirees.

It is time to abandon defined benefit pension plans for public employees, a "Ponzi scheme" will only bring the house of cards down on all.

Sam,

GREAT post. Thanks.

I also point out (again!), that the Ill. Teacher's Pension Fund annualized annual return for a 10 year period ending 6-30-2011 was 3.7%, NOT the 6.0% you are trying to sell to us.

Like you have oft posted, I will take the accuracy of the Tribune and Crain's over your postings. Get some accurate data!

TH,

You are just plain wrong.

The shortfall is $43 bil, but the shortfall would be over $50 bil IF the fund was calculated using then same range of rates private industry is forced to use. It is this fantasy return rate, and the fact that it is being allowed, that I am addressing!

For your proof I direct you to the Tribune and Crain articles. I also encourage you to read the front page of Saturday's WJ.

Logical progression?!?!!? I guess in Higgins world maybe.

See, a straw man argument is one where you make a fake claim to knock down when you cannot fight the real claim. Fake claim = people complaining about teachers getting more than CPI raises. "If we all spent out career only receiving increases based on CPI, we would never progress past our starting salary, adjusted for inflation.." This is a statement at the individual teacher level about a bogus claim that people think teachers should get only CPI raises.

Progression from BS supposition about individual raises to a non-sequitur on average salary? You understand that was the logical break you had in the first place which started all of this?

If you think you are trying to claim that an increase in average salary of CPI would cause each individual teacher to get only CPI raises, that is wrong also.

If you are claiming that 6-7% > CPI and therefore your initial statement ("Over the years some have complained about teachers receiving raises that are larger than increases in CPI.") is technically correct, then go find something else to do. Lickety-split!
.
.
.
I have made many mathematical suggestions on this blog. Take a look at how many have been wrong (absent immediate typo corrections). You could accidentally chop off both of your hands and still have enough fingers to count the mistakes.

Do you really think I saw the flaw in the description of LINE 2 and somehow have the wrong idea bout LINE 1.

Line 1 = sum of all raises (including presumed for the retirees) divided by last year's sum salary.

If you do not agree with that statement, then please tell me what is wrong with it? Tell me what you think Dave did.

This is a fraction less than one which could be .055 or 5.5%. If your problem is an inability to convert decimals to percents, then I quit entirely. It could also represent a multiplier value or 1.055 as I have discussed endlessly.

1+(sum raises)/(sum prior salary) =

Getting a common denominator.

(sum prior salary)/(sum prior salary) +(sum raises)/(sum prior salary)=

(sum prior salary+sum raises)/(sum prior salary) =

(sum new salary)/(sum prior salary)=

Since there must be the same teachers (FTE if you wish) counted we can divided the numerator and denominator by the same number, N without changing the value of the expression.

[(sum new salary)/N]/[(sum prior salary)/N]=

[new average salary]/[prior average salary]

Note that
(sum new salary)/N = new average salary
(sum old salary)/N = old average salary.

So new average salary/old average salary = increase in average salary if everyone stayed (here it is a multiplier from which we subtract 1. 1 was added...now subtract it).

What's even more beautiful here is that I do not even need to know what N is. If i used 100 instead of 1294.5, it would not matter. Just knowing the same number of FTEs are counted in the numerator and denominator matters.

Since you keep telling me I am wrong and must meet with Dave to clear up my confusion (how many times have I heard this before?), please post where my logical flaw is.

$100 to NEF if you can show me where I am wrong.
.
.
.
Repeating my prior post, corrected for a typo and ignoring the side comment about the previously incorrect description for LINE 2:

Let's look at the "two" teachers in the whole district. Understand that there are 25-50 As for every R and N.

A = incumbent
R = retiring
N = new hiree

Number after letter indicates year

So...let me start with what seems to be absolutely zero disagreement.

Line 3 equals

(A2010+N2010)/2 = 2010 average salary

divided by

(A2009+R2009)/2 = 2009 average salary

or more simply:

(A2010+N2010)/(A2009+R2009)

Or the ratio of the total salaries between the two years. And when you are done subtract 1 of course.
.
.
.

R2010* = presumed salary if R did not retire.

Linen 2 is:

Presumed 2010 total Salary minus actual 2010 total salary/Total 2009
[ (A2010+R2010*)-(A2010+N2010) ] / (A2009+R2009)

=

(R2010*-N2010)/(A2009+R2009)

This does allow us to "ADD" lines 2 and 3. *This is a positive number as calculated. Also, no subtracting 1 needed. If you do not like R2010* and want to use R2009 fine...as you note it is of little actual relevance but it is of mathematical relevance.

So we get line1

(A2010+N2010)/(A2009+R2009) -1 + (R2010*-N2010)/(A2009+R2009)

= (A2010+R2010*)/(A2009+R2009) - 1

=[(A2010-A2009)+(R2010*-R2009)]/(A2009+R2009)

= sum of presumed raises / total prior year salary.

If you want to make R2010* = R2009 it would leave a small change in value. But to truly know how turnover saved money, you need to know what it would have cost had they stayed.
.
.
.

-1

Sam,

You are of course correct when you talk about cutting benefits, increasing taxes, or both, although I still think this ends up in the courts and it's sorta one or the other then. A mix would be better.

Agree 100% with Districts paying into the system.

My reason for posting the TRS information is to try to place the blame more squarely where it belongs which is (largely) the State.

There are some reasonable compromises, like extending the retirement age for the entire system, as has been done for new hires, that would take the pressure off the investment returns and I hope they find a way to implement something that makes sense because the State will have a terrible time coming up with everything they owe.

Still, I wish the TRS was running my money. If I had realized a compounded 9+% return for the last 30 years, I would be doing this from my cabin somewhere!

Thom Higgins

QE203.org

Ah -1, what to say?

I am a bit dismayed about your straw man claim. There is a progression of thought in my paragraph you cite. I’m sure you will agree that there are numerous posts in the blog here where writers are complaining about excessive raises. I would hope you accept the interplay between raises and salaries. My sense is you are being overly pedantic in your criticism.

As for the rest, I don’t know what to say. You are steadfast in your beliefs of what line 1-3 represent and have variously complained about each of them over the years. However, line 1 isn’t the theoretical increase had everyone stayed. If you had the courage to sit down with Dave and me we could end all this silliness. I’m sure he could pull up some of the information and explain it. We should try it. It would save a lot of wasted time.

Thom Higgins

QE203.org


Straw man argument..Me. right..Watch. Impressive creating a straw man argument to claim I used straw man arguments (golf clap)

I am going to give you some more advice on how to reduce the "truthiness" of the chart that you proudly posted at the beginning of this thread.

Over the years some have complained about teachers receiving raises that are larger than increases in CPI. It is correct that teachers over their career typically receive increases that are larger than CPI, as do most of us. If we all spent out career only receiving increases based on CPI, we would never progress past our starting salary, adjusted for inflation. You will see below that for the last five years D 203 teacher’s average salary has increased slightly more than the average wage increase for all workers nationally.

Who has complained about teachers receiving raises greater than CPI? Pure unadulterated straw man start OR complete idiocy on your part. I will give you the benefit of the doubt here and call it straw man.

You start by talking about actual raises in the first few sentences via straw man and say why raises should be higher than CPI, but then morph into a final sentence about average salary.

Horrible.

What point could you possibly be trying to make?

LINE 1

Total average annual increase to compensation for incumbent educators between each consecutive year

I would strongly suggest you change the wording to make this as clear as possible to a casual reader. It is three years after you, Dan and Dave sat down and talked about this chart. After all this time, the fact that you think LINE 1 has anything to do with average percent increase in compensation for incumbents makes me feel sorry for you.

I would suggest making this as true and simple as possible

LINE 3: Increase in average salary (after turnover)
LINE 1: Increase in average salary if everyone had stayed
LINE 2: Savings from turnover

Basic. To the point. Cannot be mistaken for what it is not. If the great Thom Higgins is still confused after 3 years, then what of the passing reader.?
.
.
.
Geometric Means.

Here's the FOIAed document:

http://www(dot)medi(dot)fire.com/?za1192fzx3c13fc

Thom Higgins wrote:

if Dec 2008 was 210.2 and November 2009 is 216.2 that's 6% What am I not seeing, I don't think CPI is up 6%

The tools I will mention apply to:

Line 3, CPI, ECI, ECI-W, Salary for an individual teacher.

CPI and ECI and indices. The percent increase is determined by the ratio of the values. I will assume he meant December 2009, otherwise we need to do some other calculation for the annual percentage.

Assuming (same month, different year) values of 216.2 and 210.2 we get 216.2/210.2=1.0285 or CPI is up 2.85%

If you do this each year we get

CPIIndex(dec2007)/CPIIndex(dec2006)

CPIIndex(dec2008)/CPIIndex(dec2007)

CPIIndex(dec2009)/CPIIndex(dec2008)

CPIIndex(dec2010)/CPIIndex(dec2009)

CPIIndex(dec2011)/CPIIndex(dec2010)

Each of these is a multiplier, from which you need to subtract 1 to get the number reported in the news.

So you ask: what is the average CPI increase over those years.

The answer to this question depends on what will be done with that info. Most people want to know..What value of year-over-year CPI would give the price increase we see today compared to back then?

In other words, what multiplier do we need to apply equally 5 times to get from dec2006 to dec2011.

Multiplying those values above makes numerators and denominators cancel, yielding CPIIndex(dec2011)/CPIIndex(dec2006). So we need only take the 5th root of that value to get out answer.

The same concept applies to ECI, Line 3(note that the numerators and denominators in LINE 3 should cancel when multiplied), Salary increase over time for an individual teacher. My analysis works for the relatively stable teacher population we have in D203.

www(dot)mediafire(dot)com/?r4ix17y1itayb0f

Back to your chart:

LINE 1, since it is a theoretical value and does not speak to an average percent increase for individual teacher, cannot be used in such a fashion as when Mr. Higgins said "Zowie" or when Mr. Higgins attempted a similar calculation in the FOIAed document. In that case, not only did he apply LINE 1 incorrectly(twice -- once by using it in the first place and the second time by understanding that if it did make sense to use it, it would apply to all years of employment) , but he also used a value which was straw man-like in that he was using years which were not calculated by Dan D and the TT. Zowie indeed!

Yep...wrong about a calculation which had nothing to do with the years he was using. Guffaw!!

summary: Please show that you have some brains in you by changing what the document says. Failure to do so only highlights your inability to understand these basic concepts.

-1

This debate could go on for months. No one knows what investment returns will be in the future, but, in my opinion, it would be better to plan on them being considerably less than 8.5%. There is very little harm in that approach for two reasons: a huge shortfall already exists, so if I'm wrong and returns do approach 8.5%, the "excess" over a lower anticipated return will help to reduce the shortfall; and a higher target rate may well cause the investment committees to take greater risks in order to reach the goal of an 8.5% return. The last thing a pension fund should be doing is taking outsize risks to reach an arbitrary goal.

One other point,Thom, you are quite right that the pensions were not funded according to the law --shame on the politicians! And, more to the point, shame on the electorate that kept voting them into office. The unions should be asking if they got what they wanted when they funded the re-election of the very people that they now say contributed to the problem by not funding the pensions at the appropriate levels. My bet is that they will continue to re-elect the very same politicians -- and we all know they saying that if "you do what you always did, you'll get what you always got" ( Einstein said it better, but the sentiment is the same.)

In any event, the plans aren't funded and no amount of finger pointing is going to change that. The taxpayers are going to have to step up and fund them or the benefits are going to have to be reduced or some combination of the two -- no one has put forth any other solution of which I am aware. Blame whoever you want, there's certainly enough to go around.

This is not the major problem, but I believe it is symptomatic of the the mindset that brought us to where we are, there is no funding model that will adequately cover a plan that routinely collects contributions based upon one assumed payout ratio and then allows that payout ratio to be increased by disproportionately large pay raises in the final two years of employment. Another case of everyone looking the other way while the pension funds were being looted!

Finally, while I hate to see my taxes go up; Madigan is dead wrong. The local districts should pay the cost of pensions. Downstate taxpayers should not be subsidizing our pension costs. Make the local boards accountable for what they spend and make the local taxpayers pay for what the local boards approve. Fair is fair!

Whatever solution is selected will be painful for someone, so get ready....

1) Exhausted ... then don't read them. If you see a post by someone you'd prefer not to read, then exercise your right to skip on to the next post.

2) I agree. I am sure any and all disdain for Naperville must be due to some posters in the Naperville Potluck blog. No question about it.

-1

Chez What?:

First, you are incorrect that the underperformance of investment returns for the last decade has caused an additional $7-10 billion on top of the unfunded liability of $43 billion. The total unfunded liability is $43 billion “all in” and, as the TRS document illustrated, as of June 30, 2011 the state’s portion of that deficit is 64%. Had the State made their required payments all along the TRS would be 77% funded and no one would be talking about any of this. Remember that in 2000 and 2007 essentially the entire funding deficit was due to the shortfall of required State contributions.

Again, I remind you that the TRS, just like everyone experienced two significant financial setbacks in 2001 and 2008. Even so, the annualized annual return for a 10 year period ending 6-30-2011 was 6.0%, for 5 years it was 4.1%, and for 1 year is was 23.6%. All net of fees. Over the very long term, including this current decade they have returned 9+%.

I really loved the Tribune article you quote and their ” If TRS doesn't average 8.5 percent, its challenges will grow steeper."

True enough statement, but a more educational one (and fairer I think) would be “If the State had made its payments over the years, even with the losses the fund sustained from the 2008 stock market collapse, the TRS would be 77% funded today. If their investment track record continues, they would be back to 100% funding (or at least at 90% funding like the IMRF) in a few years. Alas, the State stiffed them for decades and the non-payments, and the interest owed due to the non-payments, is killing them (which ultimately means us).

I go back to my original thesis; I suspect the benefit guarantee will ultimately be tested in the courts. Depending on the result, some group of people will be very unhappy and that's too bad, because it didn't have to be this way.

Thom Higgins

QE203.org


Reading your guys' posts is exhausting. This is why people hate Naperville.

The rate has not even approached 8.5% in this century. Again, if your pension or life insurance company did this, there would be lawsuits and possible jail time.

Times change, biz changes, and actuarial tables are supposed to change, too, to reflect economic realities.

You cannot possibly be defending the use of 8.5% with a straight face!

See following excerpt from Trib article:

"What's more, TRS assumes it will achieve annual investment returns that average 8.5 percent — even though its returns averaged only 3.7 percent from 2001 to 2010. If TRS doesn't average 8.5 percent, its challenges will grow steeper."


If I recall correctly, this negligent rate results in an additional $7-$10 billion of deficit on TOP OF the current $43 billion.

Empty Pockets,

We pay our taxes to the State and it’s their responsibility to allocate them. One of the problems with the TRS is the 1970 addition to the State Constitution guaranteed benefits, not payment into, the system. I don’t know where the operative legislation lies for the IMRF but they are guaranteed payments into the system. The difference is they are funded at approx 90% and the TRS is at 46%.

Like your idea of throwing somebody in jail. The problem is that we would just about have to throw every living legislator/governor in jail. Maybe we could buy Thompson back from the Feds…

So you know, the unions, good government groups and a few hardy legislators have railed for years about the nonpayment into the system. Indeed, the reason why the language was written into the Constitution in the 70’s was because the chronic underfunding prior.

Chez What,

The actuarial assumption for the TRS is 8.5% I believe (from memory). Over the very long term of decades the TRS has returned over 9%. It’s an exceptionally well run system. To the extent that this country prospers and we continue to have economic growth, (or at least corporate profits), the TRS will be fine (if the state pays what it owes). If we have a fundamental permanent structural decline of the economic system then they won’t, but then we all have a lot more problems than just the TRS.

While I’m talking about pensions I want to differentiate between the structural/financial aspects of the pension system and the benefit aspects. I fully embrace teachers working longer. There are a number of excellent 203 people that we have lost when they were in their late 50’s that I wish were still here. I also spoke publicly before the D203 board when the latest NUEA contract was being negotiated, asking for an end to the 6%’s end of career kickers. These are some common sense changes to the TRS that can be, or have been made, that will help the system more easily make its performance bogey.

I’ll offer the observation that here in Naperville things are significantly picking up. Two very large empty warehouses on the far n/w side of the city recently were purchased/leased, bringing in some 200 manufacturing jobs at one of them (BMO Harris in the last year also took one of the huge empty Lucent buildings over). Wallmart has announced a 175,000 sf. SuperWallamart on the old Branch-Brodie property along 75th, Standard Markets will soon break ground along Aurora Ave and we have Infiniti moving into Naperville as well. Downtown, we have Main Street Promenade East soon breaking ground at the abandoned site at Main and Van Burren (Excellent!) and we have yet another proposal for Water Street up for approval (good if it is viable – doubt it -- and really awful planning but still representative of the economic vitality of Naperville).

We are really fortunate to have this kind of economic growth here and one of the reasons for it is the excellent schools. I refer you all to Good Schools Mean High Property Values that talks about the effect good schools have on property values.


Lastly, D203 has been, and continues to be, remarkably fiscally conservative in its stewardship of tax dollars. How many taxing bodies have we heard about that spend every dollar and then run deficits too boot? There are a number of worthy educational initiatives that D203 could have started that would have reduced any fund surpluses they have/had. Extending the elementary school day and adding a foreign language has been talked about for years. Recently ADK has been discussed, but not yet approved. There is widespread agreement that these are worthy programs that would enhance our student’s educational experience but have not been approved, largely for fiscal reasons. I think it’s unfortunate when people try to frame everything as stemming from being overcharged, as opposed to giving credit where credit’s due; good fiscal stewardship.

I also thing we not lose sight of the fact that of the few districts whose students achieve higher ACT scores, they spend, on average, 33% more than D203, a huge sum. For more on that go to What is the Best Educational Value in Chicagoland?

Thom Higgins

QE203.org


The taxpayers paid the State of ILLinoiis to place money in the pension fund. If this was not done, then in my opinion there is negligence, and the individuals involved in not placing taxpayer money in the pension funds should be arrested and charged;

Again my opinion, the unions representing government employees went along with the scam, when they should of been looking out for their members. Instead they were to busy supporting elected officials and legislators who gave the union employees everything they wanted, under the guise of negotiating.

It is all to late now, pension cuts and pay cuts are the order of the day. Government employees have to realize the gravy train is not running any longer.

You still ignore the use of an unrealistic rate of return for actuarial purposes. As I said, if used in private practice there would be jail time.

Otherwise, I still suspect we would be talking of pensions even if the banking system had not roiled in 2008. Everyone is basically fed up!

I will make a more in depth response to Mr. Higgins' latest post, but let me say I have no problem saying that interest on the bonds was saved. It is in the subsequent (il)logical leap where the statement would falter -- that the taxpayer was saved money.

Does it seem strange that the district had $36M sitting around to use right away for construction? Why would that be? And how can D203 continue to not charge for the Debt Service Levy? Did we not need the referendum after all? Was there Chicken Little forecasting used in the 2008 referendum lead up?

Good paper purchase agreement?

Savings from the combined copying with D204?

Wise investment strategy?

Good teacher contract negotiations?

Prompt pay from Springfield?

Perhaps...over-collections from the 2002 referendum. Yep that's it.

$36M+ sitting there waiting to be used plus no DSL.

My money sitting in D203's piggybank.

Great.

-1


For Chez What: FTE’s (full time equivalents) have been steadily declining as enrollment dropped, hitting a low in 09-10 I believe. They climbed last year and are climbing again as the District adds support staff. Two huge drivers are PERA that requires an extensive evaluation process be implemented and the other is the implementation of the Common Core State Standards. There are two new deans for intervention at the HS’s because life isn’t getting any easier for these kids, and lastly, we have three ELL/Bilingual teachers to address the District's changing demographics. Welcome to public education in 2012.


With respect the pension issue, I refer everyone to this document, specifically page 9:

http://trs.illinois.gov/subsections/legislative/Funding_2012.pdf

There you will see that in 2000, 100% of the unfunded liability was due to the state’s lack of funding. In 2001 the stock market collapses and we now have losses in the portfolio cause the state’s portion to drop to 56% in 2003. Subsequent investment returns then get them back to 95% in 2007 and then we have the 08 crash and we start the process over.

I would hope we all agree that having two national crises of this magnitude in the course of 8 years is unprecedented. To the extent that we return to a more typical economic cycle, I believe the evidence strongly suggests that the system could perpetuate itself if the state paid what they owed. My memory is that most pensions consider themselves adequately funded if they are at 80% or over. That said, if it can’t, then adjustments should be made. However, I think it’s a fair statement to say had the state paid nobody would be talking about this.

Lastly, I’ll mention that the District had planned to issue construction bonds for the facility renovations and targeting the additional taxes from the expiring Cantera TIF to repay those bonds. Instead, the District used cash reserves, in lieu of issuing the bonds, thereby avoiding (dare I say saving??) the interest on the bonds. In this case, the Cantera money will be used to help replace the cash reserve.

I’ll note this from the citizen’s Finance Advisory Committee:

The Committee also notes the District’s prudent approach to managing the Debt Service fund and the $43 million in bonds authorized in the February 2008 election. The cost to the taxpayer is substantially below that estimated at the time of the referendum ($14.8 million, or 21.8%, for the 20 year duration of the bonds).


Thom Higgins

QE203.org

Agreed with -1 and Anonymous.

The pension shortfall is made up of bad investments, low interest rates, and low returning investments along with the State's short funding.

To imply it is all the State is, yet again, another misleading statement.

If 203 enrollment is down, why are they asking for 10 more FTs in the latest budget?

"The fundamental problem with the state pensions is that, under both Democrats and Republicans, the state didn’t make its normal payments over a number of years"

Though a true statement, it is not the COMPLETE truth!

You leave the impression that there are no other major issues driving the pension shortfall, yet you leave out the borderline illegal actuarial methods employed by the pensions. They are still using a expected return rate that has not been realized this century, a fairy-tale rate that has hidden even greater pension shortfalls (about another $7 to $10 bazillion!)

By the way, if by "silliness" you mean a straightforward, non-misleading understanding and use ofnstats, then it is silly!

A few quickies:

Let there be no doubt that I have discussed the IMRF, Firefighters, and police pensions in other blog entries.

Let there be no doubt that a combination of state not paying, investment being less than expected and too generous of benefits have caused the TRS issue. Some estimates have the state portion as high as 66% and some as low as 50%. But that means that even if the state had not taken pension payments holidays, there would still be 33% to 50% of the present unfunded liability hanging out there.

That would still exist if the districts were paying what the state should have been paying all along.

We would still have unrealistic outputs if all of the inputs had been supplied.

I will also say that I have long felt that each district should be responsible for their pension inputs. The state should be responsible for the catch up from missed priors, though. (silly me, the state is us also ... so the formula needs to be fixed as well)

D203 continues to increase its (non-debt service) levy as much as possible despite having fewer students and getting additional non-service using property (aka Cantera) over the past few years. The 2002 referendum implementation jacked up property tax bills more than expected and that continues to flow through today.

D203 is adding FTEs.

The 300,000 *teachers* mentioned are not all teachers. Tone back the rhetoric please.

-1

Mike,

First, thanks for posting under your own name. Wish more would do that here.

We are “guilty as charged” when it comes to going on and on about nothing. My only defense is if you read my posts you will see I’m trying to stop replying to all the silliness.

I will make a comment that you may not appreciate, so my apologies in advance. The fundamental problem with the state pensions is that, under both Democrats and Republicans, the state didn’t make its normal payments over a number of years. Even Ty Fahner agrees with that premise.

What I find interesting is that nobody wants to talk about the IMRF pension system that is something like 80% funded. So why the disparity between it and the TRS and other pensions? Simple, the employer is obligated to make the payments, not the state. D203 has some administrative employees, I forget who, that are in the IMRF. D203 makes the employer portion of the contribution and viola! no pension problems.

What this argues for is, frankly, transferring the TRS pension contribution to the school districts. They can’t skip out of paying like the state. The problem is if they can’t levy an additional amount to help pay for the contribution, many districts will face bankruptcy even with a phase in period, as many districts are seriously underwater today, even after wage freezes and/or personnel and program reductions. Here I’ll mention that even with the stimulus programs aimed at teachers, something like 300,000 teachers nationally have lost their jobs since 2008. A good example of that is D204 who has let go a number of teachers over the past few years due to budget issues.

You are correct that ” the music has stopped, and it's time to pay the piper .“ It looks like to me like the state is doing everything it can to try to offload the obligation to others, whether it be the members of the pension systems in the form of reduced benefits, or the public in the form of higher taxes (ultimately) to pay for the transferred contributions. In the end, I can see the state testing the constitutional guarantee for pension benefits. If the state wins, the members of the various pension systems get had. If the pension guarantee is upheld, then “we” are the ones in trouble.

Bottom line is that the state should have made their payments over the years, and secondarily, any enhancements in the pensions or changes in the actuarial assumptions should have been paid for by both parties. And, of course, these egregious “creative” pensions for a few big wigs that we have been reading about should go. Had everyone acted responsibly this all could have been avoided.
I’ll also mention that D203 is working on a revised professional development/salary system for teachers that is a complete departure from the typical lane program. It may (hopefully) also affect the steps as well.

Thom Higgins

QE203.org

Mike Kaindl,

For the moment I will assume you were not around in 2007 when Thom Higgins attacked and mocked the Taxpayers Ticket for their appalling suggestion that raises were 7% and the over-collection from the 2002 referendum should be dealt with better. An over-collection that today allows the board to abate the debt service levy from the 2008 referendum while still collecting enough to pay for new construction.

I will assume you do not know that Thom Higgins fully agrees that a single Board member saved taxpayers over $12M by taking our money and spending it.

I will assume you do not know that Thom Higgins said "Zowie!" when he did a quick calculation of what 7% career raises do and why he worked to create a chart with the smallest available number to pretend like that's what the raises really were since he cannot understand the languages of maths and English.

I will assume you do not know that Thom Higgins wrote to the D203 director of finance "NEVER ROUND UP" when Mr. Zager rounded 4.76% to 4.8% in an email.

I have finally figured out this particular instance of why Thom Higgins has been not understanding a chart for three years.

If he does not get it now, heaven help him and his children and anyone who reads what he writes.

-1

Wow. While you are all parsing "increase in the average" and "average of the increase", let's consider for a moment the increase of property taxes, the decrease of property values, the comparative rate of unemployment and underemployment of teachers versus the general population. Be careful how you (teachers) slew the word "fair" around a lot of people that want you to share their PAIN.

I personally don't give a crap how much teachers make individually, if their performance warrants their level of compensation. You know, like in the real world. How about speaking to rewarding mediocity (if not plain badness)? How about lanes and steps for performance (good and bad)?

Or how about supporting the politicians that bankrupt the state while borrowing and taxing more and more and more to support extravagent teachers pensions. The music has stopped, and it's time to pay the piper.

This calculation from that spreadsheet, blah, blah, blah, blah. It's a smokescreen delay to avoid resolving the bigger issue. Stay focused.

I could not care less about a warped, misleading view of total salary increases for a five year period that ignores steps, lanes, and actual individual raises for an overview of total increases that uses turnover as a mitigating factor to drive down the actual individual numbers!

I DO care about a 15 year period where public employees, in this case very good teachers, get average individual raises that dwarf the average individual raises of the people paying the salaries (in the cases where they even still have jobs!). I also care when those raises given to public employees over such a long period basically are triple the inflation rate.

I am even more concerned when those same employees, and their posse suchnas yourself, insist on crying poor and insinuating that they are underpaid and overworked, especially when the Dept of Labor has already pointed out that on an hourly basis, these are some of the highest paid workers in the entire American workforce.

In short, quit lying, quit misleading, qui whining, and just teach the children something they can use in life, like STEM subjects, and leave keyboarding and art history for home!

Higgins...I am going to blow your mind....

I have a syntactical breakthrough on why you are confused about LINE 1.

From Dave Z's descriptions of the lines:

A. The Position Control System is used to calculate Line 3, “net average increase,” and Line 2 “savings due to turnover.”The difference is Line 1, average increase without turnover – i.e. incumbent average increase. (snip)

This is going to sound crazy, but this may be correct for line 1.

Stop.

Breathe.

I have not gone crazy.

If you parse the words correctly, you get what Dave did. You just cannot see it.

Average is a NOUN not an adjective in his descriptions.

average increase....means...wait for it...increase in the average NOT average of the increases.

Reread how he describes line 3. "net average increase". That cannot be net (average increase) since we have different teachers in the two years. There is no average increase to measure.

So his wording implies...(net average) increase or the INCREASE in NET AVERAGE which is exactly what it measures. Increase in average salary.

LINE 1

What you continue to write: "Average increase in incumbent’s salary " NO

"Incumbent average increase" YES if read as (incumbent average) increase NOT incumbent (average increase).

This must be where you are misreading what he wrote.

The correct reading would fit exactly with what your chart is trying to show... How much the average salary *would have increased* had everyone stayed vs how much the average salary did increase.

Simple.

You are welcome.

Now correct the wording in front of LINE 1 in the chart. Do it in a way where it is obvious that AVERAGE is a noun not an adjective.

Remember...you can do it. These are not Dave's words.

-1

Dan D:

My geometric mean analysis is different than that created by the TT, but it is clearly the value someone would want to look at if they were interested in actual percent raises.

I also did a Zager-like (and TT-like) calculation in my spreadsheet.

As you noted, Dave Zager uses (sum raises(real+/-theoretical)/(sum salary the year before). This is similar to the TT ratio, except that your group used only those full timers in both years, like I do for my Column B.

As you noted, having highly paid retirees in the numerator getting small (fake) raises (what..none could have had 6%?) and also in the denominator makes Dave's number smaller than my Column B and smaller than the TT numbers.

I must eliminate retirees in my year-over-year analysis (as I am calculating data on those who were full time both years), the retirees are neither in the numerator as a fake raise nor in the denominator. As such, my Zager-like number is a bit higher than Zager's as would be expected. Zager also dilutes the pool with people who are less than 1.0FTE who tend to be lower paid and on the lower end of the payscale already which have smaller steps. I have no problem with this, but Thom cannot seem to grasp that there is a legitimate difference between how those are calculated. Dave's calculation will be the smallest of all of them.

BUT LINE 1 and Column B are just salary ratios and have nothing to do with an average % raise for incumbents so arguing about them is a bit on the silly side.

Everyone here but one person can see that.

to anonymous: Higgins does not include anything in his calculation. He did not make any of them.

Zager did include steps and lanes. Higgins has a wrong and deceptive label for LINE 1; otherwise LINE 1 would be irrelevant to the conversation.

LINE 3 ("what the taxpayer pays")has been too large because the raises have been too generous. In order to inform people what the raises have been, I did my analysis.

-1

It is what it says it is except when it mislabels calculations.

For actual teacher salaries being used in an open way with all formulas right out there in the open, along with a great visual demonstration about how the salary sheets work, see:

www(dot)mediafire(dot)com/?r4ix17y1itayb0f

-1

Well, I see we are off to a good start on those thousands of words that I knew would be written.

For everyone who hasn't actually read it, and especially for the anonymous poster, I commend: Overview of Teacher’s Salary Increases for Fiscal Years 2007-2011 to you.

It is, what is says it is, as opposed to what others here are claiming.

Happy reading!


Thom Higgins

QE203.org


?????Regardless, the percentage has no fiscal relevance. None whatsoever.????

You are just plain wrong! The most fircally relevant look at salary increases is the one that looks at individual raises because that is the only one that strategically views the new imbedded base! Your view, the one that hides this via totals only thatbare offset by single year turnover offsets, is worthless for this analysis. In fact, I think your view also ignores steps/lanes, yes?

The simple faces that the view that you have ignored for years now is the only real measure of ongoing economics, while the the view you support is strictly a measure of management effectiveness.

All in all, it is clear through your limited viewpoint that you either A) NEVER worked in a private corporate at a level of management where total budgets & spending was a measurement of your abilities, or B) You have been intentionally misleading and lying to us in an attempt to blindly push your agenda for 203.

Either way, you are wrong.

Quick comment about fake raises:

Although a fake raise for the retirees is technically needed for lines 2 and lines 1 to be correct, I am not particularly concerned about that as far as the big picture goes and how LINE 1 is mislabeled and is being misrepresented. This is a comment about a tree, not the forest. Not understanding why that tree matters was of concern, but I think Mr. Higgins can now see that tree.

I will repeat the forest view:

There are 2 numbers:

As an employer(aka taxpayer) How much more it costs in salary (and benefits) year-over-year (LINE 3)

As an employee (in order to compare): My calculation which helps the taxpayer compare what the teacher raises have been compared to their own. (Average % increase in incumbent salary). This was also used to great effect when Mr. Higgins said "Zowie!" when he recognized what those 7% increases actually meant.

Nowhere does Mr. Higgins' table have a number comparable to my calculation.

www(dot)mediafire(dot)com/?r4ix17y1itayb0f

All other calculations are intermediates or comparisons or are there to get people to understand why raises were higher than 3.54% in the aughts.

-1

First:

Some praise.

I think Mr. Higgins finally is getting very close to the calculations. A year and a half after I posted what the calculations were and having him reject them, he posts very similar words.

Finally.

Hooray.

However, he continues to cling to the number Dave Zager calculates (LINE 1) as a number which might be used in the long run to figure what happens to *teacher* over a career. That is where he fails and where he has not revisited his Zowie moment which was the inspiration for Dan and Dave and Thom to sit down and create this chart.

Mr. Higgins, as you put away your shovel for now, I want you to review this paragraph. Take you time. A week, six months, whatever. Slowly but surely you will get there. It is in this paragraph that you miss the entire point of what I am discussing.

The District’s calculation takes the sum of the salaries for teachers year over year as the basis for finding line 3, the increase in average salary. (-1: good!) To that is added, the savings due to turnover, line 2 (the total salaries of the retiring/terminated teachers minus the total salary of the replacement teachers divided by the prior year’s total salary) (-1: close but no cigar), giving us line 1; Average increase in incumbent’s salary (-1: NO). This method has the advantage of being fiscally relevant as it is based on the total of actual salary costs and is a well used and accepted method of finding an average (-1: whoa...way off the rails here buddy). Dave, in his desire to be overly fair, has (for all the years in the analysis except for 2010-2011 where there were no base raises) added in some theoretical raises for those retiring that has the effect of slightly raising line 1(meaning indicating higher raises) by a few thousandths of a percent.(-1: see my question below. Hint at the answer: you cannot have them represented by no raise (unless actually 0 as in 2010-2011) in the numerator and still keep them in the denominator))

I want you, in your time away from this blog to reflect on a few questions:

Where in LINE 1 is an average taken?

If Dave does not include theoretical raises, what must he do to the denominator of line 1 to make it work and how would that changed value match my column B?

Is LINE 2 really as you wrote? We seem to be missing raises in LINE 2 for it to make sense. (aka theoretical salaries for the retirees not just their last salary)

The point to all of this is that my numbers and Dave's can coexist.

I will give you one last interpretation of Line 1 which might work for you.

Average dollar raise as a percent of prior year average incumbent salary.

(sum raises)/(sum salary) = [(sum raises)/n] / [(sum salary)/n]

This is not, has not, and never will be the same as "Average increase in incumbent’s salary".

I could accept LINE 1 as "(theoretical) Increase in incumbents' salary" Note the loss of average and the change of the apostrophe. So this is would be the increase if everyone stayed. Note no "average".

Will Dave be calling me to change his own analysis or its wording based on his conversation with -1? Doubt it.

Are you placing money to NEF on this? I have no problems with his numerical analysis. You have implied this repeatedly. Stop.

I have a problem with you parading around using the wording to make it seem like Dave and calculated the same thing. We did not.

You still need to work on what the word average means.

I'll be out of town and not checking the blogs starting next week. I will probably post a few thoughts on when to use geometric mean as how that applies to Line 3, CPI and ECI when averaged over several years. The upshot is that they are all multipliers.

-1

Obama has been committed to make the same mistakes that FDR made in the 30's. The next chapter? Significant cuts to salaries particularly governmental workers. It might take six months of closed schools. But people are out of money. Housing vacancies could approach 10% in Naperville.

When you have a President repeat mistakes of the past and add to it people like Thom who misrepresent the facts, you get double trouble.

And -1 correctly created the schedule as I ORIGINALLY prepared it. You and Zager hyjacked it to manipulate the numbers. But instead of 7% increases, they are 6.49% and you round down to 6%. Even six percent for 9 out of the last 10 years cannot be sustained.

It really doesn't matter ow many tmes you went over it with Zager - the bottom line is that you are grossly incorrect when you attempt (repeatedly, and over the course of years!) to onvince us that the average individual teacher raises in 203 are 3%, 1%, etc.

In fact, I believe what younare pushing is actuqlly an outright lie!

The actual individual raises have averaged at or around 7% for practically any 10 year consecutive period beginning around 1995 or so.

To all,

What we have here is one person’s desire to argue ad infinitum about nothing.
It is unfortunately also about this person’s attempt to create an elaborate straw man argument that he will use to miraculously prove he’s correct after talking to Dave, in order, I assume, to damage the credibility of the very analysis that Dave himself does and bash my alleged lack of understanding. Or to paraphrase a famous quote: hope to deceive people by offering them comments that are wide of the actual truth, through the medium of certain resemblances to that truth.

Sorry, I’m not playing anymore. The following has always been true, and in the end, irrespective of who our friend calls, or what he writes, it will remain true:

The philosophical basis for Lines 1-2-3, and the data itself in Overview of Teacher’s Salary Increases for Fiscal Years 2007-2011, is supplied by the District, using its Position Control database. All calculations are by the District.

The District’s calculation takes the sum of the salaries for teachers year over year as the basis for finding line 3, the increase in average salary. To that is added, the savings due to turnover, line 2 (the total salaries of the retiring/terminated teachers minus the total salary of the replacement teachers divided by the prior year’s total salary), giving us line 1; Average increase in incumbent’s salary. This method has the advantage of being fiscally relevant as it is based on the total of actual salary costs and is a well used and accepted method of finding an average. Dave, in his desire to be overly fair, has (for all the years in the analysis except for 2010-2011 where there were no base raises) added in some theoretical raises for those retiring that has the effect of slightly raising line 1(meaning indicating higher raises) by a few thousandths of a percent.

-1’s preferred analysis focuses on taking an average (the geometric mean) of the individual percentage increases. In the case of D203 teachers, that returns a slightly higher percentage than the District’s method. From a financial point of view, or put in the latest pet term; from a “dollars” point of view, this higher percentage is meaningless. The fact that it is higher simply tells us that the lower paid teachers are getting slightly higher percentage raises. A good thing frankly, as if it was lower than the District’s average, it would tell us that the higher paid teachers were getting a larger share of the raises. Regardless, the percentage has no fiscal relevance. None whatsoever.

The bottom line to all of this is there are two percentages, both are legitimate in their own way, and frankly are not all that terribly far apart from each other. Complicating an exact head to head comparison is the slightly different data sets that each analysis uses.

I apologize to all readers for essentially wasting their time battling back and forth with -1 over essentially, nothing. Did that a year ago, made the point at the beginning of this thread that I wasn’t going to do that again here, and then fell back into the trap of responding. -1 can call Dave. I will guarantee that he will then claim Dave agrees with him, ergo the analysis is wrong, and that I don’t understand it. He has done as much from his previous conversation with Dave and his FOIA of documents,spuriously claiming they “prove” all manner of things. Fine, he can write thousands upon thousands of words from now to eternity; claim whatever he pleases. Will Dave be calling me to change his own analysis or its wording based on his conversation with -1?

Doubt it.

Thom Higgins

QE203.org

I ask ...do you understand how line 1 has nothing to do with individual raises? It has to do with (actual plus theoretical raises) divided by sum salary the year before.

That operation tells us what happens to a dollar of salary. There were, say, $100M of salary. Assume there were $5M in real and theoretical raises. Line 1 would be 5%. This can be calculated by 5/100=.05 OR (100+5)/100 - 1 = 1.05 -1 =.05. Same result. For each dollar of salary the year before, we would have 1.05 in salary.

What happens to a dollar of salary.

Note that in the calculation, there is no mention of number of teachers or any individual raises being used for the final calculation.

Now to get the raises, he did need to apply individual raises to everyone. He then added those values up, becoming agnostic to the individual sources of such increase in salary once he added them. See below how the number of FTE can be used, but again tells us nothing about [average {% increase in salary for incumbent teachers}].

As I wrote, it matters not that the new salary is included or just the raise, it is the same operation and an equivalent value whether you want to use a ratio (like 1.05) or the corresponding % increase (say 5.0%)

Please accept that LINE 1 has to do with what happens to a dollar of salary..JUST LIKE LINE 3. Line 3, as you have pointed out endless times and had minimal disagreement over the calculation, shows "what the taxpayer sees" (for salary).

Okay, then taxpayer does not see any individual raises. The taxpayer sees total dollars spent on teachers salaries. So LINE 3 represents what happens to a dollar of salary once turnover takes effect. It also represents the [% increase in {average teacher salary}] .

If I can get you to finally realize that, I think I may have a breakthrough. Your lines are agnostic to individual % raises even though individual dollar raises (real and theoretical) were used in computing them. And even though I use the word "average" in my description, it is modifying a very different noun.
.
.
.
If Dave claims that his calculation has anything to do with an average percent raise (as averaged on the unit of a TEACHER), I will ask him to resign. No joke. we cannot have someone in charge of finance who does not get numbers and perpetuates inanities. But I am sure he gets it, so I have no concerns. I once again suspect that it is you who is lost.

So close, yet so far.

I will call him this week and report back.

Once you get line1, I will discuss why my numbers are different. As I said before, my numbers and Dave Zager's numbers have no quarrel with each other. They can coexist peacefully when properly described and understood.

That is still lacking in your chart.
.
.
notes:

LIne 1 can also be seen a %increase in average salary if everyone stayed. Let there be N teachers and divide the numerator and denominator by N. Using the above 100M and 5M values:

105M/100M = (105M)/N / (100M)/N = theoretical new average salary/old average salary or % increase in average salary had everyone stayed.

This is decidedly NOT average annual increase in blah blah blah.

This is neat and tidy because it fits beautifully with line 3.
line 1 = %increase in total salaries if everyone stayed
line 3 = % increase in total salary after turnover
line 2 = % saved by turnover.


or...

line 1 = % increase in average salary if everyone stayed
line 3 = % increase in average salary after turnover
line 2 = % saved via turnover

All of these have to do with what happens to a dollar of salary.

Wishing a happy Father's Day to all the dads out there.

-1

-1,

Dave and I have been through the analysis repeatedly (and recently as well). You may not like it, and you will probably continue to quibble in all sorts of ways about the logic and definitions, but in all kindness, I’m done with the conversation. Nothing changes and to continue is the definition of insanity. If you choose not to accept the analysis, C’est le vie!

As I have said repeatedly:

The philosophical basis for Lines 1-2-3, and the data itself for Overview of Teacher’s Salary Increases for Fiscal Years 2007-2011, is supplied by the District, using its Position Control database. All calculations are by the District.

The above is 100% true, I have reviewed the definitions and other issues with Dave, and he is fine with them, even in light of your conversation with him some time ago. That’s good enough for me.

Thom Higgins

QE203.org

.

Some Responses/Observations

1. Line 1 Calculation

I never understood exactly what Zager was doing to Line 1. Line 1 should be very close to what -1 calculates since I (and my predecessors) calculated the number the same way.

But if Thom understood what Dave had told him (a big assumption), then Zager's numbers will distort the calculation. While the "typical" teacher realizes a 6 to 7 % increase due to step (longevity-time with district--3%), salary increase (amount on top of step 2%), and lane (additional eduation 2%), a "retiring" teacher only gets the salary increase. (By the way, he is getting additional increases up to 4% for the retirment kick). So line 1 gets another FTE averaged in at 2% instead of 7% and the kick (4%) offsets the turnover benefit in line 2. Depending on the number of retirees in the mix, this reduces the headline salary increase number.

2. Interesting Thom Quote

"there’s a lot of talk currently about hiring better teachers (and paying them more) and this is supposed to help all the ills in education today. Typical simplistic solution that has some truth to it, but isn’t in itself going to solve all the problems of the urban school district."

First, we in Naperville do not care about the urban district (directly). That is for the people in the urban areas to address. I wonder if Rahm will hire replacement teachers for those in Chicago when they go on strike. Pulll a Walker!!!!!

Second, am I reading this comment correctly. Current teachers are not the best? Wonder why Thom? Union protection, people like you who stop progress. And if teachers are not the best, how can the schools be the best. Where are the best teachers now working? Private schools?

3. Salary is not the issue.

There are enough applicants for 203 jobs to replace every teacher three times. Salaries could be cut in the same manner as the private sector and there would be no shortage of qualified teachers. If Illinois was a right to work state, teachers would not join the union and work for less.

At least the Board is holding back on radical increases. Hopefully they will do so in the next contract. I would like to see a study of the actual work time (contact time in class) for elementary and high school teachers. Since most elementary teachers are paid less than high school teachers, is that a function of a shorter school day? Should high school teachers have more preparation time since they are teaching more intense subjects? Inquiring minds would like to know.

oops

projected total payroll will **not**be as high

I really got to start editing again. Darn lost word.

The point is that the raises alone for the retirees do not make a big difference in Line 1 included or not, but the choice of 0% 2% or 6% does have a slight effect -- the lower the theoretical raise, the lower LINE 1 will be. But that is missing the point of how LINE 1 differs from my similar calculation, and how LINE 1 needs a theoretical raise for LINE 2 to have any meaning, so discussing LINE 1 without those fake raises destroys the chart as written.

But noticing that not including the theoretical raises lowers LINE 1 might help someone to understand how LINE 1 represents what happens to a DOLLAR of salary had everyone stayed.

I strongly encourage Mr. Higgins to read my past entries on this from ??January 2011.

But yes, not giving those fake raises does make the theoretical salary total go up less. Duh!

-1

. Dave’s method of averaging the sum of the salaries is also a legitimate technique.

oohh...you might be getting very close now.

Where does he do this? What does the word average mean to you? This is a ratio of total salaries ==> Line 1 talks about what happens to a dollar of payroll.

(without making his head pop off, I will tell Mr. Higgins that Line 1 is actually an average of the increases each **dollar** gets. Think about it..you can do it.)

-1

As you see, if the raises are deleted it decreases line 1 ever so slightly.

Are you telling me that if we project a lower total payroll by not giving theoretical raises, then the projected total payroll will be as high. Truly stunning. And maybe the first thing you got right (but for the wrong reason, I might add).

But then we lose the meaning of LINE 2.

You do not understand how my Zager-like calculation differs from his calculation for LINE 1, so you cannot begin to known why they are slightly different.

Until you get LINE 1 in full, I will withhold any further confusing talk. It will be informative once you get LINE 1 as what happens to a dollar of payroll.

-1

AARRGGGHHH

While Dave adds theoretical raises for the retiring teachers to his analysis, the corresponding theoretical salaries themselves are not in line 1, just the raises.

You see..I had to stop reading right there. Your maths ignorance is showing. If there is some nugget beyond that, it will have to wait.

Please..please...please review what Dave did and stop talking out of your keister.

I am bleeping serious.

look,,,,RAISE ($) PLUS LAST years salary ($) equals theoretical salary.

(Theoretical Salaries)/(LAST YEARS SALARIES)=

(LAST YEARS SALARIES + THEORETICAL/REAL RAISES)/(LAST YEARS SALARIES) =

LYS/LYS + TRR/LYS =

1+ TRR/LYS

So if you want to say Dave's LINE 1 is only TRR/LYS then fine. I have said MANY times that either we use a ratio of total salaries or that ratio - 1. They represent the same thing. I call a 7% raise for a teacher to be the same as a 1.07 ratio of year over year salary. I call a 6% increase in payroll a 1.06 ratio. (fwiw, you need to take the GM of the ratios, not % in any sane analysis)

So...LINE 1 is TRR as a percent of LYS .

So,...LINE 1 predicts what will happen to a DOLLAR of salary.

It has nothing to do with "Total average annual increase to compensation for incumbent educators between each consecutive year" other than using similar numbers in a different way. Once again, the word *average* is misplaced. "% increase in sum salary of all incumbent educators between each consecutive year" might be okay.

This is not hard.

Also, unless I seriously misread what you wrote before or you wrote the wrong thing, Dave said that *including* the theoretical raise vs using only the actual raise only changes things a bit. This is true, but he'd be removing the people with the theoretical raise from the denominator and we then cannot add Lines 2 and Line 3 to get Line 1. I can give more info on this, but it is beyond you right now until you really get line 1.

Despite your missteps above, I think you are close to getting it.

-1 (not proofed)

I could buy into itif total spending flattens.

I see no reason why class size can't be in the 38 to 50 range IF the instructors are
Superstars with private sector experience in management and/or logistics.

The prolem with Gates is that when people get big money they forget the value of money (just like any other commodity). for proof, justblook at the effectiveness of large investment groups, like Calysle, Blackrock, Fidelity, etc.

Dude,

Yeah, there isn’t an appetite, although there is talk (most notably by Bill Gates and his foundation) that you can hire superstars, pay them more, and adjust class size upward to keeps costs down and all will be well. Don’t know of any districts giving it a try. Regardless, there’s a lot of talk currently about hiring better teachers (and paying them more) and this is supposed to help all the ills in education today. Typical simplistic solution that has some truth to it, but isn’t in itself going to solve all the problems of the urban school district.

-1,

Where you go wrong is your claim that LINE 1 represents what would have happened to a DOLLAR of salary had anyone stayed. btw I think you mean had everyone stayed; that has been your previous statement.

While Dave adds theoretical raises for the retiring teachers to his analysis, the corresponding theoretical salaries themselves are not in line 1, just the raises. Therefore your claim that Line I represents what would have happened had everyone stayed is incorrect. Dave adds the raises to the analysis out of a desire to be overly fair. As you see, if the raises are deleted it decreases line 1 ever so slightly. I’m not going to worry about a few thousandths of a percent either way. Would you prefer it was removed and the percentages in line 1 are reduced?

In the end, you use a legitimate technique that finds the average of the individual increases. Dave’s method of averaging the sum of the salaries is also a legitimate technique. I will note that your duplication of Dave’s technique returns values that are on average .4% higher, which I ascribe to your data’s difficulty as it relates to FTE’s. I assume that “noise” is in your average of the individual raises percentage as well.

As I have stated previously, neither analysis is perfect. I'm content that the Overview of Teacher’s Salary Increases for Fiscal Years 2007-2011 is a fair minded discussion of wage growth for D203 teachers.

Thom Higgins

QE203.org


Mr. Higgins,

Let me try one last time because you are so close to getting it.

LINE 1 represents what would have happened to a DOLLAR of salary had anyone stayed. I've said this before and if you check the old blogs, you will see my maths.

It does NOT represent average annual anything. It does represent (approx) annual % increase in total salary had everyone stayed.

Line 3 is what the total salary did increase by (subject to FTE variance) so Line 2 is the difference between Line 1(what % the total salary would have increased) minus Line 3 (what % the total salary did increase). Voila! Simple as that.

Since your question and Zowie were based on a repeated ratio being applied to a specific teacher, I calculated an average % increase in salary for incumbents via a geometric mean which then could be used for your calculations. Each of these ratios represent the year-over-year multiplier to total salary of a TEACHER. Te unit here is 1 FTE. And if the scatter gram is relatively stable over time, then these multipliers could be used to project what could happen over a career as one point of the scatter plot is replaced by another from the previous year..

So when someone asks what was the average percent raise (or average percent increase in salary compensation) for incumbents year-over-year, my number is the one to use. It is averaged over the teachers, not the individual dollar. That can then be applied in your Zowie type calculation or that number can be compared to what other workers were seeing in the same time frame.

If you want a theoretical value of what would have happened to a dollar of salary had everyone stayed, then Line 1 is your number. Note that the TT did the calculation in a similar way of total payroll ratios. They did not calculate average % raise -- even if they claimed they did.

It took my a while of thinking before I came up with the dummy variables needed for my spreadsheet to do what it does.

You need to stop hiding behind someone else's words -- regardless of who they are -- and start thinking for yourself without blinders. The description of Line 1 is incorrect. You need to figure this out.

I am sure if you ask Dave Zager the correct question, he will agree. It may be that you are not capable of that, but when I spoke with him last January, he got it.

-1 (no proof-reading)

I will go out on a limb here and state that nationally there will NOT be an appetite to increase total costs for education and teachers.

This is not to imply that individual teacher pay won't increase, but the total school budgets will stay in the same line. Hey have been on historically. We will get pay for performance, but things like larger class sizes (hey, if they are really better candidates they can handle larger classes!), greater individual contributions to their medical coverage, and switching pensions to 401-k like vehicles will keep total comp and costs in line.

Empty Pockets,

The conversation between -1 and myself should property be private. I’m sure to everyone else it’s a lot of mumbo jumbo, sorry. You are correct that the analysis I do, and for that matter -1’s as well, do not include benefits.

As far as medical insurance costs, District 203 educators pay 30% of premium for their first two years and then 15% thereafter. 203 has had excellent success keeping medical costs down for a number of years, mainly from switching to a self insured program administered by BC&BS in the 2007 fiscal year. Their premiums, starting in 2007 have gone up 0%, 4%, 0%, 0%, annually with a 5% increase in 2011 and most likely in 2012. Even with these modest increases the fund has generated a significant reserve that the District is trying to work down. There is a joint Insurance Review Committee that works to keep costs down. They have recommended 4 changes for the coming fiscal year that will save approximately $1 Million.

Lastly, and not to provoke you, but nationally the talk is of improving the pay for teachers in order to attract higher caliber applicants. Not going to happen frankly unless the economy improves dramatically and maybe not even then.

-1,

As I said previously, I’m not going to change something that I didn’t write without their permission. I’m sorry if you are not happy with line 1, but Dave is, and that’s good enough for me.

Thom Higgins

QE203.org

"Just how much are teachers getting?" So much jumbo mumbo being discussed. it is almost impossible to get beyond Higgins comments. Part of a salary package includes medical insurance. It seems most or all of that cost is passed onto the taxpayers and is not included in calculations of pay raises.

Since the only competition for education comes from private schools, then the pay should be on par with salaries of private school educators.

Since that will not happen then the next contract discussion on pay should be about how large of a salary decrease will public school teachers accept.

I am sad to know that you had to talk with Dave Zager to know the wording for Line 2 was wrong.

I have not had many, if any, mathematical missteps on this blog. The wording you use for LINE 1 is still wrong.

We've now taken care of Line 3 and Line 2. Almost there...

(hint: average annual has no meaning in the ratio used by LINE1)

-1

All,

I have posted the June 4, 2012 BOE Workshop Recap on the QE 203 website. Of note is the first presentation regarding the Committee for Professional Innovation that is a joint effort to transform the existing professional development salary structure into something more innovative. Well worth your time to read.

For -1,

I had a chance to meet with Dave and you will be happy to know that he agreed with your comment on his line 2 explanation. I have made the corresponding change to the analysis along with adding some additional bits of information elsewhere in the document.

We also spent some time talking about his adding in a hypothetical next year’s raise for those retiring in the analysis. Apparently, he does this in some of his work for the District. He indicated to me that he added in the applicable base increase (the District’s language). For 2010-2011 there was no base increase. For the 2008-2009 and 2009-2010 calculations that means he added in a 2% increase (3.3% for the 2006-2007 and 2007-2008). We did a quick calculation and found that removing the 2% for 2009-2010, reduced line 2 from 1.69% to 1.65%. As we subtract line 2 from line 3 to find line 1, this will have the effect of reducing line 1 by the same .04%. Depending on the number of employees retiring, and the base increase percentage, this value can fluctuate a bit, but bottom line is we are looking at a reduction of a few hundredths of a percent, all of which has the effect of reducing the average annual increase percentage for incumbent educators, should you desire to remove/ignore the calculation.

Thom Higgins

QE203.org


Once again, totally classic. I laid out the format, you and Zager tweaked the numbers.

I calculated line 1 in a very similar fashion as -1. Zager had a shortcut to project that number for when actuals would not be available (say fiscal year 2012 and 2013. He could always measure it against the data base he supplies to ISBE and who in turn, allow Champions to download.

With declining enrollment and the potential for efficiency, salary costs for the district should be in the -5% area, not up 2%. And let's start two tier!!!!

Dave Zager wrote:

"As to the authorship of the descriptions in (1), (2), and (3). As you read the emails, you will see that the origination came from Dan Denys – he supplied the first draft to get the process started. It was then edited/commented upon by myself and Thom Higgins. You would have to follow the trail of emails to see how it morphed to its present state. We also had some phone conversations and at least one face to face meeting."

This is for anyone who can get past their own cognitive dissonance.

truth ftw

-1

Rereading the FOIAed emails, it is clear that the wording from LINE1 came early on, likely from Dan D.

Zager calculated some numbers and they were close enough in concept to Dan's words (and how the TT calculated things) that it was acceptable. That does not mean that the words and the calculations match. It is frightening to see that this is still unclear in Higgins' mind after all this time.

-1

-1,

I’ve nothing more to add to my prior comments. Continuing back and forth like this is the definition of insanity.

.

For those new to reading this thread I will reproduce the following:

For those interested in a detailed analysis of District 203 teacher’s salary structure and the last five years increases and net costs, you can go to Overview of Teacher’s Salary Increases for Fiscal Years 2007-2011

You will note that for the 2007-2008 years, increases averaged in the 6% range, falling to the 4% range in 2009-2010, and falling to 1% in 2011. 2012 and 2013 increases will rebound to the 3% range. Turnover (replacing older more expensive teachers with newer less expensive teachers) reduces the actual cost to the district (and thus taxpayer), on average approximately 2%, a year, leaving us with an average increase of 4.62% over the five years and an average net cost of 2.51%, slightly higher than national wage growth for the same time of 2.34%.

As I indicated previously, the philosophical basis for Lines 1-2-3, and the data itself, is supplied by the District, using its Position Control database. All calculations are by the District.

.

-1,

I see that Mr. Denys is claiming ownership of Lines 1-2. Perhaps you should voice your complaints to him ;)

Thom Higgins

QE203.org


Looks like Thom has gone full circle. I originally created lines 1 and 2, to reconcile the increases of those teachers who stay each year (how else can you calculate a salary change????) to the net increase in salaries that are lower due to turnover. Back when I prepared this analysis, the basic question was "Who should benefit from the turnover, the District taxpayers or the teachers?" Historically, it had been the taxpayers. With the fiscal insanity that was instituted under Weber and perpetuated by Leis, this shifted to the teachers. (Any small wonder why Mitrovich who seemed to reign this in left? Might his personal position to give the best education at a fair cost to the taxpayer like most people?)

So all of this darting around by Higgins is to duck this issue. A classic liberal tactic, do the deed, deny it is being done.

With the Democratic decline in the economy becoming permanent, people will have less money to spend. Home prices are declining at double digits since taxes are not also declining. It is all about purchasing power. This can be rationalized. We called for a two tier salary system starting three years ago so new teachers would earn 15 to 20% below current teachers. In ten years, this would allow for substantial reduction in salaries. Further, the District should continue to reduce staff both because of declining enrollment and more efficient delivery of services. This could lead to lower taxes and potentially make District 203 an attractive place to live rather than to foreclose and short sale houses leading to a downward death spiral.

And lastly, where is the wonderful 203 think tank on the concept of the shortest school day in Illinois? A board member from a north side school district relayed that they just settled their contract with 3%/2%/CPI/CPI increases that INCLUDES THE STEPS AND 30 EXTRA MINUTES PER DAY. How about a study of real work time and some meaningful productivity gains? Oh, such a concept is not in line with the pro teacher philosophy of Higgins and QE203. Others are doing it, why not 203?

One could go on, but what about educational enhancement? Don't parents in 203 want the best for their children?

Higgins wrote:

I think it’s highly unlikely that Mr. Zager believes you over his own work.

I do not think my work and his work have any quarrels with each other. I can link to my reply in the past about this, but you are once again dreadfully off base and deceptive. It is in the descriptions of his work that there are errors; some from you and some apparently from him. I am sure he'd be happy to change the errors attributable to him. Will you do the same? You can even do it under the cover of dark like the Q&A kerfuffle.

truth ftw

-1

Please point me to a district document with a LINE 1.

Simple.

I have reviewed the documents and they do have a number which represents a guess at future years salary cost. That is much different from LINE 1 which assumes everyone stays.

Again $100 to NEF when such a document appears and is either linked or posted.

-1

Mr Higgins,

There is not a difference of opinion.

Please explain how LINE 1 represents an average of anything. You keep calling it that. My view that it does not represent an average is not an opinion. It is a numerical fact. It also represents a theoretical value -- even when calculated as an "actual"

Please explain whether LINE 1 and LINE 2 are calculated by Zager for any other reason than this chart. This is a very important question for you and the reader of the chart to understand the answer to.

Please recheck the wording for LINE 2.

And given your attempt to attack me on language, please review and amend your statement on what you claim an increase is and what you claim a raise is. What you wrote was a doozy which ended up making no sense. It is hard to reply to gobbledegook.

These are not attacks. These are factual issues you need to clear up before any meaningful discussion can occur.

Simple. Start there.

Once that is done and you understand the meaning of your own chart, I will re-review the concept of geometric mean.

Some documents of interest:

FOIAed emails between Higgins and Zager.

http://www(dot)medi(dot)fire.com/?za1192fzx3c13fc

http://blogs(dot)suburbanchicagonews(dot)com/newsblog/2011/01/school_report_cards.html#comment-359931

Hmm... those questions seem to not be answered. You DID answer the first question in the negative, but miraculously, the language that I called you out on (and you immediately vigorously defended) is now gone. Why would that be?

I will continue to assume that I do not owe the NEF any more money as offered in January 2011 and more recently.

And I should have listened to myself before.

http://blogs(dot)suburbanchicagonews(dot)com/newsblog/2011/01/school_report_cards.html#comment-250010

-1

-1,

Regarding your recent comment about your list of questions, I refer you to the first post in this thread:

Almost a year ago -1 posted a number of questions to me. The ones that were legitimate questions are answered in the extended responses and Q&A. To the extent that there are meaningful questions and comments, I will be glad to respond. What I’m not going to do is re-argue the topic once again, ad-infinitum. Interested readers can go back into the archives if they want some cheap thrills.

As I’ve indicated recently, your childish comments/attacks impede us from having a meaningful conversation. Nowhere was that more evident than in some of your prior questions to me that, just like your recent post, spend a lot of energy trying to create the impression I don’t understand the concepts involved here just because I don’t accept your view.

A recurring example is your harping (that you reproduce once again below) that Line 1 and 2 exist only because of my misunderstanding. If you attended the board meetings, and actually knew and talk to staff as I do, you would realize that these numbers are quite alive and well when salary conversations occur.

I commend you for all the time you have spent creating your spreadsheet looking at teacher salaries, and I appreciate having someone cast a critical eye to my work. As you know, in the past you have offered a couple of helpful corrections that I have gladly made. However, there are many other things that I am 100% comfortable with that you have problems with. That’s life. You are entitled to your opinion as am I. But you lose me completely when you act as though you are the sole possessor of “the truth” and when you make statements such as: Believe the anonymous blogger. I am sure Zager does.

I think it’s highly unlikely that Mr. Zager believes you over his own work.

Thom Higgins

QE203.org

Higgins,

I made a list of questions to be answered a LONG time ago, and you still have failed to answer them. You asked for a list, I gave it.

You cannot understand what an average is as you still have a label for line 1 as average annual blah blah.

A conversation is not possible when one person does not understand the basics.

I have previously explained my method and why I use it and how it can represent how salary works over a career with a relatively stable teacher population just like you did in the emails to Zager when you did not understand that the end-of-laners WERE included in his estimation of career averages. And when you said Zowie.

The fact is that I HAVE answered the question many times. You are incapable of seeing it.

The LINE 1 and LINE 2 in your chart only exist because of your misunderstanding.

I'm not trying to prove anyone wrong. I am hoping that someone who claims to be part of an organization which claims to be a watchdog for 203 actually watches 203 critically and does not parrot their words without thinking.

Believe the anonymous blogger. I am sure Zager does.

-1

This is my third time trying to post this comment. Why all the drops? If you have an issue, why not e-mail back.

I applaud -1 trying to level with Thom Higgins. However, it is to no use. He is a zeolot, who for some reason is on a mission to not only protect, in fact, promote higher salaries for District 203 teachers. These salaries are destroying this community as our property taxes are still very high (interesting point, Greece just raised their property taxes to 2% and people just don't pay, our are 2.5 to 3%).

And these salary policies such as the retirement kicks are bankrupting the state. Why would any one be surprised that Madigan wants to transfer the excessive costs caused by OUR SCHOOL BOARD back to us. Even the District resigned itself to pay the costs, in fact, DOUBLE what Madigan proposed.

So we end with overpriced education that is the best among the worst. A total shame. At least I feel good that I was able to provide my children with a quality education that is not available in District 203. Hear that, NOT AVAILABLE.

So much for world class.

A few comments:

For those interested in a detailed analysis of District 203 teacher’s salary structure and the last five years increases and net costs, you can go to Overview of Teacher’s Salary Increases for Fiscal Years 2007-2011.

You will note that for the 2007-2008 years, increases averaged in the 6% range, falling to the 4% range in 2009-2010, and falling to 1% in 2011. 2012 and 2013 increases will rebound to the 3% range. Turnover (replacing older more expensive teachers with newer less expensive teachers) reduces the actual cost to the district (and thus taxpayer), on average approximately 2%, a year, leaving us with an average increase of 4.62% over the five years and an average net cost of 2.51%, slightly higher than national wage growth for the same time of 2.34%.

As I indicated previously, the philosophical basis for Lines 1-2-3, and the data itself, is supplied by the District, using its Position Control database. All calculations are by the District.

For -1,
Your “I won’t answer your question till you do what I want” attitude only serves to illustrate your childish demeanor. It’s too bad; if you weren’t so consumed with bashing me we could have a meaningful dialogue.

Thom Higgins

QE203.org

I will repost my geometric mean concept once you answer a few questions and get your own house in order.

You certainly seem to want to use the numbers as investment-like in both your Zowie comment and your FOAIed email. Why the concern now?

How do you think we should average ratios if we want to predict an across the career kind of growth (ooh..like an investment)? LINE 1 is certainly not averaging any ratios or raises or anything. It is (indirectly) a ratio of theoretical averages. There's a winnner

Maybe ask Zager while he is cleaning up the LINE 2 Q&A description. Also, LINE 1 (average annual blah.... is WRONG still) in your chart. The Q&A are still messed as the question about RAISES and LINE 3 is factually wrong. Read carefully and figure out the sleight of hand involved. I'd like to see the raw comments from Dave Zager and the actual question asked.

Does Zager ever calculate LINE 1 or LINE 2 for anyone other than you?

-1

All,

I have posted a detailed recap of the 5-23-2012 D203 Board of Ed meeting on the QE203 website. If nothing else, there was a detailed presentation/discussion on D203's implementation of the Common Core standards that I urge everyone to take a look at. There is also a link to an audio file so you can listen to the meeting if you choose. You can see the recap here.

A few comments for -1:

Hey, would you be kind enough to post (or re-post) why you believe using the Geometric Mean of the individual teacher’s increases is the most appropriate method of finding the average increase. Again, I can see the utility of using it to analyze the rate of return of an investment as there is a relationship between the numbers, but there is no relationship between the percentages you use for your analysis of teachers, so I’m curious.

The 2010-2011 data is out. Are you planning on updating your spreadsheet?

As to your last two posts, Al’s putting his foot down; it’s really pointless to respond, sorry.

Thom Higgins

QE203.org

I don't care what you are calculating, who does it, or where you got it if you are calculating the wrong thing and using the result in the wrong way, and you are doing just that!

The average individual raises have been in the 7% range for 15 yeas, and no misuse by you is going to change that.

Just admit it and let's all move on to real issues in 203!

Trying to be serious...

Higgins wrote: "As an aside, I briefly looked at you alpha data, and you have teachers who you drop for raises that are “too high” and yet the following years salaries verify they did receive that raise. For example, cells A244-A250."

www(dot)mediafire(dot)com/?r4ix17y1itayb0f

Can you please tell me what you are talking about? I see no problem in those cells. Give me teachers initials and years and which document you are using. I also looked at the 1999-2009 document and could not find anything untoward.

In the alpha year-over-year, all raises which are used are highlighted pink. That will change if you alter the values on the first page.

If you are truly concerned that I excluded an increase in salary over 20% which was real, then I do not care. As I said, my analysis is a lower bound for 1.0FTE teachers present in both years.
.
.
.
Mr. Higgins. I would like to suggest that any possible "gotcha" you think you might have on my analysis had been answered multiple times even before you asked in the School Report Cards thread which is archived in January 2011.

I keep asking the same questions because you do not answer them. You can see from then old thread that .. lo and behold .. the new descriptions for LINE 1 and LINE 2 (when corrected) are what I wrote up in January of last year.

Ahem...

Believe the anonymous blogger.

-1 being thankful to all military and their families today. It was great to see the applause given to the veterans and to the families of those who died in combat.

Anonymous,

As I have repeatedly stated,the philosophical basis of Lines 1-2-3, and the data itself, is supplied by the District, using its Position Control database. All calculations are by the District.

Thom Higgins

QE203.org

1) There is a difference between typos and flat out ignorance.

2) You do not get a pass for not being able to recognize the error that Dave Zager made in his descriptions. It has been 3 years with me and 5 years with Dan Denys and you still cannot get it.

3. Name calling. Here it comes. Are you delusional about the inspiration of the salary analysis that you post? Do I need to link each and every post that asked me and Dan D to meet with you and Zager to clear up what you thought was a misunderstanding on OUR part? I can also re-post the FOIAed emails and show the meeting set-ups etc... Wow is all I can say.

Higgins wrote:

The complaint about using the wrong words can be applied to you my friend. How many times have you used the word raise when you should be using increase ? Base, step and lanes are raises. If they take on additional duties then it is considered an increase. This is specifically why Line 1 uses increase and not raise as it's a broader descriptive.

What exactly are you smoking? Are you claiming that LINE 1 takes into account only additional duties? Deep end -- meet Higgins. Higgins -- meet deep end. And how is it broader? And can you find a source which shows where raise and increase are defined as such? Furthermore, since additional duties and stipends ending up having a lower %increase, they weigh down my calculation. But since you still do not understand the difference between the numbers, that will be lost on you. Hello..Einstein.

5. My analysis intentionally excludes large % increase in salary to make sure that there were not errors added in. It was to make it as critique proof as a LOW END number. If you'd like it to be larger, that is fine. I would not disagree. Can you find any paycuts over 20% that I should have included? Didn't think so.

6. I have no problem that my average % raise cannot be used to calculate exact costs. No problem whatsoever. The fact that you think that somehow means something is wrong with that value is what is sad. It is the manifestation of the individual raises, along with turnover, which creates LINE 3.

7. LINE 3. We've been through this before and I have nothing new to add. If you'd like to link to my prior posts on it, have at it.

not edited....-1

-1,

The problem is one of fundamental understanding and philosophy.

His belief is misleading as he calculates 203's "average raise" based on total numbers (which is distorted downward by overall turnover) versus INDIVIDUAL avg raises.

In this way, his advertised. "average raise" will always be significanly lower than the real average. He has continued this nonsense for years. When you add in his mis-applications of math which you have so often pointed out, his numbers are literally worthless.

-1

The complaint about using the wrong words can be applied to you my friend. How many times have you used the word raise when you should be using increase ? Base, step and lanes are raises. If they take on additional duties then it is considered an increase. This is specifically why Line 1 uses increase and not raise as it's a broader descriptive.

You post doesn't make sense to me here. First you say:

LINE 3 -- no argument from anyone.

Then you say:

LINE 2 and LINE 3 on your sheet do not exist anywhere else as far…

Did you mean LINE 1 in your first statement?

As for your suggestion about line 2’s description, as you know I didn’t write it. I was at last week’s BOE meeting and wanted to ask Dave about your comment, but the meeting ended at 11:00 and everyone wanted to get home. I’m more than happy to make changes to the salary analysis, as my adding lanes to the stipend description illustrates. I wrote that section, so it’s mine to revise. I’m not going to change something I didn’t write without agreement from the author. I will ask when I see him again.

.

As for the rest, we seem at the same impasse. You are unwilling to accept the validity of turnover on the actual net cost of the increases teachers receive. And yet Line 3 is easily verified by looking at the ISBE average salary numbers. It is inexplicable to me that you won’t accept the validity of the Line 1-2-3 construct.

I will also say that your desire to bash me and the analysis impedes any sort of informative give and take. Some recent examples:

1. I started the initiative to have the district help create a document that would help everyone better understand salaries and increases. I have spent countless hours working on getting it out and revised twice. What do you keep repeating?

Lest anyone forget. The only reason that chart exists is because Thom Higgins thought that the average raise for incumbent teachers was 3.5% instead of 7%.

This is the kind of childish commenting that should end if there is to be a respectful dialogue.

2. You use data from the ISBE. It only counts 1100 or so. You have read my statements in the past and you can readily confirm there are about 1300 certified staff. The district’s analysis calculates based on that higher population. Why will you not acknowledge this difference?

3. The simple fact is you have to drop people from your list. As an aside, I briefly looked at you alpha data, and you have teachers who you drop for raises that are “too high” and yet the following years salaries verify they did receive that raise. For example, cells A244-A250. You write this is flawed data, it’s not. All this to say you have some limitations here. You need to acknowledge them not continually try to bluster your way out of them.

4.Your preferred calculation can’t be used to finds costs. Why won’t you acknowledge this?

5. I think you are being completely disingenuous here:
And using ECI-W only as a comparison hides the other costs of employment for which the ECI was created. If you are talking "cost to the taxpayer" you cannot use ECI-W. Be truthful.

Both salary analyses discuss wages only. It is entirely proper to use ECI-W.

I’m sincerely not trying the pick a fight here, but it’s a waste of time to just go back and forth ad nauseum.

A couple questions if I may. I can see the utility of using the geometric mean for calculating percentage rates of increase (or change) from a financial perspective where there is a relationship between the numbers i.e. rates of return over time. As there is no relationship between the 1100 teacher’s and their salaries, what is your rationale in using the Geometric Mean?

Thom Higgins

QE203.org

Sorry if it felt like "bashing". Not sure what I was bashing in my latest posts. My prior post with the bashing header was not meant to imply I was trying to bash you in any of my other posts; it seemed as if the thread was heading that way so I wanted to stop that.

The fact is that you continue to use the wrong words for what the numbers represent -- in large part because you continue to show a comprehension deficit of the mechanics of the calculations used to get the numbers -- making it impossible to actually discuss their actual meaning and how to apply them.

There are TWO true numbers here, both of which were previously discussed.

LINE 3 -- no argument from anyone.

Average % Raise for full time incumbents -- my calculation -- no argument from anyone but you.

LINE 2 and LINE 3 on your sheet do not exist anywhere else as far as I can tell, unless Zager is asked to calculate a LINE 1 for budgeting purposes assuming nobody retires. That would be silly since there are known upcoming retirees on the 6% bump track. So I doubt he makes that calculation, especially post hoc.

Your salary analysis sheet needs some additional cleaning up. I have made some suggestions, one of which you mocked since Zager supposedly prepared the description. I am willing to pay up to NEF if my suggestion was wrong.

Lacking a demand for money, I will assume I was correct or you are too timid to ask Zager about the correction.

-1


-1,

You continue with your churlish, and frankly, childish comments. How refreshing it would be if you would actually discuss the issue, instead of writing solely with the intent of "bashing"(your adjective) me.

I can easily make my position understood without resorting to name calling, what's your problem?

Thom Higgins

QE203.org

Higgins,

Short form:

I calculate an average percent raise (7%) which Higgins now knows to be true which made Higgins say Zowie!
.
.
.
.

It would be a waste of time trying to correct your myriad errors. A few points.

1) FTE do not matter when calculating raises for full=time teachers. They are all 1.0FTE. Using partial FTE lowers Zager's LINE 1 since he assumes 6x.5 FTE will get appropriate steps (which smaller since partial FTE tend to be newer teachers and thus smaller steps and will tend not get a lane.)

2) The ISBE lists 1110 teachers.

3) There IS a column for average salary of 1.0FTEs. Look off to the right. it is a bit higher than the ISBE because i do not include partials.

4) Zager's LINE 1 and LINE 2 are calculated the same way -- with the same theoretical raise. It does not matter if he makes up a number for LINE 2 or LINE1. The "savings" value is a number created to make you understand that raises were 7% not 3.5%. It has a purely theoretical value. So no, I will not calculate a theoretical value which was made only so you could become educated.

5) Correct the description for LINE 2 and apologize.

6)"Calculations based on traditional method of calculating an average; the sum of the teacher’s salaries/number of teachers. " Uh...sort of yes and sort of no. Lines 1, 2, and 3 are ratios of averages not averages themselves. You still seem to not understand this. I also again ask you to look up mediant.

-1 .. lacking the time and energy to go on.

Why do all of you always make this more complicated than it has to be?

Delusional... yes I'm sure that s the case. Everyone followed your logic and agree with you. lol

I was dinking around tonight and found the following 2/3 completed. As it might serve as a guide for readers of the blog, I finished it and here it is. Consider it a quickie “cheat sheet” of the differences in -1’s and the District’s calculations:

-1’s spreadsheet:

Preferred calculation works off the individual teacher’s percentage increase, calculating the geometric mean of the total of the individual increases.

Positives:

1.Uses data supplied from the ISBE.

2.Large number of years available.

3.Includes stipends (coaching, administrative duties, teaching additional classes, etc.).

Negatives:

1.Contains only 1100 teachers

2.Does not have the ability to solve for FTE, creating problems in calculating increases for any teachers whose salary increase is an outlier on either the negative or positive side of the group. In order to mitigate this, the spreadsheet has variable filtering process where the user can decide what cut-off points to use. This has the effect of deleting a certain number of teachers depending on what cut-off points are selected. Preferred settings dropped 4% of teaches listed in one example.

3.Is limited to illustrating various methods of calculating averages of increases in teacher’s salaries. It does not calculate the actual cost to the taxpayer for the increases, as there is no way to calculate the savings turnover creates, which lowers the cost to the District and taxpayer.
.

QE203.org Salary Analysis:

Calculations based on traditional method of calculating an average; the sum of the teacher’s salaries/number of teachers.

1.Data supplied is from the District itself, using its Position Control database. All calculations by the District.

2.Includes all certified staff, approx 1300 people.

3.Calculates increases for all 1300 people and solves for FTE. No need to drop people who are outliers.

4.Average Increase in Salary percentage (line 1) can be used to calculate the actual gross dollar cost of the raises.

5.Calculates the effects turnover has (line 2)

6.Calculates the actual percentage increase the taxpayer pays (line 3) and this can be used to calculate the net actual dollar cost of the raises.


Negatives:

1.Does not include stipends; including stipends would lower the percentages slightly.

2.Limited number of years available.

3.Line 1 is a calculated number that is the sum of Line 3, minus Line 2. However, the base increase and the increase due to steps and retirement are known independently and serve as a check. The final component, lanes is more of a variable as it depends on the number of classes passed and is not calculated independently for this analysis.

4.Line 2 calculations are adjusted to include the raises the retiring teachers would have received, had they stayed. The inclusion of this artificially increases line 2 and thus has the effect of commensurately lowering line 1. As the number is small 25-50 annually, and the potential raises they could receive are modest (realistically base increases only) the actual effect is quite small, on the order of a few tenths of a percent.

.

So what’s the bottom line?

As I’ve said before, neither method is perfect. -1 has to drop a certain percentage of employees in his analysis. That’s bad. His preferred calculation has no fiscal relevance. That’s more than a bit noteworthy and he should own up to the fact. He claims his calculation yields the best percentage for someone to compare their own increases to. I have my doubts here, but I will let the claim stand.

The analysis that is done by D203 has the drawback that it doesn’t include stipends. BTW many of the stipends are for coaching, and I remind readers that the sports programs at 203 are self sustaining. The programs pay for the costs including coaches. Thank you Booster Club! It also has an adjustment to turnover as discussed above. Could one fairly argue that it would be better to drop the adjustment, lower line 2 slightly and increase line 1 by the same amount? Sure

Bottom line to the bottom line?

The interesting question is what effect does having to drop say 4% of teachers have on -1’s numbers vs. the effect removing the adjustment for retiring teachers has on the District’s calculations. I can find my number by having the retiree raises removed. Don’t think -1 can solve for FTE on his own. Again, neither effort is perfect.

Thom Higgins

QE203.org


Yep!

Normal people don't question things they "get".

Higgins Wrote:

If we do basic averaging $178,200/$170,000 we find that the salaries have increased an average of 4.82%.

Mr. Higgins, It is impossible to have a conversation with someone who does not understand the basic words of maths. Without a common language all discussion becomes inane.

I have a hard time reading your posts when you do not follow common conventions, and the lack of those common conventions spill over to your qe203 document.

I will one again assume that you are not doing this intentionally but are doing it out of ignorance.

178/170 = (178/2)/(170/2) = 89/85 = % increase in average incumbent salary*. I have no interest in this number. I calculate it only as a foil to Dave Zager's LINE 1. Mine will be higher because it is not weighed down by assumptions of base only raises for highly paid retired teachers. I use real salaries of real teachers employed both years.

How dumb does it sound that I keep bringing up theoretical raises for retired teachers to help explain Higgins' chart. If you want a voodoo number, thar she blows!

Lest anyone forget. The only reason that chart exists is because Thom Higgins thought that the average raise for incumbent teachers was 3.5% instead of 7%.


* As an example, a ratio of 1.04 would represent a 4% increase.

fwiw, my document uses a geometric mean of ratios for a variety of reasons.

short answer:

You still do not understand how the value I calculated makes an average % raise that we can use as a multiplier to see what a salary might do across a career. That is the genius of my calculation and it is clearly lost on you.

Oh...maybe not.

You DID understand it at one point.

http://blogs.suburbanchicagonews.com/newsblog/2009/02/you_pick_the_topic.html#comment-76756

And in the FOIAed emails with Zager you clearly use such a multiplier like I created to try to make a point, and he once again corrects you for not understanding the numbers.

My value represents a tangible value which taxpayers can compare to their own situation. And say Zowie! if needed.

They can then decide whether or not the average % raises given out are higher or lower than the raises they have been getting.

Why do you have a problem with that?

And using ECI-W only as a comparison hides the other costs of employment for which the ECI was created. If you are talking "cost to the taxpayer" you cannot use ECI-W.

Be truthful.

And come back and apologize that you did not understand that LINE 2 has a wrong explanation.
.
.
.
Using a two person example does not show the correct distribution plot of % raises. In fact, before the end of lane, the steps get larger causing higher paid teachers to get larger raises. It is a very complex plot of salary vs % raise and the 6% bumps get picked up in my calculation. They get blunted in Zager's LINE 1, because he apparently gives base only for the presumed (highly paid) retiree raises had they stayed and he does not allow them a theoretical lane change.

-1

One way to deal with the problem of "additional work" putting a near-retirement teacher's raise over the 6% mark that would be fair to both sides is to not have them pay into the pension fund or receive pension benefits based on that work. Pensions should be based on base salary alone, with no allowance for additional work, or unused sick or vacation days (do they allow that for teachers?). And rather than 75% of the final year salary, the pension benefit should be 75% of the average salary of the final ten years of employment. Finally, there needs to be a cap on the benefit that any TRS retiree can receive, say $60K. Retirement contributions on any portion of salary that is over 133% of that cap, should go into a defined contribution plan.

-1,

As I read your post, Einstein’s ghost was whispering to me, so I’m minding the advice and just re-posting a previous comment of mine, really more for anyone else who might be interested. You’ve read it before.

The comment below illustrates how your preferred average, without some additional context, is not terribly helpful, especially from a financial standpoint. If we know what the increase in average incumbent salary is (using your language), your number helps a reader understand the distribution of the raises among the teachers. Here’s the previous comment, slightly edited, and everyone should note that more recent average increases are significantly lower than what is discussed here:

.

His (-1’s) method is lacks relevance if your concern is about total dollars spent on salaries. Allow me to explain:

D203 teachers, over a period of say ten years (2000 to 2009) experienced an annual increase in average salary of, approx, 3.5%. If we look at -1’s work sheet (assuming you use his default settings .8 & 1.2 which takes in an average of 96% of the persons listed) column B, listed as ”increase in average incumbent salary” returns 6.61% and column D, listed as ”average % raise” returns 6.92%. I have a problem with the accuracy of the 6.61% and 6.92% percentages, but that’s for another day.

Which of these percentages: 3.5%, 6.61% and 6.92% have any actual financial relevance to total salary costs?

Answer: The first two only. –1’s preferred number (6.92%) has ZERO financial implications to the District or taxpayer
Let’s use part of -1’s quiz to illustrate:

$100,000- -->$104,000 = 4% raise
$ 70,000---> $. 74,200 = 6% raise
======== =========
$170,000 --- $178,200

If we do basic averaging $178,200/$170,000 we find that the salaries have increased an average of 4.82%. We can test it by multiplying $170,000*10482 which returns $178,194 (close enough). But what of those two individual raise percentages, 4% & 6%? If we take the sum (10%) and divide by 2 we get 5%. This is the “average of the individual increases” and a completely different calculation.

Can we use it (5%) to find the dollar increase for salaries? No, we cannot as, $170,000*105= $178,500.Too high. So, to bring this back to -1’s worksheet and his Column C’s 6.92%; that figure has no financial relevance to the budget. I’ll also make the comment that -1’s calculation can be either higher or lower and still it has no impact on total dollars. Let’s play with -1’s quiz illustration again:

$100,000--->$106,800 = 6.8% raise
$ 70,000--> $. 71,400 = 2% raise
======== =========
$170,000 -- $178,200

You will note that the dollar amount for the increased salaries remains the same, as does the calculation to find the average increase; it returns 4.82% again. But what of -1’s calculation? It now returns 4.4%.

Again, remember what -1’s calculation is. It is the average of the individual increases. If that number is higher than the increase in average salary then, individually, the teachers with lower salaries are receiving a higher percentage increase vis-a vis higher paid teachers. Frankly, from a fairness perspective, I think that’s proper, -1’s number should be higher. If it’s lower then it means, proportionally, too much raise money is going to the higher paid teachers.

In summation: if you care about dollars and not debating points, -1’s number has no financial relevance if we are talking about the cost of the increases/raises. What his number is good for is to help a reader understand the distribution of the raises among the teachers.

Thom Higgins


QE203.org

By the way, you seem to be the only one who can't follow the analogy

xx

Now that's funny considering NO ONE made any comments about your hokey analogy other than my pointing out that it fell flat. I guess by no one commenting or opining in the affirmative you take that to mean everyone understood it?

Wow!!

Anonymous, your Mom must have given you some new words to play with! Maybe you can work on developing a full thought with them?

By the way, you seem to be the only one who can't follow the analogy ---- congrats! You met the soft bias of low expectations set for yourself. Maybe next week they will allow you a social walk around?

Higgins Wrote:

With my line 1 as a reference, -1’s preferred calculation offers an additional bit of information that tells us that teachers below the median salary are receiving greater percentage raises than those above. The fact that his percentage is higher is a good thing. If it was lower that would mean that the higher paid teachers were getting the bulk of the raises. It’s a bit counter intuitive.

Well..not exactly.

Nothing in my analysis looks at median salary, nor do I think my analysis would support what you said. There are a large number of top-of-scalers who get base raises which helps keep down the overall average % raise in my analysis.** The effect is even more acute in Zager's LINE 1 as there is larger salary getting just a base raise in the summed numerator and prior year in the summed denominator. That is further compounded because none of the retirees in his assumptions would be getting lane changes or in the 6% end-of-career bumps. This is part of what makes his purely theoretical LINE 1 lower than my actual W-2 based average % raise for full-time incumbent teachers.

** You made the same error in thinking in your FOIAed emails with Dave Zager as you did not understand his LINE 1 OR my average % raise for incumbents.

Anyway, work on a better description of LINE 2, and then we can finally finally clear up LINE 1 for you.

This does dovetail nicely with the pension discussion as the shape of the % raise curve over a career helps determine the pension shortfall.

I will post some suggestions in the next few weeks.

Hey,

These teachers are the 1% as less than 1% of retirees make more than $60k per year!

Your hysterical anger

xx

not just anger, but "hysterical anger"??? wow Who The? ever hear of Intermittent Explosive Disorder? you should look it up. If you have to go through such a long explanation it should be obvious that your attempted analogy fell flat. try again.

Dan D.,

Thanks. My swag was around $500 million. This was strictly a linear application of attendance to the shortfall, and I agree 203 should probably be a little higher than linear, so I added +$50 million.

:(

Anonymous,

Next time, have your mom read the posts to you. Perhaps then you will get them right! Learn to read and comprehend 'ol son!


Now, to rectify your angry, misguided tirade,   I posted the following comment:


"When a friend of mine expressed interest in the suit, asking where I bought it and the price, I answered "$500 at XXXXX". I also mentioned the $50 trade in deal."


Note the use of the word "price", not paid. This is very key as the PRICE was $500. My mention of the $50 trade in sets my PAYMENT at $450.


In other words, and I am going slowly here for your benefit, there are two economic transactions at play here, one benefitting the other, but in pure econ terms the PRICE of the suit is $500, the net cost was $450, and the average teacher raises in 203 are way higher than the low numbers  Higgins tries to mislead us all with.


Your hysterical anger, your inability to read and comprehend relatively simple concepts, your non sequiter into autos then jumping from $32k to $75k --- all irrational., all just plain sad. What, just found out Glee was cancelled?


 

SOB,

I wish I knew. The legislators don't know. Only the teachers union knows, they are the only ones who get the actuarial numbers.

But it will be large. The "published" TRS unfunded liabilty is $44 billion, if more reasonable numbers were used, it would be $60 billion.

District 203 isn't a simple percentage of this number, rather it is substantially larger due to its generous salaries. A Supremely Wild A** Guess (SWAG), $300 million. Paying that off will take substantial resources.

That is why elimination of all perks since 1990 to these plans should also be part of the solution. Retire at 55? Get 40% of pension, not 100%. Do you want medical? $1,500 per month--actual costs.

And tax public pensions since they were not taxed when the teachers funded them.

Let these people making $100,000 in pensions pay their fair share!!!!

A few comments on the Excess pension payment:

There is a recap on the D203 workshop that discusses this issue and includes links to the Daily Herald article, the District fact sheet, and a video of the discussion here:

http://www.qualityeducation203.org/cms/index.php?option=com_content&view=article&id=101:572012&catid=51:boerecaps&Itemid=60

This from the Recap:

The Daily Herald had a recent series of articles discussing the fact that districts have to pay a significant surcharge to the TRS (Teachers Retirement System) when a salary increase exceeds 6% over the prior year, based on highest four year salaries in the last ten years before retirement. If any increase exceeds 6%, even if other years of the four are well below the 6% and offset the one year, districts are required to pay the actuarial value of the compensation in excess of 6% to pay for the additional pension cost it creates. The bad news is the cost to the District for this is about 9 times the actual raise amount.

Dave Zager discussed why this happened at 203 and how this affected the District in the last two years. Bottom line for D203 is the overwhelming majority of the surcharge amount was because of additional work performed in addition to the regular pay increases (68% of the charge in 2010-2011). The remaining 32% is due to lane changes for additional education a teacher takes
The bad news is more exemptions are going away and we will probably have more of this in the future. Dave Weeks expressed his unhappiness over this and his desire for it to be curtailed. Sounds good, but how do you decide to not promote a teacher to an administrative spot, or tell teachers they can’t, for example, coach or be an IC if they plan on retiring in the next ten years if the extra pay will push them over the 6%?

Additional thoughts:'

Raises over 6% due to lane changes because of additional educational attainment (32% of the 10-11 total) could potentially be avoided in the future by restructuring the lane structure, which actually is in process of happening for other reasons.

Anyone taking the 6% end of career raises has a hard cap and did not have a part in these payments. The rule was effective in 2005 and My understanding is it took 4 years to phase in. Hence the District has only made payments for the 09-10 and 10-11 years.

I believe the 20% raise incentives were prior to 2005.

Personal to -1

Yes, there are steps for stipends. I’ll revise the comment.


When a friend of mine expressed interest in the suit, asking where I bought it and the price, I answered "$500 at XXXXX". I also mentioned the $50 trade in deal.

xx

you actually did pay $450 for the suit, but your Naperville ego got in the way so you had to make sure to tell your friend that you paid $500. god forbid someone would think you are only wearing a $450 suit.

You probabaly have a car that you tell people is 35K because that's the sticker price. You most likely purchased it for around $30-32K, but once again need for people to know the full list price value of your car. now you probably won't be able to resist responding that you drive a beemer that costs 75K!!!!!!!

Dan D. Posted:

"And if the state dumps the pension liabilities on local school district, there should be a freeze on salary increases until tax revenues from tax cap fully fund the increased cost and no use of reserves. "

There has been a lot of arguing about the pension liability. Do you have estimates of the following:

>the overall liability shortfall
>the portion that applies to 203
>would the exisring shortfall be dumped on local districts, or just the new yearly shortfall going forward?

Thanks.

(Pensions -- not Higgins Bashing)

I am a bit flabbergasted at the "penalty" D203 had to pay. I am not surprised at why they had to pay it given the present contract and how the state figures these things. I am not blaming D203 for it happening.

If I read it correctly, for every dollar of salary over the 6% cap, the state wanted $6.5.

So if an end-of-career teacher takes up extra lunch duty at, say $20 per hour, it costs D203

7.5*20 = $150/hr for lunch room supervision for that one employee. Ay carumba!

And just think what the cost to the State Taxpayers (oh..that would be us) incurred with the 20%x2 end-of-career bonuses before.

Yes, I understand age-discrimination is "illegal", but it is practiced by every school district with tenure policies.

Maybe say that teachers making more than (90K) cannot take on certain additional duties. That's not age-discrimination any more than tenure is in reverse.
.
.
.
To Higgins: somewhere you wrote that stipends only increase with base -- not so. There are steps also. Your new salary document is better but still far from good. Some of the obvious Higginsisms/editorializing is gone. But it is apparent that you still do not get line 1 or 2 or what was originally being asked.

-1


I have long given up trying to respond to Thom. But to illustrate one more time.

Take the Chicago Bulls roster the year after Jordan retired. You would say, what a bargain, salaries are down 50%. However, Jerry Reinsdorf looked instead at the 10 guys remaining and says, "Is it worth paying these guys 20% more?"

So be clear, Higgins compares the salaries the former way for 203. This argument goes on for years to deflect the real issues.

One more comment. District 203 has improved salary administration. If they were to eliminate the retirement bumps and set steps at 1.5% and adjust the contracts for general salary increases for all people, we might for once have a fair system. And implement a two tier salary system for new teachers to represent market.

And if the state dumps the pension liabilities on local school district, there should be a freeze on salary increases until tax revenues from tax cap fully fund the increased cost and no use of reserves. Local taxpayers should not be burdened with costs they did not create. And most of the problem is that the State granted increases they cannot afford. TEACHERS KNEW THAT. The pension alternative would be to simply freeze benefits earned to date to comply with the constitution and start over for pensions.

Don't hear that from either the Republicans (if there is such a thing in Illinois) or Democrats.

Let me throw some Higgins logic at ya'll:

A clothier in town recently had a deal where they gave you a $50 credit toward a new suit if you brought in a used suit (which I guess they donated tp charity)

I bought a nice wool suit for about $500, and net my $50 for the old suit I traded in I paid $450.

When a friend of mine expressed interest in the suit, asking where I bought it and the price, I answered "$500 at XXXXX". I also mentioned the $50 trade in deal.

Higgins' answer, using his own logic, would have been "$450".

His answer is wrong.

-1 dislilkes the misleading and numerous salary calcs by Higgins because they mislead to the point of being an absolute lie.

Simple fact: calculating the change in overall salary, in aggregate, is NOT a calc of either the average raises OR the individual raises in 203!

It is a misdirection, at best, that masks from the taxpayers a large portion of actual raises with the overall benefits of employee turnover.

Higgins keeps miscalculating and miscalculaing, year after year after year, in the exact same wrong way, and each tme he expects us to accept his folly.

That, my friends, is the definition Al was looking for!

making it REAL easy:

Salary Quiz

http://blogs.suburbanchicagonews.com/newsblog/2011/01/school_report_cards.html#comment-273351

Salary Quiz Answers:

http://blogs.suburbanchicagonews.com/newsblog/2011/01/school_report_cards.html#comment-312632

Ask him if I messed up anywhere.

-1

Higgins wrote:

There’s a famous quote, attributed to Albert Einstein, that’s wonderfully appropriate here: The definition of insanity is doing something over and over and expecting a different result.

And yes. It is I who is insane for expecting you to understand.

-1

Mr. Higgins,

At this point, I feel sorry for your ability to think rationally.

I am also fairly confident you should be barred from quoting Einstein.

I promise to send $100 to NEF if you can come here and say that LINE 2 as written on your page is correct. Ask Dave Zager. He will see where it is mis-written. Innocent mistake. Correct it. Please.

In fact I will give $100 to NEF if Mr. Zager can rebut anything I wrote in my formula analysis (except for the typo which I pointed out and slight variations for correcting for FTE).

He will not be able to because I understand what he meant to say and you are still blinded by what he did say.

If LINE 2 is as written, then it is severely flawed to add lines 2 and 3 to get line 1. They would have different denominators and represent different numbers of people.

Regardless of whether you see that or not, it is clear that LINE 1 as calculated by Dave Zager is a purely theoretical number for which we have not been given full information to the assumptions.

In particular, what assumed raise was given to retirees off the payscale? Was it only base?

Yes, this is getting silly because I am asking about what pay someone would have received as that is needed for his LINE 1.

The fact that you cannot see it after three years, is pathetic at best.

Line 1 is the theoretic percent increase in total salary if everyone who retired stayed and there were not new hires.

That's it. Nothing more,. Nothing less. I do not object to Dave Zager calculating this number. It can also be seen as the % increase in average incumbent salary if everyone stayed, which is NOT average % raise for incumbents as was being discussed.

I dare you to make the same NEF donation promise that LINE 2 is correct as written, so that you'd pay up if it is wrong.

Giddy-up!

Then pay up.

-1


.
.
.
.

For Line 2, the total salary of all retired/terminated teachers previous year final salaries plus any base or step increase which the retiring teachers would have been eligible for in the current year represents the cost prior to hiring replacements. The total salary of the new teachers hired as replacements is subtracted from this and then divided by the sum of the previous year total salaries for the retired/terminated teachers, to calculate the “savings” due to turnover.

The idea is that the % savings must be of the total payroll so the statement should stop at the end of the bolded text. This allows lines 2 and 3 to have a denominator of (prior year payroll), which allows then to be added to get line 1.

There’s a famous quote, attributed to Albert Einstein, that’s wonderfully appropriate here:

The definition of insanity is doing something over and over and expecting a different result.

Long time readers know that I have written countless posts, containing thousands of words, responding to comments made by -1 who does not like the salary analysis posted on the QE203.org website.

His antipathy apparently holds true for the revised version just posted. As I can see the future holds the same promise if I once again go line for line rebutting his charges ad infinitum, I’ll instead make the following comments:

The intellectual construct for lines 1-2-3, the data creating the salary percentages and the logic behind them, and the answers in the Q&A, are all the work of D203’s Ast. Supt. for Finance, who kindly provided this data to us. He, of course, knows this topic intimately and has at his disposal all relevant data. I think it’s eminently reasonable to believe he know what he is doing.

I personally take responsibility for the writing of salary breakdown section, although I received help from the District in constructing it.

For whatever reason, be it an honest misunderstanding of the data, or a willful misstating of what the data represents, -1 continues to be intent on claiming (incorrectly) that the data is something other than what it is. That’s his right, but let the record show that his characterizations of what the data means are simply wrong, and as I well know the outcome of once again responding to every charge, will simply be different charges, I’ll pass. If -1, or you the reader, don’t want to accept the data, C’est la vie!

Thom Higgins

QE203.org

a slight mistype

In my line 2 discussion at one point I had (A2009+N2009) in the denominator for total wages in 2009. Since R retires in 2009 and N starts in 2010, N2009 does not exist.

(A2009+R2009) in the denominator. Just a typo which is not carried through anywhere else. All other calculations after that show (A2009+R2009)
.
.
.
And to be perfectly clear.

The Line 1 that Mr. Higgins has been discussing is purely theoretical without all assumptions being told to us.

It is (expected sum salary if everyone stayed**)/(prior year sum salary).

The problem is that, as stated by Mr. Higgins himself, steps and base were allowed, but no lane change assumption was made for the replaced workers. This brings an immediate lowering of the value of Line 1. What has not been made clear is what assumed raises were given to those off the scale, which makes up the majority of the highly paid turnover.

For those interested, here is a link to the file I made.

My spreadsheet:

www(dot)mediafire(dot)com/?r4ix17y1itayb0f

There is a LOT of information there. I may update the presumed Dave Zager method, but just suffice it to say that I use actual numbers for my year-over-year total incumbent salary ratio. (Zager-like Line 1)

I calculated the year-over-year % increase in pay for every certified employee (excepting administrators) working 1.0FTE and 9+ months and present in the district in consecutive years. I then took a geometric mean of those ratios (so ratio 1.07 ==>7% raise). All of this data was supplied by a database at the taxpayers network site and, at least since Dave Zager has been here, those numbers appear to match up with what he submitted. They also match the data published by the sun times.

So actual real dollars being used to calculate an actual average percent raise instead of Mr. Higgins' % increased in a theoretical average salary if everyone stayed (and we did not allow theoretical lane changes) and we gave an undefined raise to those who were already off the scale who happened to retire instead. Huh?

That is a LONG way from average % raise for full-time incumbents

Sorry Higgins, once again, the entire table which was created because you thought that from 2000-2007 the average % teacher raise was 3.5% fails to provide the information asked for. You were wrong in 2007 when you were fighting the taxpayers ticket with an incorrect understanding of the issues and you maintain that status to this date.

I hope you will be man enough to correct your site on the description of line 2, and better yet agree with my assessment of how your Line 1 does not answer the question we had originally.

-1

I read this narrow-viewed, yet expected, comment in today's Sun:

"...... I just feel that they want to solve the state’s problems on the back of one group of people.."

It was spoken by a teacher protesting the discussed changes o their retirement system in Illinois. I say "expected" because the comment does not ackonwledge the children of Illinois, the mediocre qualityof education in Illinois, OR the economic realites ofmIllinois and the TRS Pension fund in particular!

The statement, if thought through clearly and not from a personal perspective of "where's mine", would address not the entirety of the state's problems but only those of the TRS pension system.

To be loud and clear, the TRS Pension system is somewhere between $43-$50 billion underfunded!

The rest of the state has an even larger problem that is also being addressed. As for the TRS, the proposed changes are required JUST TO FIX THAT SYSTEM.

The reality of today's world, once econmics, mortality tables, etc., are taken into account, just plain do not warrant fully funded retirement at ages below 65-68 and require highr personal participation by members, especially when one considers the high level in today's society of retiring teacher pay (even more acute when one includes the muliple games played in districts, including 203, to artificially inflate end of career wage levels).

All in all, it is time to fix it going forward, and it will be painful. Of course, the alternative is much, much worse.

Let's look at the "two" teachers in the whole district. Understand that there are 25-50 As for every R and N.

A = incumbent
R = retiring
N = new hiree

I have intentionally left of the part timers because I did not want to make the formulas too complicated for line 2. They actually make the chart uglier and less relevant for figuring out Line 1.

Number after letter indicates year

So...let me start with what seems to be absolutely zero disagreement.

Line 3 equals

(A2010+N2010)/2 = 2010 average salary

divided by

(A2009+R2009)/2 = 2009 average salary

or more simply:

(A2010+N2010)/(A2009+R2009)

Or the ratio of the total salaries between the two years. And when you are done subtract 1 of course.
.
.
.
Your site says that line 2 =
(R2010* - N2010)/R2009

R2010* = presumed salary if R did not retire. I have yet to get a good answer of what that number is for people who are off the chart.

YUCK! This is wrong. You have the wrong denominator.

It should be something like "What the %increase in payroll would have been without retirees minus what it was"

Presumed 2010 total Salary minus actual 2010 total salary/Total 2009
[ (A2010+R2010*)-(A2010+N2010) ] / (A2009+N2009)

=

(R2010*-N2010)/(A2009+R2009)

This does allow us to "ADD" lines 2 and 3. *This is a positive number as calculated. No subtracting 1 needed.

So we get line1

(A2010+N2010)/(A2009+R2009) -1 + (R2010*-N2010)/(A2009+R2009)

= (A2010+R2010*)/(A2009+R2009) - 1

=[(A2010-A2009)+(R2010*-R2009)]/(A2009+R2009)

= sum of presumed raises / total prior year salary.

This also does not account for potential lane changes and this may be another part of the source of error in your line 1.

The whole crux here is that Line 1 is purely based on presumptions and does not, in any way shape or form represent an average percent raise for incumbents like was being discussed.

It does represent exactly what i said it did:

PRESUMED % increase in average incumbent salary if nobody left. (Again again again..This is NOT average % increase in salary for incumbents)

I really waited for this?

Thank you for cleaning up the BS in your chart. Maybe you could dump the now 5+ year-old claim about the Champion data.

-1...not edited

lacking a better thread:

Higgins,

You may want to check your math here. The formula for line 2 seems very wrong. You are limiting the comparison to only those teachers who retired/left and got phantom raises versus those who replaced them. It should be total new salary/total presumed salary, including ALL teachers.

The fact that line 1 is found from two calculated numbers which have a different number of teachers involved makes these numbers even more highly suspect.

-1

from the qe203.org website

Please explain how Lines 1-2-3 are calculated:

A. The Position Control System is used to calculate Line 3, “net average increase,” and Line 2 “savings due to turnover.”The difference is Line 1, average increase without turnover – i.e. incumbent average increase. The value for Line 1 is verified by looking at the base and step increases and the 6% costs built into the contract. The lane increase is a variable because it is not “cast in stone” – teachers receive progression on the salary schedule based on successful completion of graduate coursework that is turned in during the year (the credit is given at two times, November 1 and March 1, during each year).

For Line 2, the total salary of all retired/terminated teachers previous year final salaries plus any base or step increase which the retiring teachers would have been eligible for in the current year represents the cost prior to hiring replacements. The total salary of the new teachers hired as replacements is subtracted from this and then divided by the sum of the previous year total salaries for the retired/terminated teachers, to calculate the “savings” due to turnover.

Line 3. is calculated using the position control system to find the average salary for both the current year and previous year and calculating the percentage change between them. This is based on average salary instead of total salaries as this corrects for fluctuations in FTE’s

Sorry for hijacking the "Suggest a thread" thread with a response to a post in the "Suggest a thread" thread whereby Higgins reopens an old thread.

And I apologize for responding to your non-thread suggesting post in the "Suggest a tread" thread. Dolt? Takes one to know one, I guess.

Perhaps we can have a thread entitled Higgins vs -1 or Higgins vs Denys or Anonymous vs etiquette-less posters.

Ah..there's the suggestion for a thread. First one as far as I can tell in the five, now six, posts.

See I did it.

Your turn.

Clearly neither of these two dolts (-1 and Higgins) comprehends nor understands the concept of SUGGEST A THREAD.

-1,

When you review his work, can you check to see if he again pulled his little misleading move of calculating 203's "average raise" based on total numbers (which is distorted downward by overall turnover) versus INDIVIDUAL avg raises.

I personally consider the former method a lie.

Thanks.

Mr. Higgins,

At some point I will check out your new data and explanations. I hope you have kept the truthiness to a minimum.

However, you make the comment that you include 1300 people. How does it work out that you have 1300 and the state only has about 1100?

-1

The event you all have been waiting for, well, maybe a couple of you, is at hand. I have posted the updated QE203.org salary analysis on our website. My apologies for my lateness, but both my schedule and D203 staff’s have been a bit hectic, and frankly, there is so little activity going on here in the blog that I didn’t see the need to put this project ahead of more important articles. I’ll mention that I have three articles on the Common Core State Standards on the website along with detailed article on the PERA act, that I invite readers to take a look at. The Common Core is the biggest change to education from an instructional standpoint in generations and, especially if you have kids, you are going to want to know more about it.

A few notes: Close readers will notice that the 09-10 percentages are slightly different from the previous version which used results from calculations prior to the year-end. The new version has year-end figures. The 08-09 figures displayed in both versions are also prior to year-end and could be off a few tenths as well. I’ll note that if you check the articles five year average to the ISBE avg. salary stat’s, my spreadsheet is lower by .12% (2.51 vs. 2.39). Remember, mine counts more people; 1300 vs. 1100. All of this leads to some variations. Regardless, if we average them out over time we are quite close.

-1 and Dan Denys may well have something to say about the analysis. -1 has gone to the trouble of creating detailed spreadsheets that seeks to do the same thing I’ve done using slightly different data. His data isn’t perfect, and neither is mine. I take solace in that I have solid numbers about what the actual costs are (line 3), although I can’t perfectly allocate the exact percentages to the various components of my line 1. With my line 1 as a reference, -1’s preferred calculation offers an additional bit of information that tells us that teachers below the median salary are receiving greater percentage raises than those above. The fact that his percentage is higher is a good thing. If it was lower that would mean that the higher paid teachers were getting the bulk of the raises. It’s a bit counter intuitive.

Almost a year ago -1 posted a number of questions to me. The ones that were legitimate questions are answered in the extended responses and Q&A. To the extent that there are meaningful questions and comments, I will be glad to respond. What I’m not going to do is re-argue the topic once again, ad-infinitum. Interested readers can go back into the archives if they want some cheap thrills.

Happy reading…

Leave a comment

Naperville Potluck

The Sun invites you to share opinions about news and issues. Have a question? E-mail us.  

Pages

About this Entry

This page contains a single entry by Naperville Sun editors published on August 15, 2012 6:42 PM.

Smart meter issue never dies was the previous entry in this blog.

Walmart expansion is the next entry in this blog.

Find recent content on the main index or look in the archives to find all content.