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The Cost of the Teacher’s Experience Increment in Harford County

The Cost of the Teacher’s Experience Increment in Harford County. An Historic Misperception on the Added Yearly Cost When the Increment is Provided. What is the Perception.

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The Cost of the Teacher’s Experience Increment in Harford County

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  1. The Cost of the Teacher’s Experience Increment in Harford County An Historic Misperception on the Added Yearly Cost When the Increment is Provided

  2. What is the Perception The Perception (and Official Claim) is that to Grant the Increment the budget to fund salaries must be increased (from prior year) by a 3% increase. [Some Historic Claims Put the Figure at 3.5% and 4%.]

  3. How Did This MisperceptionBecome Ingrained Misperception Goes Back Several Decades in Harford County but Persists to This Day Presentation is Based on an Extensive Paper That Has Analyzed The Issue In Depth

  4. Examples of What Has Caused This Cost Perception

  5. Paper Addresses the Issue from First Principles with Extensive HCPS Data • Presentation is Based on Extracts from Paper titled: “The Mathematics of Budgeting for Experience Increments in a Teaching System or Other Workforce” • The paper will be placed on the Internet • I Invite Critique of the Math and Data Used

  6. Inherent Cost Components/Features of a System With Pay Progression (Increments) • Increment Pay Schedule Tied to Certification and Experience • Continual Refreshment/Renewal of Staff (Turnover from Retirements and Dropouts)

  7. Continual Refreshment of StaffNumber of Teachers by Years Experience- Comparison of HCPS to Recent National Data

  8. Want to Compute the % Change in Payroll (PCP) if the Increment is Provided PCP = % Due to Pay Progression (PCIA) - % Due to Inherent Staff Renewal(PCTO) PCP = PCIA -PCTO The Gist of the Computations

  9. Computing PCIA • P1 = Reference Year Payroll cost • P2i = Projected Year Payroll Cost • PCIA = 100 x (P2i – P1) / P1 • Note: Data used and computations apply to 2979 HCPS certificated staff

  10. The Actual Numbers versus the Perception [An Advance Look] • The Perception PCP=3%, 3.5% or 4.% • Actuality • For current nominal HCPS Conditions • PCIA= 1.78 % • PCTO= 2.09 % • PCP = - .31 % • Variability in PCP [At the End]

  11. What Data Do We Need To Make Calculations • Pay Schedule by Certification and Experience • Experience Distribution of Staff • Data on Turnover

  12. Extract of Data Set for HCPS Increment Pay Schedule [Complete Data Set Extends to 48 Years]

  13. Extract of Data Set for HCPS Teacher Experience [Complete Data Set Extends to 46 Years]

  14. Let’s Look at PCIA • PCIA = Percentage Change in Increment Alone • Assumes same staff size (and incumbents) • Increment is provided by standard schedule • Assumes no retirees and no separations (dropouts). All staff move up one year in experience (and pay if eligible) Need to Compute two Quantities P1 and P2i

  15. Computing P1, P2i and PCIA • P1 is the payroll in the “Reference year” • P2i is a fictitious * payroll in “Projected Year” • PCIA= 100x (P2i – P1)/P1 • *Though fictitious it’s a stepping stone, convenient for computation, and very illustrative in outcome

  16. Spread Sheet Calculation of Reference Year Cost (P1)

  17. Spread Sheet Calculation of Projected Year Cost With the Increment (P2i)

  18. Outcome should Not Have Been a Surprise

  19. Retirements and Dropouts (Turnover) • A Natural and Integral Component of a Progressive Pay System • Patterns are Largely Predictable for Large Relatively Stable Systems • The Model Addresses Variability from Driving Components such as Nret and Ndo, Dolev and Replev and Experience Distribution

  20. Modeling Turnover Pto and PCTO • Cost Reduction from Retirees = A2r • Cost Reduction from dropouts = A2d • Cost Increase Replacing Retirees = A1r • Cost Increase Replacing Dropouts = A1d • Pto= A2r +A2d – A1r-A1d • PCTO = 100 x Pto/ P1

  21. Important Note for Calculations • Retirees and Dropouts Salaries were computed in P2i at their Experience year y + 1 • To compute turnover changes in salaries their salaries (A2r and A2d) must be computed at years y + 1

  22. Extract of 3 Year HCPS Data on Retirees and Their Years of Service

  23. HCPS Retirement Distribution by Experience [Array RT(y) is a Key Component of the Model]

  24. HCPS 3 Year Data on Numbers of Appointments, Separations and Retirements (2010-11 and 2011-12)

  25. HCPS 3 Year Data on Numbers of Appointments, Separations and Retirements (2012-13)

  26. Analysis of 3 Year Data to Determine Effective Number of Retirees and Dropouts

  27. Accounting for Retirees • A2r Cost Eliminated by Nret Retirees • A1r Cost Incurred by Replacement for Nret Retirees • A2r = Sum [RT(y) x ES(y+1)/Nretref] x Nret =[Avg. Retirement Salary] x Nret • A1r = Nret x ES(Replev) • RT(y) No. of retirements with experience y • ES(y) Weighted Average Salary for retirees in year y • Replev Replacement Level

  28. Accounting for Dropouts • A2d = Cost Eliminated by Ndo Dropouts • A1d = Cost Incurred by Replacement for Ndo Dropouts • A2d = Ndo x ES(Dolev +1) • A1d = Ndo x ES(Replev)

  29. Turnover Computations* • A2r = $72,383 x 85 = $6,152,524 • A2d = $52,140 x 123= $6,861,801 • A1r = $42,435 x 80 = $3,606,980 • A1d = $42,435 x 123 = $5,219,513 • Pto = A2r +A2d –A1r –A1d = $3,739,240 • See Table MS-2 in the paper • MY Note: 5/30/2014 The final numbers above (as in the presentation) are correct per Table MS-2. Paper as presented to Board of Ed had two errors. The number for Ndo was incorrectly listed as 128 rather than the corrected 123. The number for G4 in A2d was listed as $46,629 and it should have been the corrected $52,140. The final $ numbers on the right however were correct as they were lifted from the computed final numbers in Table MS-2.

  30. Final Computation* for PCPPercentage Change Due to Increment • PCP = PCIA (Increment Alone) – PCTO (Turnover) • PCIA Was 1.78 % [Previous Computation] • PCTO = 100 x Pto/P1 [Pto and P1 Previous computation] • PCTO = 100 x 3,739,240 /178,568,433 = 2.09% • PCP = 1.78% - 2.09% = -.31 % • Contrast -.31% versus the Perception of 3%, 3.5% or 4% * See Table MS-2 in paper

  31. Variation of PCP With Key Parameters

  32. Added Observation: Withholding the Increment is Not Cost “Neutral” (PCIWH) • Withholding the Increment Leads to a “drop” in Payroll Costs by a Nominal 1.95% *For Certificated Teachers and a $179M payroll that is a drop of $3.5M *For 5000 plus HCPS staff with a $250 M payroll that is a drop of $4.9M

  33. Value of Single Stream Model • Provides a very robust mechanism to study the effect of experience distribution • Conclusion Based on Single Stream Model Calculations: • As the staff moves toward “forward year” experience humps PCP gets smaller and generally negative

  34. Next Steps • Place Paper on the Internet • Engender Peer Review My Hope: *Teachers, all HCPS and County Employees be Treated Fairly *If and When the Increment is Withheld, They be Told the Truth about the Cost Basis

  35. High Level Overview of Computational Scheme

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