Public Education’s Looming Fiscal Train Wreck

By 02/22/2010

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Bruce Thompson is the sole at-large member on the Milwaukee Public Schools Board of Directors.  An engineering professor at a local college, he is by far the most experienced, knowledgeable, and deliberate member of the nine-person board.  Unfortunately, in recent years he also has been among the least visible.

He breaks out of this recent silence in a commentary that appears in the February 21 Milwaukee Journal Sentinel.

A synopsis of Thompson’s message:

“For Milwaukee Public Schools, the financial crisis that many of us have been warning about is here. As principals get their initial budgets [for 2010-11], they are faced with cutting teachers; larger class sizes; the loss of specialty teachers such as those in art, music, physical education; and the loss of librarians….[M]uch of the MPS pain is self-inflicted. Next year, MPS is facing a 77% fringe benefit rate, meaning that the cost to the district of an employee is 77% more than that employee’s pay. If the unfunded liability for retiree benefits were correctly included, the fringe benefit rate would rise to almost 104%…”

What makes Thompson’s analysis significant is that it could be applied to a substantial number of public school districts today—urban and rural.  More and more, school officials are looking at the numbers and realizing they don’t add up.  More and more, the consequences of collective bargaining are beginning to be felt.

Issues such as grabbing Race to the Top money continue to command a disproportionate share of attention from the education media and other observers.  But these are nothing compared to the approaching fiscal train wreck in public education.

Comment on this article
  • Ben says:

    In addition to the pension time-bomb, the spiraling costs of fringe health insurance benefits and the salary schedule itself, James Guthrie and Arthur Peng do an excellent job identifying the other factors combining to bring a fiscal tidal wave to K-12 schools in a working paper they wrote for Fordham. I wrestle with their analysis here:

    Kudos to Mr. Thompson for his courage in taking on the situation. He is absolutely correct to finger the magnified power of public employee unions and interest groups in local school board elections as a major cost-driver. Dr. Terry Moe has done some excellent groundbreaking work in this area.

    We know what the problems are. I see Mr. Thompson’s proposal as a part of the solution. But seriously, where do we go from here?

  • George Mitchell says:


    Actual or de facto bankruptcy appears inevitable for the Milwaukee system and many like it. Barring very sizeable tax increases, the dollars simply won’t be there to pay the bills. Teachers either will have to agree to wage and/or benefit reductions or they will be imposed. The move to non-union personnel will grow. It will be a GM-like situation.

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