News Story

Carman-Ainsworth Schools: Multi-Million-Dollar Deficits and 6.7 Percent Raises

In January 2010, media reports were warning that the state of Michigan’s government was facing “steep budget” cuts, with a projected deficit of $1.5 billion, and that chronic deficits for years to come would impact K-12 school funding.

About five months later, the Carman-Ainsworth Community School financial audit showed that the district’s expenses had exceeded revenues by $1.8 million in the fiscal year ending June 30, 2010. The district’s spending had increased by $1.6 million in 2010 compared to the previous year. Yet, on June 22, 2010, the school board approved a contract with its teachers that handed out raises as high as 6.7 percent for teachers with fewer than 12 years of service. Teachers with more than 12 years of service were to get raises between 1.5 to 2.5 percent.

The school board also negotiated away a $500 annual health care premium co-sharing that the teachers were contributing, in exchange for the union agreeing to a cheaper health care plan. The example given in the union contract showed that the cheaper health care plan could save the district about $750,000.

Under the new agreement, a teacher with a bachelor’s degree starting in 2009-10 would get a salary of $38,408. In 2010-11, that salary would increase to $40,386, a 5.1 percent increase. In 2011-12, the salary jumps 6.7 percent to $43,103. As a fourth-year teacher, such a person would get another 6.7 percent increase to $46,003 in 2012-13. Teachers with more experience and master’s degrees saw similar raises.

How could a school district that was over budget when experts were warning of dire financial times hand out hefty raises and offer a health care plan with no employee contributions?

School board members Don Conway, Peggy Anderson, Patrice Hatcher, Joy Hart, Ann Saunders and Recco Richardson didn’t respond to emails seeking comment.

Jack McHugh, a legislative analyst for the Mackinac Center for Public Policy, said it is about a too-cozy relationship between school boards and their unions.

“Taxpayers are shortchanged when the government employee union sits on both sides of the teacher compensation bargaining table,” McHugh wrote in an email. “This happens because of state laws that force every school employee to pay union dues or fees as a condition of employment, and force every school district to bargain with the union no matter how unreasonable or unaffordable its demands. Not surprisingly, one of the first things the unions use is the excessive resources and political power these laws grant them to get union members and sympathizers elected to school boards. Until the Legislature repeals the law that forces districts to engage in collective bargaining with government employee unions, this will not change. The deck will remain stacked against taxpayer interests, and stories like this will remain commonplace.”


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Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.