Indiana, PA - Indiana County

Letter to the Editor: Pension costs spiraling for school districts

on July 03, 2014 10:59 AM

Every year since the Legislature made a sneak attack in the darkness just before midnight and passed legislation to increase the legislators’ retirement pay by 50 percent, the school districts began to pay the price.

To help keep objections down by such an unseemly act, the lawmakers cut the largest lobbyist group in for a 25 percent increase — the Pennsylvania State Education Association (PSEA).

Whereas the retirement fund was once overfunded, it didn’t take long for the fund to become underfunded. Since school districts pay into the fund once per year from their budget based on a district’s total teacher salary times a state-mandated percentage divided by two — the state pays an equal amount for each district (more taxpayer money from a different pocket) — the yearly concern for school districts is the state-mandated percentage.

At one time before the midnight sneak attack, the percentage was in the 1 percent range.

When I was on the school board, the 2008-09 rate was 4.78 percent, then 8.22 percent, then 10.7 percent and I believe 2013-14 was in the 16-plus percent range. Next year is projected to be over 21 percent, and future figures are already predicting 30 percent and 35 percent.

Taxpayers cannot win. Future retirement obligations are growing faster than they can be paid for.

My immediate suggestions are:

1) Rescind the act that caused the sneak attack and the albatross.

2) Return the retirement figures to those that were warranted by the act.

3) Lower distributions to 25 percent of calculated sums for the school districts and 75 percent for the state. The state has many more possibilities for raising money than a school district, such as casinos, liquor stores, Marcellus natural gas fees, etc.

I suggest that if the school taxes you will soon receive are becoming a burden, wait for next year and the year after that if nothing is done to kill the albatross.

You must let your representatives know how you feel or risk putting an ever-larger sum into school taxes each year.

William S. Balint

Indiana

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