# Why Step Increases Do Not Cost the City of Westfield More Money, Take 2

Save Westfield Schools is disheartened to see Councilor Flaherty still claiming on an online forum that step increases, even though they were frozen this year, will lead to spiraling teacher salaries.

We admit that it does sound counterintuitive. How can you possibly give many teachers raises year after year without teacher salaries eventually eating up the entire budget? We did our best to explain how in this post. Mr. Flaherty's response was to email us and accuse us of being "manipulative." Interestingly, he did not attempt to dispute our facts.

But in case there is still doubt in anyone's mind about this strange fact, we put together a simple spreadsheet and created a hypothetical town called "Little Westfield" with a hypothetical payroll of ten teachers. We made the following assumptions:

Step increases are frozen, year after year, with no cost of living adjustments. This is the same assumption that Flaherty has made in his arguments.

Each teacher works 40 years and then retires. There are no layoffs and teachers never quit.

One teacher is hired every 4 years.

All teachers have a Master's degree and have the same contract as Westfield's teachers.

Though this is a far simpler scenario than what we have in Westfield with 570 teachers who were hired in clumps and have different degrees, the end result is precisely the same. Here's what the figures look like with these assumptions. Our comments are on the right:

FY2009 | ||||

Teacher | Years | Salary 2009 | Here are all the teachers on the payroll for the city of “Little Westfield.” | |

Teacher #1 | 4 | 44348 | ||

Teacher #2 | 8 | 50493 | ||

Teacher #3 | 12 | 61806 | There are 10 teachers. Each of them have a Master's degree. | |

Teacher #4 | 16 | 63206 | Next to each teacher is the number of years they have worked in Little Westfield. | |

Teacher #5 | 20 | 63556 | ||

Teacher #6 | 24 | 63556 | In the last column is the calculated salary based on the step increases plus the longevity benefits they might be entitled to. | |

Teacher #7 | 28 | 64306 | The teachers have the same contract as the teachers of Westfield, MA so the salaries here are the same as our teachers would receive. | |

Teacher #8 | 32 | 65006 | ||

Teacher #9 | 36 | 65006 | ||

Teacher #10 | 40 | 65006 | ||

Total | 606289 | In 2009, the total compensation package was $606,289. | ||

FY2010 | ||||

Teacher | Years | Salary 2010 | Now, it's 2010. Every single teacher got an average raise of 4% except for Teacher #8 and Teacher #9 because they are maxed out on their step increases and longevity benefits. | |

Teacher #11 | 1 | 38835 | ||

Teacher #1 | 5 | 45892 | Since all the teachers got a raise or stayed the same, the City of Little Westfield must have paid more in teacher's salaries, right? | |

Teacher #2 | 9 | 52340 | ||

Teacher #3 | 13 | 61806 | WRONG! What happened? | |

Teacher #4 | 17 | 63206 | ||

Teacher #5 | 21 | 63556 | What happened was that Teacher #10, making $65,006 retired and was replaced by a new teacher, Teacher #11, starting at $38,835. | |

Teacher #6 | 25 | 64306 | ||

Teacher #7 | 29 | 64306 | ||

Teacher #8 | 33 | 65006 | ||

Teacher #9 | 37 | 65006 | ||

Total | 584259 | As a result, we see that the total salary paid out actually went down, despite every teacher getting an average 4% raise. | ||

FY2011 | ||||

Teacher | Years | Salary 2011 | Now it's 2011, salaries are creeping back up. | |

Teacher #11 | 2 | 40371 | ||

Teacher #1 | 6 | 47431 | ||

Teacher #2 | 10 | 54181 | ||

Teacher #3 | 14 | 62706 | ||

Teacher #4 | 18 | 63206 | ||

Teacher #5 | 22 | 63556 | ||

Teacher #6 | 26 | 64306 | ||

Teacher #7 | 30 | 65006 | ||

Teacher #8 | 34 | 65006 | ||

Teacher #9 | 38 | 65006 | ||

Total | 590775 | |||

FY2012 | ||||

Teacher | Years | Salary 2012 | And they are going up more because no teachers have retired. | |

Teacher #11 | 3 | 43253 | ||

Teacher #1 | 7 | 48964 | ||

Teacher #2 | 11 | 57088 | ||

Teacher #3 | 15 | 63206 | ||

Teacher #4 | 19 | 63206 | ||

Teacher #5 | 23 | 63556 | ||

Teacher #6 | 27 | 64306 | ||

Teacher #7 | 31 | 65006 | ||

Teacher #8 | 35 | 65006 | ||

Teacher #9 | 39 | 65006 | ||

Total | 598597 | |||

FY2013 | ||||

Teacher | Years | Salary 2013 | Now we are back to the 2009 teacher salary levels. But next year, just like in FY2010, salaries will fall again because Teacher #9 will retire and get replaced with Teacher #12. | |

Teacher #11 | 4 | 44348 | ||

Teacher #1 | 8 | 50493 | ||

Teacher #2 | 12 | 61806 | So you can see here that giving all teachers raises will not cause costs to spiral because teacher are always leaving and getting replaced with lower cost teachers. | |

Teacher #3 | 16 | 63206 | ||

Teacher #4 | 20 | 63556 | ||

Teacher #5 | 24 | 63556 | ||

Teacher #6 | 28 | 64306 | ||

Teacher #7 | 32 | 65006 | ||

Teacher #8 | 36 | 65006 | ||

Teacher #9 | 40 | 65006 | ||

Total | 606289 |

We want to be careful here to point out that these figures should not be taken to mean that Westfield does not face increasing labor costs over the next few years. As you can see by this hypothetical example, the total salaries went up from 2010 to 2013. So total salary pay outs will fluctuate from year to year and increase for a stretch of time. But eventually they will go down, too. Just how sharply they rise and fall is determined by how many teachers are receiving step increases as compared to those who are not and the rate at which teachers retire. But eventually, given enough time, the total compensation package will hover around the same dollar figure.

It's also important to note that the total pay out will permanently decrease if teachers are laid off or take early retirements as the student population decreases. From what we understand, that day is coming soon.

Finally, we want to be clear that we're not suggesting the economic downturn will have no impact on the school budget and that teacher salaries should enjoy the same increases as when tax revenues were pouring in.

The big takeaway is that if step increases are frozen indefinitely as they were this year, then the largest single factor that determines the size of the total compensation is not the size of the step increases, but the total number of teachers on the pay roll. It doesn't matter what the size of the step increases are at all, in fact. Step increases could be fixed at 20%, 50% or 80% per year but that would not change the fact that the total compensation paid to teachers, over time, will not go up.

At the next City Council meeting, City Councilor Flaherty will be making a proposal to tie teacher raises to 2.5% based on his very flawed analysis of how step increases work. Since the size of step increases aren't a factor, his proposed solution makes no sense. It's like proposing a solution to a complex problem like sending a rocket to the moon without understanding the law of gravity.

The real solution will take much more analysis, time, and forethought. It will also take the whole community, not just a few wild ideas that leap from a single City Councilor's head over a weekend. We recommend that the City Council vote no against any of Flaherty's proposals regarding the school budget that come up at Thursday's council meeting.

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