We’ve never been fans of COLAs: Cost Of Living Allowances, otherwise known as non-merit based pay raises tied to the cost of living.

The reason is simple.

The cost of living (usually measured by the Consumer Price Index, or “CPI”) has nothing whatsoever to do with legitimately increasing an employee’s compensation.  That’s normally the purpose of increased productivity, profitability and/or performance, either individually or as part of an organization’s success.

A COLA, on the other hand, is basically an insurance policy that guarantees the COLA-ed employee’s buying power from erosion by inflation. As the cost of living goes up, so does the employee’s pay to protect his/her ability to buy the same amount of stuff he/she could buy before.

Consider it a kind of financial bubble-wrap designed to further protect those COLA-ed employees from yet another of life’s common risks the rest of us have to endure.

Not surprisingly, such a disconnect of compensation from productivity tends to occur almost exclusively in the fantasy-land that is public-sector employment. And, not surprisingly, one of its strongest bastions is public education, where accountability basically doesn’t exist.

Which brings us to last week’s report in the Park Ridge Herald-Advocate of a new Maine Twp. High School District 207 teachers union contract (“New teachers’ contract approved for Maine Township High Schools,” May 8).

In typical school board fashion – both D-207 and Park Ridge-Niles School District 64 are guilty – this latest contract appears to have been negotiated behind closed doors with no information about its terms being released until after it became the proverbial “done deal,” ratified by the teachers union and approved by the D-207 Board on May 5.  Only then did the press releases get cranked out about “win-win” and all the other standard I’m-okay-you’re-okay palaver we’ve come to expect whenever the teachers unions and the bobble-headed school board members combine to fleece the taxpayers.

Listen to union president Mike Poehler:

“The agreement helps stabilize a financial base that ensures a rich curricular environment with diverse elective and core class offerings as well as extra curricular activities for the students of Maine Township High Schools well into the future.”

George Orwell’s “Big Brother” would have been okay with that, especially the part about the “rich curricular environment” – even as the District’s objectively measurable performance and rankings continue their decline while teacher and administrator pay continues to increase, as we noted in our post: “Are Our Schools Threatening Park Ridge Property Values?” (11.04.13)..

Now listen to School Board president Margaret McGrath:

“The settlement is fair to all parties, fiscally conservative for our taxpayers, and it provides long-term cost savings to the District.”

How exactly does it do that?

We can’t say for sure because we couldn’t find the actual contract anywhere on the D-207 website despite looking for it for the better part of 10 minutes – which, as we all know, is virtually an eternity on the Internet, and the hallmark of website-unfriendliness.  As we recall, however, D-64 didn’t post its current contract until a couple of months after it was approved by that Board, so D-207 can keep this new contract under wraps for a while yet without under-performing D-64.

The new contract reportedly is a five-year deal, the first year of which carries a flat 2% increase. After that the raises become tied to the CPI, although the H-A article doesn’t explain whether it will be a straight application of the CPI or a “CPI-plus” arrangement – kind of like commercial loans that have LIBOR-based interest rates with a basis point kicker; e.g., “LIBOR plus 300 basis points.”

But according to a Daily Herald article from 05.06.14, the CPI-based plan would produce increases from 1% to 3%, although that article doesn’t explain how that calculation will be done.

The Daily Herald article also reports that, under the new contract, a beginner D-207 teacher with a bachelor’s degree and no teaching experience will make $55,681, while a teacher with 30 years of experience and a master’s degree would be paid $132,635.  And let’s remember that’s for 8-9 months of actual work, so those salaries annualize to at least $74,241 and $176,847, respectively.

Compare that to the Park Ridge median household income of around $85,000 and you start to see what happened to the “middle class,” at least in Park Ridge: it became “upper class,” at the taxpayers’ expense.

Some brief additional research, however, has turned up at least one 40 year old “staff supervisor” with only 16 years of experience (all in D-207) making $139,000; drivers ed. teachers making between $121,000 and $149,000; librarians taking down between $100,000 and $130,000; and staff social workers and psychologists making between $116,000 and 165,000.  Not surprisingly, you can’t find any of THAT information on the D-207 website, either.

Ms. McGrath calls the new contract “fiscally conservative for our taxpayers.” In the words of the fictional Col. Sherman Potter on t.v.’s iconic “M*A*S*H*”: “Horse hockey!”

How many of you taxpayers are getting a 2% raise this year and a guaranteed four more years of CPI-based raises – without having to do one extra lick of work or otherwise improve your productivity? And that CPI-based increase is in addition to the traditional “step” increases teachers get simply for putting another year into the system.  Not surprisingly, nobody at D-207 is talking about what that adds up to annually.

But that’s still not all.

According to an article in the Park Ridge Journal (“New Dist. 207 Teacher Contract; $1,250 Merit Pay for ‘Excellent’ Instructors,” 05.08.14), teachers who earn an “excellent” rating in their annual review can pick up a $1,250 bonus.

We’re all for merit pay…just not on top of COLAs and step-increases.

And let’s not forget those outstanding Illinois constitutionally-guaranteed defined-benefit pensions that enable retired teachers and administrators to earn almost as much in retirement as they did for working – and which private sector workers would need 401(k)s in the $3-4 million range in order to match.

Given this largesse, we’d hate to see what Ms. McGrath and her fellow Board members who unanimously approved this contract – Sean Sullivan, Eric Leys, Mary Childers, Carla Owen, Jin Lee and Paula Besler – would consider “fiscally irresponsible.”

But we’d bet it involves even more bubble-wrap.

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