Negotiating The AEA Teachers' Contract – The Dollars Should Make Sense

Some of Amherst's peer school systems consistently outperform us in academic outcomes and cost efficiency, thereby providing higher educational value for the taxes levied (see the companion article in this issue entitled, "Are SAU39 Students Getting Our Money's Worth?).  One way they achieve cost efficiency is through managing teacher compensation and benefits. As the Amherst School Board (ASD) renegotiates the Amherst Educators Association (AEA) K-8 teachers' contract this summer, they should better balance teacher compensation with the property tax burden on residents.

In 2025, Amherst property taxes funded $15.2 million in net town and county government expenses and $43.2 million in net education expenses for ASD, Souhegan, and state education costs combined. Amherst's total property tax commitment for municipal government and schools was $58.4 million: 26% government and 74% schools. Statewide, NH communities average 63-66% for school costs, so Amherst's school share is notably higher than that.

The ASD K-8 budget is the largest of all budgets in town. In 2025, it consumed $31.8 million at a cost-per-pupil of almost $25,000 per year. (Note: annual tuition and fees at UNH are just over $21,000.) 

The single most expensive ongoing contract anywhere in town is the AEA teachers' contract, which is part of the ASD budget. In 2025, ASD spent over $25 million of its $31.8 million on people-related costs of which 70% is driven by the AEA teachers' contract alone.

If we have any hope of reining in these unsustainable and growing costs, changes will have to be reflected in the proposed AEA contract that will come before the voters in March 2027.

Layers of Costs

Four major categories stipulated in the teachers' contract drive the largest costs:

1.      Salary ranges and schedules,

2.      Health and dental insurance,

3.      Retirement and longevity incentives,

4.      Performance evaluations and rehiring practices.

Two other personnel-related factors that also drive costs include: staffing levels based on enrollment projections, and rising SAU39 administrative costs (allocated proportionally to the school districts). While these two items are not in the AEA contract, decisions made about them impact contract costs and thus the tax obligations of residents.

Once approved by the voters, all amendments to the teachers' contract become perpetual financial obligations for residents. That means those costs must be built into ensuing ASD default and operating budgets thereby perpetuating those obligations unless they are changed through negotiations between the union and school board.

The AEA contract stipulates that: 

“This Agreement shall not be changed or altered unless the change or alteration has been agreed to and evidenced in writing by the parties hereto.”

So, for changes or rollbacks to occur, both the ASD board and the teachers' union must agree, otherwise the obligations remain in place.

Article 2.2 of the AEA agreement stipulates that,

“The term 'teacher' is defined as all regularly salaried classroom teachers, librarians, speech therapists, occupational therapists, school psychologists, guidance counselors and nurses. Unless otherwise indicated, the employees in the above unit will be hereinafter referred to as 'teachers'."

This means that everyone serving in any of those capacities is covered under the AEA agreement, and their salary schedules, professional development costs, medical coverage, sick leave, and retirement are driven by the terms of the agreement.

Salary Ranges and Schedules

The AEA salary schedule specifies how much a teacher's salary will increase annually based on their degree credentials and years of teaching.

ASD starting salaries for entry-level teachers (BA degree) rank around the middle of all comparable districts.

But ASD salaries at the upper end of the scale rank among the highest of comparable districts.

Also, the distribution of ASD teacher pay is skewed to the high end, with most teachers being paid at or near the top of their salary schedules. This adds measurably to overall costs.

Teachers also get a cost-of-living increase (COLA) each year. Neither the annual step increase nor the COLA is tied to student performance. These annual increases also raise the costs of benefits as well as mandated federal and state employee expenses such as FICA, Medicare, Unemployment Insurance, Workman's Compensation, and retirement obligations borne by the town.

Health and Dental Insurance

Healthcare costs are another significant driver of expenditures within the school budget. The current teachers' contract offers a choice of several medical and health insurance plans. Of the most common ones, taxpayers cover anywhere from 80.5% to 91.5% of premiums. As for dental insurance, the contract stipulates that between 80 and 100% of various premiums will be covered. That also falls to taxpayers.

Retirement and Longevity Incentives

Most school districts offer some sort of incentive to retain top veteran staff through longevity bonuses. Many of these incentives take the form of one or more payouts when an employee reaches a specific number of years of service. A significant portion of these expenditures are outlined in Article 14 of the AEA agreement. 

Under article 14.4, a one-time salary payment for retiring teachers will be made in the amount of 1/189 of the teacher’s final year’s salary (including longevity) for each year of full-time equivalent employment in the Amherst School District. For example, a retiring teacher with 20 years of service will receive a payment of $8,466. That teacher will also receive an additional payment of $3,000 over the first two years of retirement.

For employees vested in the New Hampshire Retirement System before January 1, 2012 or for employees who elect section 14.5{8)-1, the Board agrees to contribute an amount equal to 15% of a teacher's contribution to a payroll deducted tax sheltered annuity not to exceed $500.

Also, a percentage of the retiring teacher's final salary will be added to the teacher’s regular salary. For teachers with up to the equivalent of 25 years of full-time teaching, the sum of 50% of the retiring teacher's final salary will be added. Teachers with more than the equivalent of 25 years of full-time teaching in Amherst will get an additional 2% for every year of teaching experience up to a maximum of seventy percent (70%).

Here are a couple examples of how these layers of benefits impact financial obligations for Amherst taxpayers.

Article 14.5 offers teachers several options, including matching contributions to 403(b) or 457 plan accounts and health insurance credits. While intended to reduce total payouts over time, these options are also costly.

The contract also provides for taxpayers to fund up to $40,000 of medical coverage per retiree over the first four years of their retirement.

All these benefits have slowed the likely rate of retirement, because teachers who might want to retire may continue to stay in their positions while they slowly move up in line for one of the retirement slots that trigger these payouts each year. This disincentive to retire slows the normal rate of teacher turnover and delays replacement by newer teachers earlier on the salary scale.

Performance Evaluations and Rehiring Practices

Many aspects of compensation in the teachers' contract are based on longevity, not on educational outcomes achieved by the students served. As part of a growth model for staff, a comprehensive performance evaluation system that also accounts for student performance would be highly desirable. 

Stipulations in the CBA governing layoffs are also focused on longevity. Layoffs follow reverse seniority: the most recently hired teachers are let go first, and the longest-serving teachers are recalled first.

Enrollment Projections and SAU Administrative Costs

Across the country, state, and region, student enrollment has been on a long-term decline. However, ASD uses New England School Development Council’s (NESDEC) enrollment projections, which tend to predict a dramatic increase in future enrollment based on their projection of Amherst births. Their assumptions exceed actual birth data, actual school enrollment trends, and are counter to census, town, state and national predictions, thus leading to unrealistically high enrollment projections – and related staffing requirements – compared to what's happening on the ground. This chart shows the resulting incongruities between student enrollment and staffing levels.

Inflated enrollment projections create two problems. First, they can lead to hiring or retaining more teachers than enrollment requires. Given ASD's high teacher compensation package, each additional position beyond actual need adds considerably to short- and long-term tax obligations.

Second, inflated enrollment projections also inflate capacity and design calculations for classrooms and other school space. Currently, inflated enrollment projections for a reconfigured Wilkins Schools are driving a design that could exceed more realistic enrollment projections by 16% to 27%.

SAU39 Brick School administrative costs have also grown significantly. These costs are allocated proportionally across SAU39 districts. ASD – with the largest student enrollment –bears the largest share, which again is borne by the taxpayers.

The current AEA contract drives a tax burden on residents that is unsustainable. The only meaningful way to rein in spending within ASD is to tackle the many layers of cost embedded in the contract.

For years, the AEA union has brought labor attorneys to contract negotiations, while ASD Board members have not. This imbalance in negotiating resources may explain why the current CBA favors teachers over taxpayers.

The two ASD Board members charged with renegotiating the contract this summer should be well equipped with the information needed to understand the key cost drivers and the implications of any changes to those categories. Ideally, the full ASD Board, working with a labor attorney, will approach negotiations strategically to better balance the interests of teachers and taxpayers.