Mar 9, 2017 - Uncategorized    1 Comment

Pensions: Why school taxes don’t go toward teaching kids

A large and growing percentage of school budgets support retired teachers and administrators, doing nothing for current and future students.

A significant amount of the money you pay in school taxes goes not to educate children but to pay people who don’t teach anymore.

Overly generous pensions are eating up school (and, to a lesser degree, municipal) budgets.

For instance, the average Capital Region teacher who retired last year with at least 30 years of service will be receiving a pension of more than $60,000 a year for the rest of their life. Not to mention health coverage.

The pensions were reported recently by the Times Union with numbers provided by independent think tank and fiscal watchdog Empire Center, which won a Freedom of Information lawsuit against the state Teachers Retirement System. The retirement system didn’t want the public to see what it’s paying for. (Go ahead and peek at the Empire Center’s database at seethroughny.net.)

Good teachers are worth their weight in gold. But that’s not the point.

Even someone as math-challenged as I can see that saddling citizens with the cost of these pensions doesn’t add up.

An increasing portion of school budgets goes to support pensions and health benefits. Over the years, some changes have sought to reduce this growth, such as extending the required years of service and bumping up teachers’ contributions to their health coverage. But the benefits are still out of whack.

In May, citizens across the state will be presented with their school districts’ annual budgets. Administrations and their school boards will keep spending increases under the 2 percent state tax cap, and thus under the public radar. They will shrug off the disproportionate benefits as “contractual obligations” out of their control.

Yet they’re the ones who approve the contracts.

Board of Education members all around the state – fortified by taxpayers – must find the gumption to say to the unions, “Enough!”

 

1 Comment

  • Hey Barb, I get it, but there’s more to this than meets the eye. First, the ECR, set by the NYST retirement system is out of the control of school boards and teacher unions. They cannot negotiate it. The rate is determined by growth of the fund where invested (mostly stocks.) This rate does not just grow exponentially, it fluctuates year to year. In fact, it was in single digits for 22 years prior to 2011-12. See chart below:
    https://www.nystrs.org/Employers/Administrative-Bulletins/2016-Bulletins/bull2016-2

    Secondly, too often people believe that school districts pay 100% of the pension of their retired teachers. Teachers have always paid into the retirement fund. The rate to which they are required to pay continues to go up. New Tier 6 teachers will pay upwards of 6% of their salary and can’t retire until they are 63 so they will be paying in longer. That personal investment along with investments from the $109 billion fund and the local district funded ECR pays a teacher’s pension. Also, the mostly women membered fund (67%) actually only pays an average maximum benefit of about $40,000.

    I read an interesting piece from the National Institute on Retirement Security (NIRS). They say the expenditure from NYS state and local pensions support more than 270,000 jobs that pay some $17 billion in wages and salary. They also support $7.4 billion in federal, state and local revenues with a total economic output of $44.3 billion. NIRS estimates that every dollar paid in NYS pensions generate $1.70 total economic activity. Clearly a good investment.

    Sorry to rant a bit … I’m a little sensitive to the issue, even in my own home 🙂

    Finally, I loved teaching and miss it, but the job has changed. What is keeping young people from going into the profession? A lot. On top of strenuous requirements, illogical evaluations and non-age appropriate curriculums we have become the scapegoats of politicians, policymakers and know-it-all foundations who have never set foot in a classroom. (And now DeVos!!! Holy shit.) It is no wonder the teacher shortage crisis is here. There is currently an 8% all around attrition rate. 17-20% of new teachers don’t make it 5 years. Enrollment in SUNY education programs are down 43% in the last five years. And now communities are encouraged to mess with our pension? Ugh. One of the few (remaining) redeeming benefits of sticking it out for 32 years is that pension. And, health care is not always covered. It is determined by contracts of local districts for retirees. With my district, (BHBL) my cost of health care for my family is about $9000 out of pocket (it will be less for a 2-person contract).

    OK … I think I’m done. Ha! Again, I get it. Educating our young is an expensive proposition. But, as my husband often says – “if you pay peanuts, you get monkeys.”

    Later 🙂
    Nancy Ingersoll

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