Updated Dec 15, 7:00 PM; Posted Dec 15, 7:00 AM
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The jelly-of-the-month club was for discouraged Clark Griswold. For growing number of Alabama teachers this month, an unexpected extra $500 to $1,000 bonus is being greeted with Christmas season joy.
Thirty-one years since “National Lampoon’s Christmas Vacation” put the concept of the Christmas bonus into the mainstream, the coronavirus is kicking it up a notch: Instead of the corporate boardroom, the latest round of holiday bonuses are being dished out by elected school boards throughout Alabama.
These new bonuses are not actually being called a “bonus.” Instead, the extra pay is called “extraordinary compensation” for teachers, staff, and administrators at public schools. The additional compensation is considered a token of appreciation toward the school workers who have spent the past eight months juggling virtual and in-person education during the coronavirus pandemic.
“The last eight months have been very difficult for all of us,” said Ryan Hollingsworth, executive director with the School Superintendents of Alabama. “During this time, we have seen a great appreciation for the tremendous job our teachers do with our students each day. They have gone way beyond what they would do in a normal school year.”
The year-end bonuses are a rarity for school districts, which are not accustomed to dishing out added compensation for teachers at year’s end. Some have benefitted more than others – Baldwin County Schools, the state’s third largest school district, endorsed a $1,000 per employee bonus on December 8. The Boaz City School is the only other district in the state with a similar $1,000 bonus.
The tally continues to growth as schools dip into their General Funds to provide an early Christmas gift to employees. Large county school systems like Jefferson and Montgomery County school districts have endorsed $500 bonuses to employees. Smaller city districts, such as Gulf Shores and Vestavia Hills, have done so as well.
The bonuses are not being paid for directly by the Coronavirus Aid, Relief and Economic Security (CARES) Act, which was endorsed by Congress last spring and has provided millions of dollars in funding to schools for technology upgrades and new computers to accommodate increasing digital learning. But the addition of the federal CARES Act money has allowed some schools to free up local tax money to provide the one-time bonuses, according to some school officials, even if they say the money is coming from their General Funds.
In Boaz, Superintendent Todd Haynie said the school’s 306 employees received the extra compensation through a build-up of local reserves. Haynie said the reserves represent about 3-1/2 months’ worth of normal operating procedures, and that the school system located in Marshall County was in a strong enough position to offer the extra compensation even without the extra CARES Act money.
“We value the hard work and dedication that all the members in our organization have displayed during this unprecedented time,” Haynie said.
In Baldwin County, a boost in sales tax revenues helped spark the one-time COVID-19 compensation to approximately 4,000 employees, costing an estimated $4.2 million.
Superintendent Eddie Tyler, in a statement to AL.com last week, thanked the taxpayers for supporting the system, “not just in taxes paid but also in the tens of thousands of volunteer hours and donations” given to the district’s schools.
“The supplement we gave to our teachers for the incredible effort they are showing throughout this COVID pandemic is a direct result of your generosity and support of our system,” Tyler said.
The bonus provided in Baldwin County is particularly noticeable given the district’s high-profile struggles, about five years ago, to boost property taxes to pay for school construction projects. But in recent years the district has been able to stabilize its revenue streams while rolling out a comprehensive building program without having to request a tax increase from voters.
“It shows the health of our system,” Tyler said during the school board meeting. “This will make someone’s Christmas.”
Most other school districts offering a year-end bonus are providing a $500 one-time supplement. The 884 employees at Vestavia Hills City School System got a one-time $400 bump. School officials spent $380,651 out of an annual $81 million budget for the extra compensation.
Some of the other districts in the state in which employees got a bonus:
*All full-time active employees within the Jefferson County School District – the state’s second-largest school system – will get a one-time $500 supplement. The total cost will be $2.2 million. The employees will not receive the extra compensation until mid-January.
*Montgomery County Schools will give 3,300 employees a $500 supplement, which will be paid for through the General Fund. The total cost is estimated at $1.8 million.
*In the state’s wealthiest community — Mountain Brook — 671 full-time workers will get a $500 bonus before Christmas. The payments will cost the district $363,891 and will be financed through excess General Fund money.
*The Homewood school board voted last month to provide an extra $500 to all employees, which will cost approximately $300,000. The money also comes from local revenues.
*In Huntsville, the city school system is considering a $500 bonus that will be paid to more than 2,000 employees and would cost about $1.4 million. More information about the bonus will likely be revealed this week, according to school spokesman Craig Williams.
* According to media reports, additional pay is going to employees at Autauga County Schools ($500 per employee), Albertville City Schools ($400 per employee) and Elmore County Schools ($200 for full-time employees, $110 to part-time workers).
*Gulf Shores city schools authorized a $500 payment to full-time employees and $250 to part-time workers. Said Superintendent Matt Akin, “our teachers and staff members are the heart and soul of Gulf Shores City Schools. The tremendous progress that has been made during the last year and a half is due to their hard work and dedication to our students and community.”
The extra pay to school employees comes at a time when the coronavirus pandemic is leading to a surge in holiday bonus payouts to large companies like Amazon, Walmart and Target. Amazon, for instance, is providing $500 to frontline employees, bringing its total spent on special bonuses and incentives to its global teams to over $2.5 billion in 2020.
Michael Ford, associate professor in the Department of Management at the University of Alabama, said that the holiday bonuses have been ‘trending downward in their prevalence” in the overall economy in recent years as companies move more toward incentive-based bonuses that are based more on performance metrics.
Ford said that that bonuses, however, are much less common in the public sector.
“It’s an unusual thing,” he said.
Jim Barth, the Lowder Eminent Scholar of Finance at Auburn University, said the holiday bonus is more of a compensation tool utilized by the private sector as a way to provide extra compensation to employees when the economy is strong or the business is doing well. He said that Auburn University, in lieu of pay raises, opted to give its employees a one-time $1,500 bonus. He said the bonus, unlike the pay raise, is a one-time adjustment for an institution and does not require additional payouts for retirement-related costs.
“Most people would prefer a salary increase with a bonus, but if they have to choose between the two, they will choose the salary increase,” said Barth. “At Auburn, the salary increase goes into retirement. If you get a bonus, it does not raise your retirement benefits. To get no salary increase, but then to get a bonus is a way (for an institution) to compensate people and say, ‘look, this has been a rough year for everyone. People have died. They have friends or relatives who have died because of the virus.’”
He added, “You want to reward people who have done a good job. But it’s difficult for people to do a good job with the virus. People have been locked up for too long. I think everyone who runs a company and a school district or who runs an university is trying to say, ‘How can we show our appreciation (to employees) for working under an extremely unusual situation?’ A bonus is a way to do that.”
Will the bonuses return ahead of Christmas in 2021?
Ford said he’s not sure.
“It’s such an usual year that it’s hard to predict what will stick,” he said. “They do make employees feel valued and they make employees feel that they make a difference and improves the employee-employer relationship. But with that said, it’s hard to tell what (companies) will do going forward.”
Barth said the height of the bonuses occurred decades ago – in the 1980s, or around the same time that Chevy Chase’s Clark Griswold character in Christmas Vacation anticipated a large enough bonus to purchase a new swimming pool, only to later find out that his company was providing memberships into the jelly-of-the-month club.
Barth said there are simply more workers, and a more diverse population, than there was in the 80s and 90s when the Christmas bonuses were more popular.
“You don’t want to necessarily tie a bonus to one religion or to one time of the year,” Barth said.
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