Dig into it a bit, though, and it begins to make more sense. Here’s why.
Employers have fairly good control over salary; they can use their discretion on bonuses. But that control can count for very little because health care costs continue to rise at double-digit rates. And the more employees you have covered by the wrong kind of health insurance, the worse the pain gets.
Going into these teacher contract talks, which began last November, 40% of Verona’s 175 teachers were covered by an old-style indemnity insurance plan. If nothing had changed, Verona would have faced a 19% increase in health care costs, which would have taken a big chunk of the funds earmarked for compensation in the budget voters approved in April. So big that, if the teachers hadn’t agreed to think differently about health care, they would have had to take a pay cut to keep the Board of Education within budget.
Under the new contract, which was revealed at the most recent BOE meeting, the Verona Education Association–as the teacher’s union is known–agreed to drop the expensive plan. Combined with Gov. Chris Christie’s mandate that teachers pay 1.5% of their salary towards their benefits, the changes free up $825,000 to be put toward the $1.2 million that the salary increases will cost over two years.
BOE President John Quattrocchi notes that it is important for Verona to be able to offer pay increases because our teacher salaries are among the lowest of the schools in the so-called “I” districts, which include Caldwell, Cedar Grove and Glen Ridge. Under the new contract, a first-year Verona teacher with a bachelors degree would be paid $43,981. The average in the “I” districts for first-year teachers is $46,663, however, and the range is from $42,125 to $51,823. According to Quattrocchi, Verona is about 10% below the “I” district average on salaries, which could affect our ability to hire teachers, even in a dampened economy. And with New Jersey’s state-mandated spending caps, if Verona had had to implement a pay cut in this contract, it would have faced an even greater salary gap down the road.
“If we miss an opportunity to fund something,” says Quattrocchi, “we will be at even more of a disadvantage when the economy turns around.”
There’s one other advantage of the new contract, which isn’t apparent in the press release the BOE put on its Web site. Verona has standardized the contracts for its teaching and administrative personnel in recent years, which means that four administrators were also switched to managed care on July 1.
The contract isn’t perfect, but the reasons for its shortcomings generally lie in Trenton and not here. That, however, is for another story.