The pension and retirement law change in 2001 is a classic illustration of what we have all so willing allowed our elected officials to perpetrate upon us and thus we face another fiscal crisis. A Crisis which is still being ignored by our Legislature in order that they might win favors from their respective Party Leadership.
Why did the change of 2001 occur?
Primarily the belief that by incentivizing older teachers to retire they could then be replaced with younger, less costly staff. The approach had a twofold problem associated with. It did not fully take into account the substantial increases in salaries those younger teachers would gain over time and it didn’t appreciate how difficult it would be to replace key staff such as science, math and administrative personnel. Therefore, Districts found themselves in a position of paying top dollar for those key staff in order to attract them.
Another key factor in this pension crisis is that it was based again on the faulty projection of a never ending investment boom. We all know how that worked out because we relied on the unfettered free market system and our own collective ambitions.
Let me be perfectly clear, the Pension Crisis is currently the single most significant issue our legislators face today. They cannot continue to do what they have been doing since the mid 90’s, which is to kick the can down the road to the next group of legislatures, because failure to act now will lead to a major financial disaster in this area and state-wide by 2014!
In this area alone I would predict that a good number of school districts could find themselves distressed by 2014 without huge tax increases which in themselves may not be able to generate the necessary revenues given the Act 1 limitations and caps.
We are talking about a statewide calamity because when the state reduced its own required contribution levels, as well as those of school districts contribution levels, at various times by as much as 50-60% below the required amount necessary for the full funding of the Pension System, districts utilized those savings to offset present level expenditures instead of setting the funds aside for the rainy day they knew was coming. Thus everyone avoided the necessary and dreaded tax increases.
Everyone from the, Governor, Legislature, to the local School Boards at that particular moment in time were roundly applauded for not raising taxes. Well, as we all know now and should have realized then, at some point someone has to pay and now that day that rainy day is here!
The parallels are striking with what is transpiring on the national stage now relative to tax cuts and hopefully we will not allow ourselves to be sold another panacea this time! The Federal tax cuts of the 90’s did not do what they were purported to accomplish in then and there is no assurance that they will now!
Let me make clear up another myth now: Teachers have always and still do pay their share into the system. It is the State and Local School Districts that have NOT. Teachers, on the other hand, never received exemptions.
I like many others of my former Teacher and Administrator colleagues went into the profession because we loved what we did. It certainly was not for the pay which at the outset of my career was $3,800.00 annually. However, with the promise of a guaranteed retirement I could feel somewhat assured in the end. When I entered the profession no one really cared about my retirement plan. The $3,800 annual salary made the vast majority of full-time working teachers and administrators eligible for food stamps although very few ever took advantage of the program. My retirement was seen as an incentive to attract people into a poor paying profession at that time! In fact, some in our society considered it a joke to be a teacher because of the poor financial benefits.
Personally, I was in favor of many of Legislative acts and changes previously referred to in this and other writings and have contributed greatly to the increase in overall costs because we as a society could not continue to ignore those amongst who were less fortunate and thus not being served.
I am simply saying that I like many others were constantly permitting ourselves into being hood winked by “The Heartless Lions we elected to office” because we so desperately want to believe that there exists a free ride. As a nation or state just tell us the facts and the cost of a program you want to implement! Better yet, how about in this information technology and internet age, survey every registered taxpayer on that particular issue by asking the same two questions.
1. Do you really want or need this?
2. Do you want or need it bad enough to be willing to pay for it?
Unfortunately most Elected Officials and Pollsters today simply ask the first question and not the second. You get an entirely different set of responses when you ask both questions.
So again, who has to picks up the cost? Local taxpayers who were never really fully informed of the potential costs! Then those State-level elected officials go to Washington and repeat their voodoo programs at that level.
How much has the cost of Public Education gone up?
Well, it depends on how you look at the numbers! If you look at the cost of Regular Education alone the Sandia Labs study indicates the cost has risen pretty much in line with COLA rates. If, however, you look at the cost of Public Education from the perspective of mandated special programs the increase reaches over 330%.
Please understand clearly that I am not saying we should not be offering these types of programs. I am, however, saying we need to better understand, what the costs are up front and why the costs may greatly increase over time! As some districts have found, the per pupil expenditure cost of just one student with special needs can exceed millions of dollars.
I do, however, also believe that we must re-construct and pay entirely and pay for those programs : such as Vocational Education, Special Education, Bi-lingual Education, Transportation, Compulsory Education/ Attendance, Discipline and Alternative Education , Merit Pay, School Choice , Professional Development , School Calendar/Day and perhaps most importantly the tremendous cost burden litigation places on Schools today. We must simply keep in mind our responsibility: caveat emptor!
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