Tough Trade-Offs:  Find dollars in your benefits package

It’s budget time for districts and everyone is facing budget gaps—anywhere from 3% if you’re lucky to 14%, according to reports from our district partners. The challenges are formidable, especially when you’re looking to improve instruction. What can districts do? A new paper from the Center for Reinventing Public Education points to benefits as a place to look for help. Here’s why:

Total compensation (salary plus benefits) is up to 80% of district budgets, with benefits typically a third of salary. Every 10% you save in benefits is a 2% savings for your whole budget. That’s significant. Plus, benefits essentially mean healthcare, and we know costs are only going up. Freeing those extra dollars can help close your budget gap or you can use those dollars to strategically invest in your students.  Consider these investments:

• Offer extra coaching or focused professional development in low performing schools=0.2% of budget
• Raise principal salary 20% in low performing schools=0.1% of budget
• Provide a $5K stipend for the top 10% of teachers for leadership and coaching=0.5% of budget
• Hire one extra evaluator per 100 teachers=0.5% of budget

For guidance on one strategy for lowering benefit costs, the Center for Reinventing Education released today a new brief presenting a smart, creative strategy that will help.  The Promise of Cafeteria-Style Benefits for Districts and Teachers, written by Noah Wepman, Marguerite Roza, and Cristina Sepe, considers, in their words: “a hypothetical cafeteria plan with a set worth and a menu of options that allows teachers to create benefits packages based on their preferences. For example, a second-year teacher without a family might make different choices regarding health insurance, life insurance, and sick days than a 15-year veteran with a family. The brief also describes how a district might structure cafeteria plans, each with different implications for predictability and stability of costs.” In other words, the strategy will both cap costs and better meet the needs of your workforce.  These materials can help you understand the opportunity for your district and communicate it to your stakeholders.