Teacher Negotiations, School District Expenditures, and Taxation Levels

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Abstract
Speculative literature on the topic of teacher collective bargaining has suggested that increased teacher compensation gains resulting from bargaining may require school officials to reduce expenditures in nonteacher compensation categories and/or expand the size of the operating budget in order to locate necessary funds to finance higher total teacher compensation costs. In order to examine the relationship between collective bargaining and school district expenditure patterns, an empirical study of the operating budgets of a total of 133 bargaining and non-bargaining districts in the State of Illinois was conducted. For purposes of examining the relationship between bargaining activity and expenditure levels under varying economic constraints, the sample was segmented on the basis of school district wealth. Data pertaining to total operating expenditures, teacher compensation costs, and eleven nonteacher expenditure categories of the budget were derived from the Annual Financial Reports of the school districts being analyzed. A regression approach was utilized to control for various economic and demographic variables that, in addition to collective bargaining, could affect expenditure levels. The results showed that collective bargaining is significantly related to higher expenditure levels per ADA for total teacher compensation in all three wealth groups. The speculated effect that bargaining is related to lower expenditures in nonteacher expenditure areas of the budget was also shown to be systematically related to district wealth. Further analysis indicated that collective bargaining is significantly related to higher school district taxation levels, thus suggesting that bargaining activity within a district exerts pressure on school officials to expand the size of the district's operating budget regardless of district wealth.

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