Buyout planned for Franklin teachers

As many as 20 experienced Franklin teachers will be retiring early at the end of this school year as a way to help the school district increase the base pay and be more competitive as it looks to hire new teachers in the years ahead.

Raising the pay in any other way was unlikely as the district was hampered by a 21 percent increase in health insurance premiums, which both taxpayers and employees paid for, and ongoing losses due to property tax caps. More money is not coming in due to more students, either, since enrollment has grown by only 77 students in the past 11 years, superintendent David Clendening and Jeff Mercer, executive director of finance, said.

Franklin schools have slipped in their place among peer schools in recent years in terms of how much first-year teachers are paid. Starting teachers are paid $35,919 this year, and that salary would increase to $36,500 next year and $37,000 in 2018 under the new plan.

The district would begin saving money by replacing the experienced teachers at the top of the pay scale with teachers with fewer years of experience, who are paid less. The savings are expected to be about $25,000 per retiree, Clendening said.

That money will be used in two ways. Half of it will go back into the rainy day fund to replenish the money used to pay the retirees their buyout money, and the other half will be used to increase the base pay, making the school district more competitive and more in line with other central Indiana schools’ pay scales, Clendening said.

Franklin doesn’t want to be the highest-paying district for new teachers, but has fallen too low, Clendening said. For example, a new Franklin teacher with no years of experience made $35,419 in 2016, which is several thousand dollars less than Clark-Pleasant, Clay, Center Grove, Seymour, Plainfield and Greenfield-Central schools, according to data collected by the school district.

“If you stay with us, we close the gap towards the top,” Clendening said, referring to the top of the teacher pay range for Franklin and its peer schools. “But we want to start higher.”

The plan is to replace all 20 teachers, depending on staffing needs, Clendening said.

The 20 teachers who will be taking part in the voluntary early retirement program have to be at least 56 years old. They’ll each be paid a buyout amount of $5,000 per year from ages 58 until age 65, when they become eligible for Medicare, Clendening said.

For example, a 58-year-old teacher who chooses to retire early will get $35,000 deposited into his or her medical retirement fund during the next seven years.

The teachers’ union and the school board have approved the plan. The 40 teachers who are eligible can begin submitting their requests, but the program will be capped at 20 people, Clendening said. The total cost to the district for the buyout is estimated to be $300,000 to $500,000, depending on how many and which teachers participate.

Franklin schools and their employees paid nearly $1 million more in 2016, compared to the previous year, in insurance premiums, and lost more than $3 million due to property tax caps. Half of those losses were in the general fund, which pays teachers’ salaries and other operating expenses.

By the numbers

2016 first-year teacher salaries for Franklin and its peer school districts:

Franklin: $35,419

Clark-Pleasant: $37,769

Clay Community: $37,000

Center Grove: $37,456

Greenwood: $33,955

North Lawrence: $32,520

Seymour: $39,852

Jennings County: $36,000

Middlebury: $34,827

Plainfield: $40,500

Mishawaka: $36,000

Greenfield-Central: $36,154

West Clark: $34,466

Concord: $34,606

Author photo
Michele Holtkamp is editor of the Daily Journal. She can be reached at mholtkamp@dailyjournal.net or 317-736-2774.