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Painful K-5 state budget cuts proposed

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The State Department of Public Instruction is painting a grim picture of potential budget cuts affecting schools both across North Carolina and in Wake County.

As noted in today's article by Lynn Bonner, the potential budget cuts laid out by DPI would result in the loss statewide of 5,300 teachers, elimination of thousands of teacher assistant positions and increases in class sizes. With Wake getting between 9-10 percent of the state's education funding, it wouldn't be pretty locally.

To help close a projected $3.5 billion revenue shortfall next year, Gov. Bev Perdue asked most state agencies to draw up plans for 5, 10 and 15 percent cuts. She only asked DPI to draw up 5 and 10 percent cuts for education funding but it's still pretty bleak.

Five percent of the K-12 budget is $396 million. But because a cut of $304 million is already built into the public education budget, schools would have to come up with $701 million. A 10 percent cut is worth $701 million, or $1.1 billion when the recurring cut is added.

In the 5 percent scenario, the state would change K-3 funding formulas to provide one teacher for every 19 students. That's up from one teacher now for every 18 students.

Funding for class sizes would also go up in the upper grades, potentially by as much as three students in some grade levels.

Teacher assistants would be hit hard in both scenarios. A 10 percent cut would eliminate more than 13,000 positions statewide, with the state paying only for enough assistants to work in kindergarten classrooms.

The state used to fund teacher assistants for grades K-3. Wake lost more than a quarter of the funding for TAs this school year.

The larger class sizes and elimination of teacher assistants would be a double blow.

The proposal cuts all staff development and school technology money because the state is getting millions from the federal Race to the Top grant to pay for those initiatives.

It's still early in the budget process for next year so it's not certain what the final cut would be.

A 5 percent cut would mean Wake would lose $34 million. A 10 percent cut would cost Wake $68 million.

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Interesting side note

Interesting side note here.  This is an email to teachers at "a school" in NC:

 

Growth test will now be given based upon the test setup by the County.  Please use the scan sheets provided, this will allow me to scan and monitor student progress.  It will also allow me to print student results, and keep a running record of individual student progress.  Please make sure that all scan sheets are filled in correctly, including first and last name, ncwise number, and place teacher's name and period at the top of the form.  All answers must be bubbled in correctly with no stray marks. Before turning in answer sheets be sure to put them in alphabetical order and have them turned in the same direction.  This will make scanning faster and more efficient.

Just for perspective, a

Just for perspective, a teacher with 3 years experience and NBPTS earns 4000 more a year than a teacher with only a bachelors degree (according to the wcpss salary schedule).  Take the number of NBPTS teachers in NC and multiply this sum by 10 years.  Of course, this is using the lowest numbers possible (degree and years of teaching) to get a cost to taxpayers of ........$627,240,000....on top of the application fees of $120 million this will be (in the real numbers) well over 1 BILLION dollars of taxpayer money for something that MAY work?  Hmmmm

Short sighted

This is a short sighted view of compensation.  There are different ways to be competitive. One way is to offer a low starting salary but provide a path of increased earning through people investing in their own professional development - this is the wake county model. The other model - like Fairfax and other districts is to attract with high starting salaries and lower graduated increments with professional development and experience.  At the ned of the day we will have to complete for new teachers like every other school district.  Why would a teacher come to wake county with a low starting pay and no opportunity to improve your earning power ?   Adjusted for regional cost of living differences, teacher compensation in wcpss is around average.  What you are proposing is to drop it to the bottom quartile.  In addition you need to consider the amount of $, we as taxpayers pump into the State college / university system. So we basically provide these students with an affordable higher education and then drive them to other districts because we would not even be paying an average ! Doesn't make sense. 

The Wake County model? 

The Wake County model?  Teachers are state employees.  The only thing Wake County does differently is the supplement.  If memory serves, the WCPSS provides a 12-14% supplement.  There is absolutely no insentives here unless you count being able to get into the SECU....a bit of money knocked off the power hook up to your apartment, free month of cable, etc.  There is NO compensation for professional development other than National Boards and again, this is state, not county.  The only thing you had to do to get raises (other than National Boards) was to stay in teaching for a year.  Now, for three years that has been frozen.  Can you imagine a young teacher fresh out of college trying to make ends meet on the same salary they had three years ago as a first year teacher?

Again, I agree, there needs to be a merit system.....but if that means cutting pay by up to 30% to make things even we may be cutting of our nose etc etc......teachers are leaving already.  Next year it will get worse.  Where did that lottery money go again?

County Contribution

The County contibutes 26%, likely more tis year and next, Unlike the state's contribution, it is a block grant with no strings attached. A lot of it is used for special courses not mandated by the state. Ditto for ~6% which comes from other local sources, e.g. fines and forfeitures,

Development

My error - I should have said teachers are state employees. With regards to professional development = advanced degrees.  Has your graduate degree helped you ?  Did the school system provide tuition assistance ?  

Actually, the Department of

Actually, the Department of Veterans Affairs paid for my education (MSed) after I was medically retired from the navy in 1993.  Yes, a Masters Degree garners a 6% pay increase after 2 years of direct time with professors.  However, in education, professional development actually refers to the 15 CEUs that must be completed every 5 years to renew ones license.  LOL I guess if one lost their license that might be considered a pay cut, but there is never a pay increase for prof development.......but I do like your idea there.  Hopefully that would mean that I would be attending prof developments that would be better than someone (a PhD) telling me how to teach reading to middle schoolers with a pop-up book.

Why would a teacher come to

Why would a teacher come to wake county with a low starting pay and no opportunity to improve your earning power ?
 
You must have missed the posts here about how 'diversity' makes WCPSS attractive for teachers to seek employment here.

Is there a choice that we

Is there a choice that we can keep all of the teachers if they agree to a 10% pay cut or we can cut 10% of the teachers and increase the work load / class size of those that are left?

I believe elimination of

I believe elimination of wasteful/ inflated expenditure and non-core services should be more than adequate to survive a budget cut. Ditto for the state level.

Typical

Typical ranting with no specifics.  Put on the table what you consider wasteful and non-core so we can have an intelligent discussion on priorities.  I am still waiting for JT to reveal the millions of waste in the wcpss school system, after all he has had almost a year now.   

a tad incredulous

For someone willing to add $400 to the thousands already being spent per student, while devoid of any understanding of the nature and effectiveness of the additional expenditure, extending an invitation to have "an intelligent discussion on priorities" is incongruous.

Again Deflection

Yet again you deflect.  I do not need 99.9% of the information to make an assessment. Using common metrics - our school system is one of the lowest funded in the country. What makes you believe that there is $100m of wasteful spending on inefficiency and non core activities ?  If you believe the competitive model reflects the optimum efficiency then start with Thales at $6k per years. - Add to that: Transportation, Meals, Special needs and all of the extra services that a public school is required to offer - ESL, speech therapy........ If you happen to believe sports, band, music, dance, theater and the arts in general are important - then add that as well. This easily gets you to the $8k per student that is spent in the public system.  So my conclusion is that the tax $ spent on education is in line with the level of services provided when compared to the private sector and other school districts.  While I agree there is always room for improvement and efficiencies, the bucket is not $100m.  When it comes to funding of the schools your musing have been the typical response from the right side for at least the 16 years I have lived here.  Time after time - citing excessive waste and inefficiencies and yet offering no substance to the claim. 

With regards to the additional $400 per student - yes I am willing to sign up for it as long as there is accountability to the spending. 

 

Once everybody is done

Once everybody is done posturing and lamenting the catastophic nature of the budget cuts, you will likely find that about the same number of students will continue to clear NC's dumbed down EOGs.

If this new board has been

If this new board has been sitting on $100M of wasteful spending for the last year and has not cough it up already, I think we should fire them.

Frankly That's Just 100% Delusional

There is nowhere near $120 million in the system meeting those definitions.  And the idea that there is is a denial of reality that will have devasting, crippling effects on our kids.

...

Did you actually imply a 10% budget cut in a school system leads to "devastating, crippling effects"? If yes, allow me to say dramatic prophecies of doom aren't going to fill the coffers. A 20% cut in the number of teachers translates to a 25% increase in the number of students per classroom. We either live with the idea or figure out a way to grow like a BRIC.

A 25% + increase in class sizes coming to a school near you!

The next issue is WHEN this happens in a few months how many of the teachers who are left are going to put up with it and want to stay on? I've heard a few already quietly say they can have their job, they're done. 

So then how big do those classes get, 35% +?

Federal investigations, accreditation threats, lawsuit threats, crippling cuts, teachers fed up, communities fed up, a school board that is dysfunctional on their best day and not accomplishing a thing with Ms. Goldman on board, no assignment plan, no stability, no certainty ...

Devastating is too weak of a description!

Where would they go? Are

Where would they go? Are other districts saddled with surplus cash?

Home

Some are just that fed up.

If you've never reached a point when you've had enough, count your blessings.

Not JUST a 10% Budget Cut

...but a 10% budget cut on top of three years running of previous cuts & stagnation even while the number of kept growing, and THAT on top of what was already a miserly budget even in the good times.

Yes, these cuts WILL be devastating.

these cuts are totally managable

Ok, let's take a big picture assessment.   This is somewhat fuzzy but let's say we lose 10% from the state funding $ per students and 10% from the wake county funding per student as the shortfall.  So in aggregate we are talking about 10% of total $.  I believe I read on this blog that central administrative expenses were 20% of total budget - most private companies have overhead rates between 12 and 15% - so if WCPSS were made as efficient -1/2 50% of the shortfall could come from central adminstration.  The rest would come from schools 5% reduction in all schools expenses -class sizes stay the same for those who think the current class size is important to academic success.  I do not -20-40 years ago class sizess and test scores were both higher.  Only statistically valid exception are the special needs children.  So if we lay off 5% of the teachers and icnrease class sizes by 2 or 3 kids per class and keep salares constant, I am fine with that as well.  If the teachers want to stay home vs. work with 2 or 3 more kids per class - in this economy should be able to replace them.

From a results perspective, nothing here is devestatinf or catastrophic from an efficiency perspective or academic success perspective. The moral, as always, is do hte best with what you have.

Where Did You Get The 20% Figure?

It's been posted frequently here without challenge that teachers represent close to 80% of the budget.  So if central admin is 20% we're getting a LOT of transportaton and -at-school overhead for the remaining 0%.

Your privae-sector average looks unrealistically low to me too.

?

I don't know where you got 20% from, but if you look at p. 4 of the current year budget, http://www.wcpss.net/budget/2010-11-official-budget/2010-11-adopted-budget.pdf, you'll note that 88% of the district's budget goes to schools.

I also don't know where you got your 12-15% target.  Glaxo's SG&A expenses, for example, were about 9.6B, compared with sales of about 28B.  That's around 35%.

 

take out R& D from glaxo

take out R&D and non-like items from Glaxo.  Have not looked at iGSK specifically.  Lots of other areas Also, I believe wcpss construction costs are not in the operating budget you reference or interest payments on the bonds, etc.  thought the 20% was somewhere previously mentioned on this blog. Lots of in and outs to get a true apples to apples comparison but point is lots of non-teacher savings avalable.

So...

You're right that interest on the bonds are not in the district budget.  But, that would reduce the portion going to administration, not increase it.  Also, why would we take out R&D?   Even if we did, that would still further increase the portion going to SG&A.   It's possible that somebody else also thought the cost was 20%, but, if so, they were wrong also.

Now, Glaxo isn't a great comparison company -- the right comparison should be with non-franchise service-oriented industries.  Accenture might be a better fit, but if you look there, you'll see overhead of around 25%.

Your previous post claimed that non-teacher savings were available, offering as evidence a clearly incorrect disparity between the district's administrative cost and that of private industry.  It appears that you've now abandoned that position and are now just making a bare assertion that there are "lots of non-teacher savings available."   Ok.  The budget is on-line -- I pointed it it in my last post.  If you believe it's possible to cut 10% without significantly affecting classrooms, I invite you to show where those savings would come from.

take out R& D from glaxo

take out R&D and non-like items from Glaxo.  Have not looked at iGSK specifically.  Lots of other areas Also, I believe wcpss construction costs are not in the operating budget you reference or interest payments on the bonds, etc.  thought the 20% was somewhere previously mentioned on this blog. Lots of in and outs to get a true apples to apples comparison but point is lots of non-teacher savings avalable.

these cuts are totally managable

Ok, let's take a big picture assessment.   This is somewhat fuzzy but let's say we lose 10% from the state funding $ per students and 10% from the wake county funding per student as the shortfall.  So in aggregate we are talking about 10% of total $.  I believe I read on this blog that central administrative expenses were 20% of total budget - most private companies have overhead rates between 12 and 15% - so if WCPSS were made as efficient -1/2 50% of the shortfall could come from central adminstration.  The rest would come from schools 5% reduction in all schools expenses -class sizes stay the same for those who think the current class size is important to academic success.  I do not -20-40 years ago class sizess and test scores were both higher.  Only statistically valid exception are the special needs children.  So if we lay off 5% of the teachers and icnrease class sizes by 2 or 3 kids per class and keep salares constant, I am fine with that as well.  If the teachers want to stay home vs. work with 2 or 3 more kids per class - in this economy should be able to replace them.

From a results perspective, nothing here is devestatinf or catastrophic from an efficiency perspective or academic success perspective. The moral, as always, is do hte best with what you have.

"Yes, these cuts WILL be

"Yes, these cuts WILL be devastating."

This is one time I'm in agreement with fiveblindmice.

Not all cuts counted here.

Devastating is the right word if all these cuts are enacted. Remember, the articled by Lynn Bonner above just accounts for cuts that are projected to come from the DPI (executive branch).

Lynns beat is the State, not Wake County or the Federal Gov. Not accounted for are almost 3X the dollar amount in Federal grants ($86M) that expire the end of June.

Some of this money was used for Title I, IDEA, custodians and bus drivers. It is likely that a substantial amount was spent on teachers - but I am not sure exactly how much.

Gurley=Margiotta said it was used to "build capacity".  That would only be accurate if the funds were used to buy equipment such as computers, supples, or was used for training teachers. Does any one know? Perhaps Keung could get a break down. But thats sort of like counting deck chairs on the Titanic.

What will happen when the new 2011 budget is prepared is that all estimated revenues not mandated by the State or Feds, will go into a mixmaster and doled out by BOE. How they distribute the pain will be an expression of their priorities.

Two more things to keep in mind.

1. The amount coming from the state for operations will not be known till the end of the GA session, likely in Aug./Sept. The BOC operating budget must be finalized by the last day of June. It will contain the operating grant agreed upon by the BOC with input from the BOE.  At both the state and local level there is a lot of maneuvering at the end of the process. E.g. Hypothetically, the Governor could avoid signing the budget until she extracted a pound of flesh. This keeps everyone in session at a time when they want to get out of Raleigh. So "it ain't over untill the fat lady sings." (remember: the construction budget is approved piece by piece by the BOC without regards to deadlines).

The governors proposed budget will arrive sometime in January. But her powers are extremely limited. The GA makes the final decision..but see below. The key influence in Wake's delagation will be Senator Richard Stevens who sits on critical education committees.

This mismatch in time gives fits to the superintendent and principals regarding writing short-term contracts for teachers. Inescapably, there is a lot of guess work involved.

2. Even though the County gives far less than the State (about half as much last year) its contribution has no string attached - unlike the state's contribution. How its doled out is again an expression of BOE priorities. How much the County gives is an expression of its priorities. The County money is used for expenses not mandated by the State including signing bonuses, special courses, what ever.

Finally, if the BOE and the BOC and staffs are not meeting in January, jointly discussing needs, wants, trade-offs - the conclusion should be that the decisions are going to be made behind closed doors - likely by the Republican Party.

The State should have

The State should have considerd long term when approving money for things that MAY not work or things we don't need.

NBPTS (just for the ones who made it) has cost taxpayers over $40 million (using the # of NBPTS teachers in NC from the NBPTS web site).  If you believe the rhetoric of how "challenging" this process is then for every teacher that makes it there are 2 who do not.  That ballons the cost for APPLICATION ONLY to a whopping 120 million taxpayer dollars.  This does NOT include the extra 12% pay for 10 years for each of those 15, 681 teachers.  These teachers ALL have over three years experience to even apply for NBPTS.  The conservative figure is in the hundreds of millions of dollars.

Now, with no real proof of effectiveness, NC has taken on a NEW teacher evaluation process that holds ALL NC teachers to the standards set forth by NBPTS.  This process, too, is costing NC taxpayers millions.  Now if you wonder or doubt...... simply go to a search engine online and research (nbpts effectiveness) and you will find at least 3 studies that show no effectiveness of NBPTS teachers to every one that does.  Yet, we still keep paying for this product.  Even NBPTS hired a group to study effectiveness and that group found little or no effectiveness.  There are no REAL wide spread studies done, only one school, a couple fo classes, a small amount of data.

Then there is the NCWISE fiasco.  In the early to mid 90s a man was hired to develop a new data system.  This was an "off the shelf" product that did not work.  This system has been bought and sold numerous times and has cost (conservatively) over 300 million dollars.

Bloggers keep asking about "data."  Well, there has been plenty of "data" presented to your state reps and they have consistently ignored this "data" and contin ued to fund these useless practices.  Now ALL NC teachers will be held to the NBPTS standards, but with no pay to supplement.

NCWISE

Are you talking about the state NCWISE or Wake's personal version of NCWISE? We were told by E&R that they were having a hard time generating data for the ED Task Force because their NCWISE could not merge easily with the state's NCWISE. Just wondering if you knew how much money was spent by Wake to have their own system, that now must go away because of RttT.
 

the "State version" of

the "State version" of NCWISE was the over 300 million in cost to taxpayers and the "state version" was implemented circa 1998.  My Wake County School was a pilot for this.  I have posted before, the tech person for NCWISE came to our school around Nov/Dec to help us enter our quarter grades for quarter 1 and 2.  We were also asked to enter our semester grades.  when I asked the tech rep if we had to enter our semester grades after I had entered my quarter grades this person seemed confused.  I explained that all of the grading programs I had used would auto-average the quarter grades (truthfully my $30 teachers toolbox program 'did it all').  This tech rep looked pensive for a moment and then said, "That's a good idea."  LOL

I cannot remember how long the state had NCWISE before the counties took over.  However, I do know that at some point the counties became responsible for their NCWISE.....although the base system was the same.

I knew a man who worked for Oracle a few years back and he used to tell horror stories about how each wekk, at the brief, the WCPSS people would ask for this change and that change making it more and more difficult to finalize their software (Oracle).  These WCPSS people had no understanding of what it took to change something in a software program.  This man finally told them they had to stop and allow Oracle to complete their tasking.  I'd tell you what he said of the NCWISE system, but that would inappropriate language here.

Clarification here......when

Clarification here......when I said "one school" I mean that a number of studies were published to say that NBPTS teachers ARE more effective I meant that many studies were done based on data from one school.  Example, a study released maybe 10 years ago boasted this "fact" and detailed test scores.  At no time in that report was it ever mentioned that this "data" was from one elementary school in the midwest and that the scores were from two elementary math classes.  It may also be a great read for some....NBPTS; Is NC getting it's monies worth.....a paper written by George Leef.

You are correct.  I have

You are correct.  I have many friends that are teachers and a few that are NBCT...and sadly many of the ones that have their NBCT, will say honestly, it was for the money and it was just a "dog and pony show".  They just had to know the formula and how to write and say the right key words and phrases.  It did not prove that they were any better than those who do not have it.  In fact a friend said that a few teachers at her school that obtained it, were not good teachers.  The teachers who she referred to , were simply good "talkers" and "great writers".  Yes, the state will continue to have to pay more for this for years to come.  However we can thank the Education Governor God himself Jim Hunt for that.  It was just another one of those "feel good awards" or I should say in this situation "feel good distinction" for NC to be on top of the number of NBCT teachers in this nation.

Apparently, too, we have

Apparently, too, we have "Brother" Jim to thank for NCWISE. 

Well, maybe one good things

Well, maybe one good things will come of this cuts.  If they get rid of so many teachers and pretty much all assistants...leaving the funding only for K teachers, then maybe the public will get off the backs of the teachers.  Teachers will finally get their credit.  Teachers can not do all the work and have all the responsibility of educating 30 kids in the room this day and time.  The county as put in force all this paperwork and documentation and spreedsheets to show progress.  Now most of this progress has to be documented and most documentation of assessments are suppose to be individualized with whatI hear called "progress monitoring"....how in the HECK is a teacher suppose to provide this effectively ALONE with 30+ kids, along with managing discipline, the rest of the curriculum, etc.  Good luck people.  God bless the teachers and God bless the the poor students in schools this day and time.  They are the ones that will get shafted BADLY in this deal.  But hey, teachers are miracle workers, they have total control, and they have the ability of God himself...as most of the teacher hating public thinks. Thankfully we will have the top heavy DPI and the VERY TOP HEAVY WCPSS central office with all their "valuable" senior admin. and committees that will jump in and help the teachers.  Hey I couldnt' say that last sentence with a straight face.  They will pile more on the teachers, and you know why?  They will have to, in order to SAVE their money sucking useless jobs they are enjoying hiding behind a desk up on Wake Forest Rd...soon to be out at Crossroads in Cary.

WCPSS Salaries

Just looked at WCPSS salary bands at http://www.wcpss.net/salary-schedules/

The highest paid teacher get about $75K. The lowest paid administrator gets about $78K.  These are the maximum possible. The salaries on the technology side are astronomical and that doesn't even include the "consultant" rates.

That is where the problem is and that is where the main cuts need to be.

Best to look at the median

Best to look at the median since the extremes are not representative.

Why is it teachers are the always first to go?

Why don't I ever hear that the acting Superintendent (who currently gets an extra $5000 per month) is getting a pay cut to save a couple of teacher's jobs? What about all those highly-paid consultants to WCPSS who never get a cut?  Why do the $15k/year and $35k/year jobs (the most important ones) get cut first?

Why is there no outrage about this? What the heck is the BoE doing? Other than bickering amongst themselves.

Think, too, about how

Think, too, about how teachers, for the past three years, have received no incentive pay (schools who made growth got NO bonuses).  While the cost of living has risen there has been NO raise in pay for three years now.  AND teachers have been frozen at their step.....for three years.  In essence teachers have already shouldered the burden for balancing the budget.

Last year the reps in Raleigh looked at not only doing away National Board pay......not a bad idea......they also looked at taking away pay for masters and advanced degree.  In short, teachers with a master of arts/science degree would loose their pay.  Some teachers, with NBPTS and Masters degrees were looking at possibly loosing over 30% of their pay.

Yup..

It stinks to be the person losing 30% of your pay -- you've grown accustomed to that salary and may have even made financial commitments assuming it would continue.

*However*, the district (and the state) needs to be sure that the incentive system they set up for teachers actually reward things that will make an improvement in the classroom.  If National Board certification and advanced degrees don't do that, then we shouldn't be paying teachers more if they have those things. 

Incidentally, many people have gone without raises for three years, not just teachers.  And, the cost of living really hasn't risen substantially in those three years.  Heck, mortgage rates (and, thus, payments) have fallen significantly.

Same as a lot of people I know in the prviate sector

It is a tough economy all around and I do not mean to sound crass, but are there not millions of people in the pivate sector econmy that have lost their jobs and if not have been without pay raises and had to take pay cuts as well? 

Everyone is suffering and teachers do not seem to have it worse than others - actually I think from a job security standpoint they have faed much better than most.  E.g. the stimulus a lot of the money went to schools to repvent layoffs the last 2 years (admittedly paying the price now).  I would reckon a lot of employees in private industres would have welcomed some stimulus $ to keep working.

Sorry, but when big business

Sorry, but when big business gets bailed out by the FEDS to a tune of (I may be off a bit here on numbers) a tidy sum that could provide every working person in the country some $100,000 I have throw the penalty flag.  Banks and other businesses have not fared all that badly.  The news abounds with those stories.  Teaching is not a business, it is a service.  Unlike business we do not get to discard a bad product.....we have kids placed in our classroom are brilliant to kids who cannot tie their shoe....literally.  (I am talking middle school).  In our world as teachers we have kids cuss us out almost daily in many schools with no consequences placed upon that child.  I have watched younf men grope young womens private parts (and I do not mean breasts) in a crowded hallway where dozens see him do it.....and nothing gets done.  I have seen teachers treated as badly as you can imagine and the principals that have done this walk away scott free.

What a teacher must deal with from students and parents is nothing like many businesses.  Well, police officers get the same treatments.  Unless someone has been there it is unbelievable.

Hmm...

I have watched youn[g] men grope young womens private parts (and I do not mean breasts) in a crowded hallway where dozens see him do it.....and nothing gets done.

Let me guess... RDU security checkpoint?

I'm with you on the whole idea that companies who take risks should not be bailed out when those risks turn out poorly -- it's not just banks; consider GM.

But, I don't know what that has to do with teachers.

 

This would be the money

This would be the money settled for out of court as to the sexual harrassment things that are never revealed....takes away from the budget.

Cost of living

The real cost of living is up significantly. Sure big screen tvs and electronics have come down, but these hardly sustain life. I can tell you do not do the grocery shopping - smaller packages same price or just flat out price increases. As for mortgage rates - that is if you are lucky enough to be able to refinance and frankly not much lower than 7 years ago.   Employee health insurance contributions are up across the board and continue to eat away at a families disposable income.  

So...

Since this time in 2007, CPI is up 4.6%.  Historically speaking, that's a tiny increase -- typical is around 3% per year.  The problem is that we pay a lot more attention to price increases than we do to price decreases..  Food prices are up, but eggs are down substantially.  Transportation costs are down, Apparel is flat, Energy is down, Housing is flat, Durables are down, Household Furnishings are down, Medical Care is up.  If you focus on food and medical care, you ignore all the other parts.

Plus, CPI-U overstates inflation by, among other things, ignoring changes in quality.  Our van has 200K+ miles on it -- a 1980 model year van never would have made it that far.  The cost to replace that van is reflected in CPI-U, but the fact that we have to buy it half as often isn't.

Several Points

Some in agreement, some in disagreement - most only tangential to a school discussion:

1)  Agred that overall inflation is historically low.   Here's a good graph of "core inflation" (though keep n mind that "core" doesn't include food or energy so is not really reflective of cost of living):

http://research.stlouisfed.org/fred2/graph/?chart_type=line&s[1][id]=CPILFENS&s[1][transformation]=pc1

2)  "If you focus on food and medical care" you are actually focusing on two of the three biggest variable costs (the the third being energy) most households face.  Most of the other stuff you list - the stuff that went down - is stuff that can either be put off (durables, furnishings) or where a cost is generally "locked in" for longer periods (housing via mortgage or lease terms) or mortgage. 

3) On the contrary, CPI-U  UNDERSTATES actual household inflation as a rule by making lots of dubious adjustments.  It's actually *designed* to understate inflaton since so many federal budget items are directly tied to it.  (See: Boskin Commission)

2007 CPI

The issue with using 2007 as the base is that 2007 was the peak for commodities within a 1 year run up.  If compensation had increased at the rate of commodities during that one year period, your comments make sense. With regards to durable goods - these are not replaced frequently. My wife and I were talking about the old days when durable goods lasted 15-20 years, not like today (so much for quality) . Regarding automobiles - I considered my Saab just getting broken in at 200k miles.  I think you will find that real wages are not keeping pace with the cost of living. 

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About the blogger

T. Keung Hui covers Wake schools.
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