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The School Board says it can't afford automatic increases; the union suggests a tax hike.

The comments by School Board members during Tuesday's budget workshop were not fighting words, really. More like negotiating words.

But the local teachers' union leader says the group has no intention of talking about forgoing automatic pay increases for teachers until the board exhausts its options on both sides of the ledger to balance the budget.

The so-called step increases are built into the contract and are given each year to reward teachers for accumulated experience. For the upcoming budget year, the increases will cost the district about $1.7 million.

"You can't come to us and say we're in dire straits and you need us to forgo our (raises) when you're not even taking every option to generate the revenue," said Joe Vitalo, president of the Hernando Classroom Teachers Association. "It's kind of insulting."

Vitalo referred to the board's refusal to levy the so-called critical needs millage, which would increase the tax rate by 25 cents for every $1,000 worth of property value. The levy, which requires a supermajority vote of the five-member board, would raise about $2.2 million for the district and would cut the estimated $5.8 million deficit by more than a third.

But it would also require board members - three of whom face re-election bids this year - to make a tough decision for the benefit of the district, Vitalo said.

Superintendent Bryan Blavatt asked the board during Tuesday's workshop to give him direction on what parts of the operating fund are sacred and what should be considered for possible cuts.

Core classroom positions are untouchable, the board agreed. But two board members said it might be time to consider the step increases as a place to find savings.

"Steps automatic no matter what? I'm not sure we can continue to do that," Sandra Nicholson said.

"The union needs to understand that there are certain things we're not going to be able to do this year," chairman Pat Fagan said. "If it takes doing away with step this year, we're going to have to do it."

The district already broached the subject of forgoing the step this year, said Heather Martin, executive director of business services. After discussing the issue with Blavatt, Martin asked union leaders during a June 7 negotiation meeting to put the step increase on hold for a year. The step would not be removed from the contract.

"That was not well-received," Martin said.

Under state law, the district could declare "financial urgency" to modify the teacher contract to deny the step increase. But that is a lengthy process that typically goes to impasse and requires a mediator to look at the budget to determine if there is in fact a financial emergency.

"I don't think we're at that point," she said.

The mediator would consider whether the district had exercised all of its fiscal options, such as levying the critical needs quarter mill and ending courtesy busing for students who live within 2 miles of school, Martin said.

In Tuesday's workshop, board members repeated their opposition to the quarter mill. They have, however, shown some willingness to put the issue on the November ballot in November. Voters could approve the quarter mill for next budget year and the following year.

The levy would add $25 to the tax bill of a $125,000 home with a $25,000 homestead exemption. But the state sets most of the school tax rate, and at this point the preliminary rate of 7.316 mills, or a tax bill of $731.60 for the example home above, is lower than last year's rate of 7.479 mills, or $747.90.

The state could increase the millage rate because property values came in so much lower than projected, chief financial officer Desiree Henegar has said. But if the preliminary millage rate holds and the board did add the critical needs millage, the tax bill for the example home would increase by $8.70.

"That's basically what it would cost to go to lunch at McDonald's," Blavatt said Wednesday. He has recommended that the board go forward with the additional levy.

Asked about Vitalo's reasoning that the quarter-mill levy should come before the union considers forgoing the step increase, Blavatt replied, "I think he's probably got some credibility there."

"But at some point do we have to come back to the union in lieu of cutting positions?" he said. "At what point do you decide as a union that giving up your increase means people keeping their jobs? I'm very, very hopeful that we don't get to that. I've been there in other districts and it's awful. The last thing you want to do is get into people's livelihoods, especially when they're the frontline people."

If the teachers' union wanted to voluntarily forgo the step increase this year, it would have to notify the district by the end of July, Martin said. The Hernando United School Workers, which represents non-instructional employees, is set to receive its step increase starting July 1 at a cost of $415,000.

Hernando has struggled for years to claw its way up from near the bottom of the 67 districts in terms of teacher salaries, Vitalo said. Teachers got an average 2.39 percent raise in 2008. Last year, the district was ranked at No. 53, with an average salary of $41,795.

The step would mean an average pay increase of 1.9 percent, if that, for the district's roughly 1,700 teachers, Vitalo said. Employees helped absorb a 14.5 health insurance premium increase last year, and the district is bracing for another hike this year, he said. In many families, teachers represent the sole income.

"We haven't been slouching," Vitalo said. "Scores are going up. The only thing you can give us to show respect is our steps."

Tony Marrero can be reached at (352) 848-1431 or