GILROY
– After agreeing to a two-year contract with teachers, Gilroy
Unified School District officials say future program cuts will have
to be made to pay for salary boosts and increases in health
benefits included in the deal.
By Lori Stuenkel
GILROY – After agreeing to a two-year contract with teachers, Gilroy Unified School District officials say future program cuts will have to be made to pay for salary boosts and increases in health benefits included in the deal.
A 3 percent pay raise starting this August and going through next June plus a projected 1-plus percent raise for health benefit increases will cost the district an estimated $1.2 million this year, said School Board President Jim Rogers. A 1 percent raise for teachers costs roughly $310,000, Rogers said. GUSD also covered higher health costs for 2002-03 that it says equaled a 2.5 percent increase.
The district has the money to pay the 3 percent raise and health costs for this year.
“We will be able to accommodate the increase,” Superintendent Edwin Diaz said.
However, the district must sustain higher salaries in the future, even as budget cuts are expected midyear.
“We had planned on re-establishing our process and looking at reducing expenditures for next year anyway, and with this settlement, we’re going to have to follow through on that,” Diaz said. “One of the things that’s important is, if it’s important to have good staff, then we need to make the commitment and readjust how we allocate our resources.”
Michelle Nelson, president of the Gilroy Teachers Association, agreed.
“I think what we would both like to do is increase compensation for employees,” Nelson said. “We’ll just be looking at different ways, maybe out-of-the-box, unconventional methods (for doing that).”
“We will identify all the major pieces in terms of how that will all be funded,” said Steve Brinkman, assistant superintendent of administrative services. “You need to roll up your sleeves and say, ‘OK, this is what we agreed upon, but how are we going to fund it?’ ”
The district cut $2.8 million from the 2003-04 budget. As the district is forced to make more cuts while funding higher salaries, some painful program cuts could be made, said School Board Trustee Bob Kraemer. District officials do not yet know which types of programs could see cuts.
“In approving this contract, we are saying that we now need to take funds from other places throughout the district, and that will come from programs,” Kraemer said. “(We will need to) work on the things we can most control and that is changing programs, and changing programs impacts people.”
The district had $935,000 left over from last year’s budget, which allowed the district to offer teachers a 2 percent salary increase retroactive to the start of the 2002-03 school year. Teachers declined the offer.
Under the current contractual agreement, the district will spend less of that money now but will need to spend more in the long run.
Because the raise is not retroactive to the end of the last contract, the district will not be hit with two 2-percent increases all at once, which would essentially be a 4 percent salary increase for 2003-04. But, teachers’ salaries will be 3 percent higher from here on out.
“It’s not a one-year deal. We’ve got to figure out how we’ll fund future years as well,” Brinkman said.
The district must also have funds to provide the scheduled pay increases to Gilroy teachers that are based on years of experience and level of education and take effect whether or not future negotiations result in a raise.
“As you enter into an agreement, the operational costs go up every year, so you need to continue to make reductions to sustain the increase over the next couple years,” Diaz said.
The district says that thanks to last year’s extra funds it has the money to cover this year’s salary increase, as well as the higher health and welfare benefits costs that equaled a 2.5 percent salary increase in 2002-03 and will equal a more than 1 percent increase this year.
Still, district officials are anticipating budget cuts come January, with more to follow in the future as the state wrangles with a $30-billion shortfall.
“Even with our offer for the 2 percent (increase), it was going to mean cuts for next year,” Diaz said.
In addition to allocating more money to pay teacher salaries, the district is facing rapidly rising health insurance costs.
“As we … make reductions for next year, we’re going to … make enough reductions so we can increase the health and welfare benefits,” Diaz said. “The concern comes down to, ‘What happens next year if we get another large increase?’ ”
“And … ‘How do we deal with that increase?’ And that’s something that we’ll have to look at next year. It’s projected to be a large increase,” Diaz said.
To get a jump-start on looking at future compensation increases, the district is forming a budget work group that will include administration, Gilroy Teachers Association and school board representatives.
The group meets for the first time Nov. 17 to discuss salary and health benefits issues.
