Governor Vetoes Continuing Contract Reform: Children Lose Again

Yesterday, I began a series of posts on last-in first out.   The last-in first-out principle is embodied in Minnesota teacher tenure laws and collective bargaining laws.   The effect of the two (tenure laws and collective bargaining agreements) taken together is to require school districts to retain the most experienced and most costly teachers when financial considerations for teachers layoffs.  In my last post, I argued that the last-in first-out legislation, vetoed by the Governor, would not have resulted in the promised benefits.  Call me a last-in first-out skeptic.

But then, the Governor vetoed a second bill from the legislature, which would have provided school district relief from unaffordable compensation increases during the so-called "contract in effect," while bargaining is proceeding.  In today's post, I want to explain the relationship between the two vetoes and suggest  that taken together, these two pieces of legislation, and the accompanying vetoes, are symbolic of the deep dysfunctionality of Minnesot'as education finance system and the complete failure of the two political parties to find a balanced solution to the mess that is Minnesota's school finance system.  

The Republican continuing contract reform simply said that when a labor contract expires, a school district cannot be forced, while bargaining is under way, to spend money that it doesn't have to fund increases that have not yet been agreed to for the next year's contract.   The Republican position is that school boards should not be able to insert pay increases in the current collective bargaining agreement that would take effect in the next bargaining agreement, before that next bargaining agreement is signed.  Some contracts allow such increases, and others prevent them, but the Republicans were trying to prevent careless school boards from granting such future increases when funding is not yet known.    The reason is that school boards don't know, when they sign the current collective bargaining agreement, whether the legislature will provide them with sufficient funding in the next biennium, to take care of any automatic increases.   If those increases are not funded, then they have to be covered by staff layoffs and program cuts, and kids wind up paying the price.   Indeed, one of the major reasons that we see school districts laying off teachers (leading to the LIFO debate) is that they sign agreements calling for future cost increases that school districts  cannot afford.

The background for this problem is  Minnesota's contract-in-effect law.  Under Minnesota's Public Employees Relations Act (PELRA) a public education collective bargaining agreement lasts for two years.    You can find the basic ground-rules for all public labor contracts at Minnesota Statutes Section 179A.20.   When the collective bargaining agreement comes to an end, the kids still need to go to school, and the teachers still have to keep teaching.  Although the newspapers sometimes claim that the teachers are "working without a contract," that's not true at all.   That's where Minnesota's continuing contract law comes into play.  Subdivision 6 of section 179A.20 states:

During the period after contract expiration and prior to the date when the right to strike matures, and for additional time if the parties agree, the terms of an existing contract shall continue in effect and shall be enforceable upon both parties.

But what about the built in raises in a contract, such as steps, lanes,  and health insurance cost increases.  Do those increases go into effect, or don't they in the continuing contract?  The answer is that the old collective bargaining agreement itself answers that question.    In some labor contracts, the continuing contract allows for significant increases that can raise the school district's costs considerably  even before bargaining takes place.  In other school districts, the continuing contract includes very few automatic increases, and the labor union has to bargain for those increases during the negotiations for the new contract.   As I said, in years when the legislature provides school districts with no increases at all, if an individual district has a continuing contract with very significant increases, the result is major cuts even before completion of negotiations.   And, when teachers are cut, the last-in first-out principle says that newer teachers should be laid off first.

The Republican bill vetoed by the Governor read as follows:

Subd. 6. Contract in effect. (a) During the period after contract expiration and prior to the date when the right to strike matures, and for additional time if the parties agree, the terms of an existing contract shall continue in effect and shall be enforceable upon both parties, except as provided in paragraph (b).

(b) A contract term does not continue in effect and is not enforceable after the expiration date stated in the contract, and the parties may not agree to extend or honor a contract term beyond the expiration date of the contract if the contract term would:(1) provide a wage or salary increase to an employee, including but not limited to an increase based on cost of living, longevity, education or training, or performance or merit; or(2) provide an increase in the dollar amount of an employer contribution for insurance benefits above the amount paid under the expired contract.c) Paragraph (b) does not apply to the state employee law enforcement unit, the state employee correctional guards unit, the University of Minnesota law enforcement unit, or to other firefighters, peace officers subject to licensure under sections 626.84 to 626.863, or guards at correctional facilities.EFFECTIVE DATE.This section is effective the day following final enactment. For a collective bargaining agreement that expired before the effective date of this section, the requirements of this section apply to limit wages and benefits to the levels and amounts in effect on the effective date of this section.

Now comes the dysfunctional part.   There are two rational  solutions to this problem that arises from automatic cost increases, and the two parties have agreed to neither of them.   One of them,  which would be fair to teachers and to children, would allow districts to grant automatic future funding increases, as the Governor evidently favors, but to provide adequate state funding for those increases, so that the increases don't get funded by program cuts and teacher reductions.   But the Governor hasn't provided for funding for these increases, and so the effect of the Governor's veto is to leave those districts in Minnesota that have significant escalators in their collective bargaining agreements vulnerable to having to make major cuts every two years, to fund them.  

The other solution is the one proposed by the republicans, to bar increases until the school district agrees to them, after finding out what the legislature is going to provide in funding support.  But the Governor's veto has stricken that alternative leaving many districts in the lurch.   

What we have in Minnesota, then, is a dysfunctional system in which the Democrats consistently support a school finance and labor system which encourage school districts to make long-term financial commitments that they cannot be sure they can afford, and in which the Republicans consistently underfund school districts so that they must fund those cost increases by taking it out of the hides of children.      This entire debate about last in, first out, is a manifestation of that dysfunctional system.    

When you are elected to a Minnesota School board, you are soon presented with budget scenarios that show that your current collective bargaining agreement poses a substantial risk, if carried forward into future years, that your school district will be financially destroyed.   You are constantly advised by the people in the know that this is just the way things work, and that you have to accept budgeting and planning practices that put children at risk, that risk complete destruction of public education as we know it.  You have to become acculturated to the idea that you should make terrible decisions, when viewed from the perspective of the future, but accept that the consequences of those bad decisions will happen several years later, when people have forgotten who caused them.   We need, I suggest, for our leaders at the state level, republicans and democrats, to come together and provide us with a new financial framework that puts children first, but also provides realistic and reliable financial support to pay teachers appropriately, without putting our children's education constantly at risk.   In my view, doing this is what the Minnesota Constitutional guarantee of a thorough and efficient public school system means.  

The Governor and the Republican majority have failed us this year because each side has advanced a vision for public education finance that cannot command the support of the other.   And the result is another two years of school finance dysfunctionality not worthy of a great nation and a great state.