The more I dig into the details of the Memphis City Schools and Shelby County Schools, the more I realize that we can no longer afford the system as it is now structured. I will say that the Shelby County School system is more open and forthcoming but the basic structure of salaries, benefits and pensions is the same.
Now I have discovered what I consider a misstatement by Dr. Kriner Cash in his recent memo to the Memphis Board of Education. In the attached memo he stated the following.
In order for the new classified rate to become effective July 1, 2010, Board approval is required. However, it is important to note that Board approval is not required for a change in the teacher (certificated) rate. That rate will change from 6.42% to 9.05%.
COSTS: $1,200,000 estimated total for all funds
I wondered at the time I read this how it could only cost $1.2 million dollars extra when the total cost should be around $13.7 million. I asked some board members about this but got no response.
Then I read in the CA that the Shelby County System retirement costs were going up $3.6 million dollars on a smaller salary base. I got the documents from the County system and realized that the above statement for COSTS of $1.2 million only applied to the classified employees (not the certified teachers) and that in fact the total increase will be $1.2 million plus $12.5 million for a total of $13.7 million. Was the above statement an error or deliberate?
What we have here is an educational system that we can no longer afford. The City of Memphis School system is costing in annual pension costs, $91 million plus $48 million in social security and medicare costs for a total annual cost of $139 million. This is a far greater percentage of payroll (13.89% and 16.69%) then we are paying for the City of Memphis, Shelby County or the MLGW. We are giving the teachers social security and a defined benefit plan and in addition, the Memphis School System has over $1.4 billion dollars of unfunded liability in OPEB costs even though we are paying an annual retiree and health care and life insurance cost of $33 million.
Consider the following figures.
- The Memphis City School System has an annual pension cost of $139 million.
- The City of Memphis has an annual pension cost of $16 million.
- Shelby County has an annual pension cost of $18 million.
- MLGW has an annual pension cost of $28 million.
- The Memphis City Schools have 15240 employees. Memphis, Shelby County and the MLGW have 16,027 employees.
- Therefore you have $139 million going for 15240 employee pensions versus $62 million going for 16207 employees. That is $9120 per school employee versus $3825 per city, county and mlgw employees. The county school system has similar figures to the Memphis School System but a lesser number of employees.
Something needs to change and I propose a change to the education system. We need to go to more charter schools and use vouchers like they are now doing in New Orleans. I have attached an article that shows the revolution that has come to New Orleans and Louisiana in the post Katrina era. Taxpayers and newly elected politicians came together and put together a sensible, better and more affordable system and it is working. We can no longer put up with this bloated, expensive and union dictated system here in Memphis, Shelby County and Tennessee. I call on citizen groups to come together and reform the system to one that teaches more, leads to better results and costs less.