• Questions and Answers on the Proposed CPSB ½¢ Sales Tax Election for Salary Increases

    On Tuesday, January 13, 2015, the Calcasieu Parish School Board unanimously approved a resolution to call a special election on Saturday, May 2, 2015, for a parishwide half-cent sales tax to fund teacher and support staff salary increases.

    The questions and answers below provide helpful information about the proposed tax in the following areas:

    All questions regarding the proposed sales tax election and salary increases should be sent to wilfred.bourne@cpsb.org.

    Basics on CPSB Employee Recruitment, Retainment, and Pay

    1. What are the challenges facing the school system in regards to filling employee vacancies and retaining effective educators?

    Statistics on teacher certification for the 2014-2015 school year show Calcasieu employs 261 (10.24%) uncertified teachers out of a total of 2,548 teachers. The number of prospective educators entering universities over the last several years has continued to decline with McNeese State University graduating 222 education candidates in 2010 and 152 in 2014, a decrease of 32%. In a parish that is the 5th largest in the state, it is becoming more difficult to fill Calcasieu classroom openings with certified teachers. Calcasieu teachers rank 40th in the State of Louisiana in average teacher pay according to the last published report from the LDE. Our teachers have not received a raise with local funds since 2008.

    2. What is the distinction between teacher salary schedules and support salary schedules, relative to the proposed raises?

    The new ½¢ sales tax will fund an increase of $4,000 to the teacher’s salary schedule and 10% to all other employee salary schedules. Most positions in the school system that require a 4-year degree (2,997 employees) have salaries based on the teacher’s salary schedule. Teachers that work more than the regular school year receive their base daily teacher pay for each additional day worked. Administrator pay is based on the teacher’s salary schedule and indexed based on the specific assignment. For example, the average elementary principal index is 1.2891 X $4,000 = $5,156 raise from the new tax. The salary schedule specifically lists indexes for each administrative position. The 2014-15 CPSB salary schedules are available for review at the following link: https://www.cpsb.org/Page/511

    Most support positions that are not based on the teacher’s schedule will receive 10% increases based on the current schedules. Other proposed changes include extending all schedules that currently have less than 20 steps to 20 or 22 steps, including bus drivers, cafeteria technicians, and all employees on the auxiliary schedule. Custodian and cafeteria schedules will also be modified to provide for annual increases rather than one every five years. 
     
    Those teachers and administrators that obtain advanced degrees in the future will receive $1,600 increases reflected in the salary schedule to provide incentives for furthering their education.
     
    Salaries  

    3. What is the current total cost of salaries for teachers, support personnel, school administrators, and district administrators?

    Each year for the last decade, the School Board has presented statistics on general fund expenditures by category and general fund salaries by category. Only grants and specially funded programs are not accounted for in the general fund.

    The following information for the fiscal year ending June 30, 2014, was recently presented to the School Board:
     
    General Fund Expenditures
     
    General Fund Breakdown  

    Central administration includes department heads, directors, coordinators, and supervisors from the following departments: superintendent’s office, auxiliary services, personnel, risk management, accounting, auditing, accounts payable, finance, payroll, management information systems, warehouse/textbooks, transportation, maintenance, purchasing, public information, fixed assets, curriculum and instruction, elementary/middle/high school depts., career and technical education, gifted/advanced studies, technology, facilities, special services, pupil appraisal, child welfare and attendance, grant procurement, and sales tax. 

    4. It seems the district pays too many people to run programs that may not directly benefit students. How does the district audit the effectiveness and usefulness of its programs?

    The State of Louisiana mandates that a minimum of 70% of a school system’s general fund budget be spent on instruction. Calcasieu has exceeded the 70% requirement each year, as published by the Louisiana Department of Education (LDE) annually. Calcasieu is historically well known for excelling in music, arts, technology, and other special programs. LDE also produces statistics comparing the number of employees by category in the annual Profile of Educational Personnel Report, which shows Calcasieu falling well within statewide averages. Because of the many programs Calcasieu offers and an emphasis on small class sizes where possible, the system’s average pupil/teacher ratio of 13.21 is better than average.

    Calcasieu has cyclical grant programs monitored by the state and federal government to insure that the district operates within expected standards for efficiency and effectiveness. Those same standards are also tested in an annual external financial and compliance audit which measures the system against specific standards.

    Explanation of the Proposed Sales Tax

    5. The amount of the tax collected in the first year is estimated to be $22,500,000 dollars. Raise estimates for the first full year are $20.7 million dollars. What are the plans for the $2 million that will not be spent in the first year of the raises?

    All proceeds from the proposed ½¢ sales tax will be dedicated to employee salaries and benefits as listed on the proposition. The initial plans for employee salary changes provide a $2,000,000 contingency to protect against instability, as sales tax revenues can be volatile and vary based on economic conditions. Any dollars collected over what is required to provide initial raises will be set aside for future salary supplements or raises once the revenue stream is proven to be stable. The new tax will have its own accounting structure to insure that funds are tracked.

    6. Wouldn’t a new sales tax require employees to pay for their own raises? How much money would a person have to spend to account for a $4,000 raise?

    A ½¢ sales tax represents ½ of one cent (.005) on each taxable dollar spent by a consumer. For example, a consumer buying a $200 item will pay an additional $1 in sales taxes should the new tax pass. Several teachers have questioned whether a $4,000 raise would be beneficial if they too would have to pay the new tax. In order to pay $4,000 in new taxes per year, an individual would need to spend $800,000 on taxable purchases in a year. ($800,000 X .005 = $4,000)

    7. What does the word “benefits” refer to in the language of the proposed tax and how much money does the district spend on benefits per employee and as a whole?

    Benefits for the School Board generally include payments for retirement, health insurance, Medicare, and worker’s compensation. Nearly 26% of Calcasieu’s general fund budget is spent on employee benefits. Benefit costs represent between 40% and 59% of every salary dollar, depending on which retirement system an employee must be enrolled in. The following rates are currently in effect:

    • Teacher’s Retirement System - (teacher based, aides, clerical) - 28%
    • Louisiana School Employees Retirement System- (custodians, bus drivers, maintenance, warehouse, mechanics) - 33%
    • Health/Life Insurance - 10% average
    • Medicare-for employees hired after 1986 - 1.45%
    • Worker’s Compensation: Teachers/Professionals - 1%
      • Drivers/Helpers - 5.6%
      • Cafeteria, maintenance, custodians, others - 14.8%

    Retirement, Medicare, and worker’s compensation are benefits directly tied to salaries as a percentage, while health and life insurance are indirect benefits not directly tied to salaries. The proposed tax will not cover indirect benefit costs (health/life insurance), as those costs still exist with or without the approval of the tax.  

    Example benefits calculation based on current teacher salary schedule

    $39,461.00

    Base Salary (step 1)

    $572.18

    1.45% Medicare

    $349.61

    1% Worker’s Comp.

    $11,049.08

    28% Teacher Retirement

    $51,476.87

    Total Salary Cost*

    * Does not include indirect benefits

    Example benefits calculation based on current teacher salary schedule (step 1) with $4,000 proposed increase

    $43,461.00

    Base Salary (step 1)

    $630.18

    1.45% Medicare

    $434.61

    1% Worker’s Comp.

    $12,169.08

    28% Teacher Retirement

    $56,694.87

    Total Salary Cost*

    * Does not include indirect benefits

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    Current CPSB Tax and Riverboat Revenues

    8. What sales taxes are already on the books for the Calcasieu Parish School Board?

    The Calcasieu Parish School Board currently levies the following parishwide sales taxes:

    1¢ Original Approval – 1968 (Permanent)- used “exclusively to supplement other revenues available to the School Board for the payment of salaries of teachers in the public elementary and secondary schools of the Parish and for the expenses of operating said schools, such operating expenses to include payment of salaries of other personnel employed by the School Board in addition to teachers, and for such other uses as are now or may be hereinafter provided for by law.”

    ½¢ Original Approval – 1987 (5 years)- Last renewed in 2012 (10 years) - used “to offset losses of revenues from the State of Louisiana, and/or supplementing other revenues available to the district.”

    ½¢ Original Approval-1995 (10 years)-Last renewed in 2014 (10 years) - used “for the purpose of supplementing salaries of teachers and other employees of the Calcasieu Parish School Board.”

    9. Where does Calcasieu rank in the amount of state revenues and local taxes compared to other parishes in Louisiana?

    The Minimum Foundation Program (MFP), Louisiana’s funding formula for K-12 education, provides 51.4% of Calcasieu Parish School Board’s general fund revenues. Another 11.3 % of the general fund revenues come from property taxes, with 32.7% from sales taxes. The MFP is a fairly complicated formula that uses local revenues and tax rates to help compute Calcasieu’s share of state dollars. Fifty-one (51) of the sixty-nine (69) school districts in the state (64 parishes and 5 city systems) receive more dollars per pupil than Calcasieu. Forty-five (45) of the sixty-nine (69) districts levy more average property tax mills than Calcasieu. When examining sales taxes rates for school districts across the state, Calcasieu falls within the average levying rate at 2%.  In Louisiana, 11 systems levy less than 2%, 39 systems levy 2%, and 19 systems levy more than 2%. 

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    10. What is the nature of the school board’s casino revenues and how have they been used?

    The Calcasieu Parish School Board began receiving Riverboat Head Tax Revenues in 1995-96 as a result of a law that was passed to provide dollars for each person entering the riverboats, which was allocated to Calcasieu Parish School Board (60%), McNeese State University (30%), and SOWELA (10%). In the first full year of implementation the total receipts for the School Board were $1.2 million. Because of the unpredictability of the revenues and the unknown future of riverboat casinos in the area, the School Board dedicated all funds to non-recurring expenditures. These funds cannot be used for salaries and benefits as they are recurring expenses.  The revenue stream was later converted to a percentage of total revenues rather than a head tax, but remained at about the same levels until L’Auberge was opened and Delta Downs was added to the revenue stream. Total collections for 2013-2014 were $2.8 million. The proceeds over the years have been used to build more than 350 permanent classrooms, purchase land for school expansion in nearly every area of the parish, and most recently to purchase buses.

    11. What will the 2015-2016 budget look like without the new tax revenues? Would the new tax help address the budget shortfalls the district has faced over the past few years? 

    The new ½¢ sales tax would be used for new salary and benefit expenditures and would not be used to offset expenditures in the current budget. Presently, the Calcasieu Parish School Board 2015-2016 budget is being planned without taking into account the benefit of revenues generated by the proposed ½¢ sales tax since the outcome is currently unknown. The new ½¢ will not be used to address any budget shortfalls incurred in the past or current year as it is solely dedicated to employee salaries and benefits.

    12. How does the Calcasieu Parish School Board collect and receive its taxes?

    All Calcasieu Parish sales and use taxes, including those levied by the School Board, are collected by the Calcasieu Parish School Board Sales and Use Tax Office acting on behalf of all tax levying bodies in the parish (e.g., Police Jury, City of Lake Charles).  A single tax collector for the parish allows vendors the opportunity to complete one form and remit taxes collected to one entity. Once collected, funds are transferred daily to the levying governmental bodies by electronic funds transfer. The Sales Tax Office employs both compliance and auditing specialists to insure that collection efforts are consistent, effective, and in accordance with the law.