The amount Minnesota school districts spend on teacher salaries and benefits outpaced the rate of inflation between 2003 and 2014, with the largest growth recorded in the cost of pensions and health care.
A Star Tribune analysis of compensation data showed that teachers' take-home pay has declined an average of 2 percent statewide after adjusting for inflation. But the cost of benefits such as health care and pensions, paid by districts, has risen 29 percent above the rate of inflation during that same period.
The trend, revealed in data from the Minnesota Department of Education, comes at a critical juncture in budget negotiations at the Capitol. Senate DFLers and Gov. Mark Dayton are pushing for more funding for schools to stave off cuts to teaching staff and programming. About 80 percent of what the state spends on education goes to teaching salaries and benefits.
In the fiscal year 2014 school districts paid $5.6 billion in total compensation to teaching staff. That's up about $600 million from 2003, the inflation-adjusted data show. Benefits make up about a third of total compensation packages. Some districts have attempted to tamp down escalating health care costs, but officials say benefit costs continue to eat up a larger share of school budgets.
"We believe it's manageable, but this is not something that's happened overnight," said Tim Alexander, assistant superintendent for human resources at Minnetonka Public Schools. "I don't see it as something correcting itself overnight either."
School districts say that much of the growth in retirement spending stems from legislative changes in 2010 that required both teachers and school districts to contribute more toward pensions — a decision over which districts say they had little control.
But it's been health care costs that have delivered the real hike. They make up the largest component of benefits and grew 32 percent over the rate of inflation between 2003 and 2014.
"As long as those costs continue to rise, we're going to continue to see those types of increases in our expenses on an annual basis, whether it's to the school districts themselves or the employees," said Gary Lee, director of management services for the Minnesota School Boards Association (MSBA).