By Steve Gunn

MINNEAPOLIS – Across the nation, public school districts are struggling to balance their budgets while maintaining quality programs for students.

That’s the case in Minneapolis, where the district laid off employees last year to help overcome a $20 million budget shortfall, and plans to spend about $20 million from its fund reserve this year to meet rising costs.

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Despite the financial challenges, the school district has continued to spend millions of dollars every year on extra labor costs, mandated by negotiated collective bargaining agreements with the Minneapolis Federation of Teachers. Many average taxpayers aren’t aware of these expenses.

We inspected a copy of the recently expired teachers union contract in Minneapolis, then used a public records request to learn the amount of money spent on various provisions of the agreement. We focused on money spent during the 2010-11 fiscal year, the last completed year on the books.

The information we gathered is summarized in the second report of our continuing series, “Sucking the Life Out of America’s Public Schools: The Expense of Teachers Union Contracts.” The first report, released last week, focused on the Milwaukee school district. Subsequent reports will look at labor costs in other major urban school districts around the nation.

In Minneapolis, we learned the school district spent $5.6 million on automatic annual “step” raises for teachers, even while laying others off. The district spent $24.2 million on health insurance for employees covered by the teacher contract, while employees only kicked in $3.3 million.

Other questionable expenditures included $7.6 million for retiree health insurance premium reimbursements, $3.3 million for “extra assignment pay,” nearly $1 million in contributions to employees’ tax-deferred savings accounts, and $883,865 for retirement severance payments.

The district even spent $89,000 on gifts for teachers who achieved tenure. There are more interesting dollar figures in the short, easy-to-read report.

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“Given the current financial situation in the district, taxpayers might ask themselves if all of these expenses are necessary, particularly during an era of layoffs and rising costs,” said Kyle Olson, publisher of

“At the very least, we think it’s important that the public start to learn more about the high cost of collective bargaining in public schools, and how unnecessary labor costs can siphon crucial dollars that could be spent more directly on students.”