OUR OPINION: Grand Forks schools’ raises need fuller explanationSuppose you own a business in Grand Forks or East Grand Forks. Suppose your health insurer hits your company with a big rate increase, one that prompts you to split the premium hike with your employees.
By: Tom Dennis, Grand Forks Herald
Suppose you own a business in Grand Forks or East Grand Forks. Suppose your health insurer hits your company with a big rate increase, one that prompts you to split the premium hike with your employees.
Do you then turn around and give those employees a bigger-than-usual raise?
Then you, Mr. or Ms. Business Owner, probably are scratching your head about the Grand Forks School Board, which seems to have answered “Yes” to a similar question of its own.
“The Grand Forks School Board approved an increase in salaries and benefits for administrators and program directors for the next two years, saying earlier legislation requiring bigger contributions to the state pension fund drove the decision,” Herald staff writer Jennifer Johnson reported this week.
The new state law is as follows:
“In 2011, legislators increased contributions to the North Dakota Teachers’ Fund for Retirement, requiring higher payments from certified employees and districts from 2012 to 2014.
“That legislation bumped up the contribution by the district. Starting July 1, the district started paying 10.75 percent of the employees’ gross incomes into the fund, and in 2014-2015 it will pay 12.75 percent, (Business manager Vicky) Schwartz said.”
Now, what follows may be a misinterpretation; and if it is, we’d welcome a letter or column from the School Board that sets us straight.
But judging by the story, it sounds like the School Board tried to shield employees from seeing take-home pay fall because of the higher contributions that the pension fund is demanding.
Is that the case?
If it is, then a board member might want to write a letter or column anyway, because it would be interesting to learn the thinking behind the move.
There aren’t very many direct parallels with private industry, for the simple reason that so few private businesses offer traditional pensions these days. They can’t afford it.
But the parallel with health-insurance premiums may be close enough. And as business owners know, when Blue Cross Blue Shield of North Dakota or another insurer raises rates, that expense typically gets shared.
Which means “the employer pays some, and the employees pay some.”
Not “the employer pays all” or even anything close.
The board may also have had other reasons for giving raises. Typically, a big reason is to keep the salaries competitive.
But as mentioned before in this space, the real question is not what other districts are paying. The real question is whether turnover is high and job openings are failing to draw good applicants.
If those things are happening, then it’s time to raise pay. But not before — at least, not without a frank discussion about why this-or-that salary deserves an unusual bump.
During the recession, when many businesses found themselves with higher costs and lower revenues, they responded in a very different way: They stopped contributing to their employees’ 401(k)’s entirely.
That’s the real world most taxpayers live in. And that’s why, when school boards plead poverty, raise taxes and then look for and find reasons to raise pay, taxpayers may think the board has some explaining to do.