The bulk of every school district’s expenditures are tied up in personnel. As a result collective bargaining agreements can have a dramatic impact on a district’s budget, both in current and future years. Contract provisions have both obvious and subtle effects on a district’s ability to align its expenditures with its priorities. An increase in salary and benefits is just one facet of that.

Another significant factor is a district’s salary schedule. Most districts determine the salary level for their teachers and the majority of other employees based on a schedule that includes “steps” for years of service in the district and “columns” for the amount of education or training employees receive. Staff seniority usually has the greatest influence on average salaries and thus on the percentage of the budget spent for personnel. In general, the base salary of most senior teachers is about twice as much as new teachers.

The structure of the salary schedule and the amount of any salary increase both have predictable multi-year cost implications. Another significant cost is employee benefits including paid vacations and holidays, sick leave, health care, life insurance, and retirement plans. The state requires some of these, such as retirement and workers’ compensation. And virtually every district in the state provides some of the other employee benefits voluntarily. Districts vary substantially, however, in the amount they spend, the manner in which they structure those benefits, and the extent to which they expect employees to share the cost. All of these things must be negotiated. Controlling the cost of benefits can be crucial for a district’s financial health. Many districts use a benefits cap for this purpose, agreeing in the employee contract to pay a set maximum per employee.

The contract provision with the next greatest financial impact is arguably class size because it relates so directly to how many teachers the district must employ. Other things such as retiree benefits, hours of employment, preparation periods, leave policies, safety measures, and the timing of pay adjustments can also have a substantial impact on a district’s bottom line.

While union negotiations are almost always done in private, the public must be given the opportunity at a public meeting to comment on proposals before negotiations start and on the final agreement before the school board adopts it. Union proposals and district responses, the salary schedule, and the collective bargaining agreement are public documents. Further, with the passage of a new state law in 2004, the district superintendent and chief business official are now required to certify in writing that the costs incurred by the district under a proposed collective bargaining agreement can be met during the term of the agreement. It is critical to a district’s long-term fiscal health that the multi-year impact of any collective bargaining agreement be analyzed before it is officially adopted.

Under state law, employee contracts must be renegotiated at least every three years. Some districts negotiate salary and benefits annually while others commit to multi-year compensation agreements.

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