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* As we’ve already discussed, the state government pays about $2 billion a year into the suburban and Downstate teacher pension fund on behalf of school district employers. Gov. Pat Quinn, House Speaker Michael Madigan and Senate President John Cullerton have all expressed varying degrees of interest in making local districts pick up more of the tab. Doing so would, of course, free up money to be spent on overdue bills or whatever.
There are some who say that local school districts already pick up the tab, but that’s because the teachers’ unions have negotiated away the employee share in contract talks. The “real” employer share is still being picked up by the state. Also, Chicago’s teacher pension fund gets some state money, but nothing like TRS.
The major argument against the idea is that local property taxes would rise and/or school budgets would have to be slashed to make those pension payments.
* The Question: Do you think that local school districts should be picking up a portion of the employer pension contribution, and if so how much? Take the poll and then explain your answer in comments, please. Thanks.
posted by Rich Miller
Friday, Feb 3, 12 @ 12:02 pm
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The school districts outside of Chicago should pay for their teachers pensions in the same manner that Chicago does. It is very hard to make the argument as to why the state should pick up this cost since the school districts hire and determine salaries upon which the pensions are based.
It doesn’t matter what they have to do in order to come up with the money.
Comment by Cassiopeia Friday, Feb 3, 12 @ 12:13 pm
I voted for a 50-50 split. However, that comes with the caveat that the school districts be able to tax for their contribution in the same way they tax for IMRF and Social Security.
50-50 because the schools districts decide the pay and that impacts the ultimate benefit, but the state determines the structure of the retirement program which determines how much must be paid in. Both sides’ decisions impact the amount that must be paid in.
Comment by Pot calling kettle Friday, Feb 3, 12 @ 12:15 pm
Local districts are the employers. Therefore, they should pay the employer share.
Comment by Lakeview Friday, Feb 3, 12 @ 12:17 pm
I voted no. The state already pays too little towards education. Adding this expense to poor districts will hurt them even more. (Does anyone know if the amount the state pays towards teacher pensions is included in the overall amount the state pays for public education?)
Comment by RWP Friday, Feb 3, 12 @ 12:19 pm
I would say the state should have an amount they will pay per teacher for retirement. Then if because the district has high salaries, which increases the employer share, they pay the difference. If it is a percentage, schools like New Trier would get a whole lot more than down state schools. (Even though they currently do).
Comment by Anonymous Friday, Feb 3, 12 @ 12:21 pm
Part of me thinks it shouldn’t be as much as a % as a hard deck. That is the first x of every teacher is picked up by the state then the district gets the rest.
Comment by OneMan Friday, Feb 3, 12 @ 12:28 pm
I voted no. Property taxes are already contributing significantly to home foreclosures and the likely increase in property taxes to fund school pensions will exacerbate the problem.
Also, I oppose federal, state and local government employees operating under a different, better and more secure retirement system than most private sector workers, who are funding government retirements with ever increasing taxes. I oppose any move to shore up gov systems until there is parity and fairness in the system.
For those of you gov employees who proclaim “a deal is a deal,” please consult all private sector employees who were stripped of their pensions by the government in bankruptcy court.
Stripping down taxpayers even further is not the answer to government retirement system’s unsustainability. It’s time for pervasive change. And penalizing home owners with increases in a regressive property tax is not the answer.
Comment by Cook County Commoner Friday, Feb 3, 12 @ 12:36 pm
No because the state does not fund suburban districts like it funds Chicago. In some of the moderate districts, the State funds less than 25 percent of the budget
Comment by Plutocrat03 Friday, Feb 3, 12 @ 12:38 pm
So Cook County Commoner would you ignore the state constitution?
Also keep in mind most of these teachers do not qualify for social security (unlike those who have pensions reduced in the private sector)..
Comment by OneMan Friday, Feb 3, 12 @ 12:43 pm
i’m with cassiopeia (i live in districts that would be effected)…
Comment by bored now Friday, Feb 3, 12 @ 12:45 pm
Depends on how much of the school revenue is state funds and how much is local. Break the share based on that percentage. No matter what happens, property taxes will rise and the complaints will come. The entire issue is a previous good solution (why else would they have done it so long ago that even MJM claims to not remember why) has been caught up by time, compounding costs, poor payments, and simply letting a problem get out of hand.
Comment by zatoichi Friday, Feb 3, 12 @ 12:46 pm
I voted over 80+ . I’ve negotiated teacher union contracts for school boards and they regularly gave away items they knew would elevate pensions, figuring it wasn’t costing them anything. The guy who orders the meal should pay for it.
But Cook County Commoner’s idea that, because the private sector screwed all of its wage-earners out of their pensions (note - the high level managers were spared in that bloodletting), that the public sector employees should get screwed over by the rest of us. That’s perverse. How about we do something to buck up private sector pensions through changes in federal pension and tax laws?
Comment by Anonymous Friday, Feb 3, 12 @ 12:51 pm
Lakeview got it right. If the pension has an employee share and an employer share…the employee should pay the employee share and the employer should pay the employer share.
I think a different issue is what should those shares be…5% employee and 95% employer? 10/90? 15/85? 20/80?
I would also suggest that the impact, in my opinion, of local property taxes on foreclosures is neglible. My school district tax bill rising $100 per month won’t cause me to miss a mortgage payment. Just my opinion…
Comment by Mongo Friday, Feb 3, 12 @ 12:55 pm
I voted no because the pension funds have to come from somewhere - the citizens pockets. If the responsibility for the funds is shifted, then the tax revenues the state currently receives should decrease to reflect that change. If that is what will happen then a smooth transition could take place. Some who post here say there is a problem due to tax caps that would have to be addressed.
It just seems like a shifting around of funds - how does that help us taxpayers in the end?
Comment by dupage dan Friday, Feb 3, 12 @ 12:56 pm
I absolutely believe that the only justification for so many layers of government is so that both taxation and the spending of resultant revenues can happen at the lowest, and therefore most accountable, level. Local school districts do the hiring and firing and negotiate labor contracts, so to be accountable they need to pay a substantial share of the costs, including pensions if they are given a say in what those pension benefits are to be. I would have to add that I have friends who have retired from teaching with pensions that are almost unimaginable and far, far better than what is offered to rank and file state employees of comparable qualifications, salary and service. In most cases they tell me that their pension is actually higher than their working salaries, and these are persons in their mid-50s. These types of deals only happened because local officials were negotiating with someone else’s money. If you don’t like the idea of having to pay these costs locally, then perhaps all negotiations with teachers’ unions regrding pension benefits should be taken out of local hands entirely and turned over to the State, if the State is going to be asked to pay the bill anyway.
Comment by Skirmisher Friday, Feb 3, 12 @ 12:57 pm
I voted no for the following reasons.
It was the GA that put us in this mess in the first place. They used the money that was supposed to go in the funds for “whatever” instead of paying the pension payments.
Then they passed a law that said the payments had to be included in the budget. But they got cute and didn’t appropriate it, but appropriated a like amount for “whatever”.
Now they want the populace to allow them to abdicate their responsibility for paying the pension so they can use that money for “whatever”.
But now they are willing to let that same populace pay the bill themselves through local taxes. Again a cute little trick to make someone else raise taxes to pay the bill.
And do you really think they will use the money to pay old bills and fix the fiscal mess? It’s the lottery all over again. Pass the buck to someone else and give me the extra money I have pork projects to fund.
The bill should go to who controls the program. If the state wants to free itself of the bills then they should give up the mandates. If they are not going to pay for transportation then turn over total control of who gets bussed to the local district.
If they want the local district to pay the pensions then allow the local district to decide who they need on their staff. Eliminates all mandates for staffing. Maybe the district doesn’t want an aide for every child that might require it. Or maybe they don’t want to be held to the ridiculous parts of NCLB. I know some of this is federal but the same thought applies. You mandate it, you pay for it.
Comment by Irish Friday, Feb 3, 12 @ 12:58 pm
I should have added I understand the concerns re the schools handing out perks they didn’t have to worry about directly. That can be dealth with by some rules changes, I suppose. I worry the state would shed the responsibility without giving up the revenue. A type of unfunded mandate, if you will.
Comment by dupage dan Friday, Feb 3, 12 @ 12:58 pm
All this would do is increase the disparity between the wealthy suburban idstricts (e.g. New Trier) and the poor urban/suburban/rural districts.
If income inequality is the great sin alleged by so many these days - then there should be a uniform statewide teacher salary structure - which would then generate a unform statewide pension burden.
Comment by titan Friday, Feb 3, 12 @ 12:59 pm
The state has no hand in setting or negotiating salaries. No reason the state should be paying the pension for salaries they do not negotiate, particularly for the Napervilles, Stevenesvilles, Lincolnshires etc. with 100,00 plus salaries.
Make everyone contribute at the same prorated amount as Chicago.
Chicago taxpaying districts handle this tax burden, no reason others should not. A lower percentage of Chicagoans use their public schools than Illinois residents statewide use their public schools, yet they pay for CPS pensions, how is that equitable?
Comment by Anon Friday, Feb 3, 12 @ 1:00 pm
School Districts used to bump up administrators & teachers pay before retirement as an incentive and it was my understanding that the state (TRS) was left with the bill for their lifetime. School districts have responsibility for some of this mess. They passed the buck to IL taxpayers.
Comment by Top of the State Friday, Feb 3, 12 @ 1:02 pm
I vote for 100%. The only way this State financial situation is going to get resolved is for expenses and costs to be fairly assigned. In this case, if TSR funding for pensions is for local school districts, well, than that’s who needs to foot the bill.
That’s how you get to fiscal accountability in both state and local governments. And in any case, we’re going to get there sooner, rather than later if GASB has their way.
So we better plan on facing the TSR funding issue now, before it gets crammed down our throats. It’s going to mean pain for taxpayers, school districts, and teachers, but at least we’ll be facing financial reality for once.
Comment by Judgment Day Friday, Feb 3, 12 @ 1:07 pm
Rich, I’m glad you gave more nuanced options for this poll. Sometimes the choices you give are too black and white.
Comment by Just Observing Friday, Feb 3, 12 @ 1:09 pm
School districts outside of Chicago should be raised to Chicago’s contribution rate. That rate increase should be phased in over a period that we should have reasonable negotiations and public discussions about.
Then BOTH should be raised to 100%.
At the same time, the state should use that money to start to fully fund the school-funding formula at the EFAB recommended rate.
Maybe a wash for school funding as a whole, but it does provide greater transparency and accountability.
While we’re at it, we should get rid of the Hold Harmless for suburban school districts and means-test special education aid.
We should not be wasting our precious state dollars propping up school districts that have seen a drop in enrollment…its a disincentive to consolidate.
Nor should we be providing aid to school districts like Wheaton to provide special education that those districts can EASILY afford on their own.
Comment by Yellow Dog Democrat Friday, Feb 3, 12 @ 1:10 pm
NO! Unless there is an offsetting reduction in Income Tax. Yeah, fat chance that. I live in Palatine CCSD-15 and the State portion (taxpayers through the state income tax) of the teacher pension fund contribution in round figures is $16,000,000. If this is shifted to the district property taxes would jump 12% to cover the cost.
I’m guessing most districts would face the same burden. It’s just a back door tax increase on top of the “temporary” income tax bump we just experienced.
Comment by Joe Heater Friday, Feb 3, 12 @ 1:13 pm
This is a tax increase by the Quinn government. Pass the expenses to the local district so they can increase property taxes to pay for it (and take the blame) and the State gets to spend the savings on past bills that they cant seam to pay on their own even though they passed a large increase already. Tax & spend. Just like my favorite part of the State of the State, lets not address the outragous cost of collage, lets just tax more to give the students bigger grants.
Comment by Downstater Friday, Feb 3, 12 @ 1:18 pm
My answer is no. Now why is it that we never hear about why they added to the Constitution in 1970 that 9ensions are a contracts and cannot be reduced or impaired. Where are the notes from the Constitutional Convention with the discussion behind it. I asked state legislatures why they added it to the Constitution and they don’t know or will not research it.
The speaker now makes speeches about not knowing why people thought the state would pay pensions but he is the only man who was at the Constitutional Convention in 1970 who is still in the state legislature and he doesn’t say a word about why that clause on pensions was placed into the Constitution.
We are not dumb. I feel it is like Casablanca where the police was shocked that gambling was going on and then gets the money he bets. The speaker pays state money into the system (from time to time) then is shocked that people think the state should help pay for pensions.
Comment by Union Friday, Feb 3, 12 @ 1:18 pm
Though I don’t live in Chicago, I recognize the inequity of making City residents pay for most of their teachers’ pensions as well as paying state taxes to help pay for downstate teacher pensions.
If downstate districts had to pick up more of the cost than the current .054% contribution, they would be more careful about pay raises, especially the end-of-career sweeteners. That’s because they couldn’t pass the whole pension bill to the state.
Given how little funding the state provides for public education — the lowest percentage in the nation — it would merely aggravate existing funding inequality, which is also among the nation’s widest between rich and poor districts.
In sum, I see both sides. An incremental increase to, say 1 or 2% would be feasible.
Comment by reformer Friday, Feb 3, 12 @ 1:18 pm
I voted for 21-40%.
As “anonymous 1251″ noted, school boards now have no skin in the pension game therefore they do little to resolve the problem. If they now have to pay a share, they’ll be far more careful when they negotiate their contracts.
For example, see how the 6% cap on end of career annual raises put a stop to the exorbitant pay hikes many administrators and some teachers got because the schools had to pick up the extra pension cost of those pay hikes. The same thing will happen with matters that raise pension costs.
Even though implementing the local pension share may help the state pay other bills, it is still a good government idea that should be enacted.
Comment by anon sequitor Friday, Feb 3, 12 @ 1:27 pm
Cass has it right. If Chicago pays for their teacher pensions locally, the so should the rest of the state. Period.
Comment by PublicServant Friday, Feb 3, 12 @ 1:33 pm
The school districs have passed the buck to the state and that should stop.
Comment by palatine Friday, Feb 3, 12 @ 1:48 pm
No. The State Board of Ed should set uniform education policies statewide. It’s not uncommon for one government to pay fringe benefits on behalf of another employer/government. If funding is changed it will simply be a transfer that may cause more problems than it saves.
Comment by Soccertease Friday, Feb 3, 12 @ 1:53 pm
Constitution bottom line…
ARTICLE X
EDUCATION
SECTION 1. GOAL - FREE SCHOOLS
A fundamental goal of the People of the State is the educational development of all persons to the limits of their capacities.
The State shall provide for an efficient system of high quality public educational institutions and services.
Education in public schools through the secondary level shall be free. There may be such other free education as the General Assembly provides by law.
The State has the primary responsibility for financing the system of public education.
(Source: Illinois Constitution.)
Comment by Griz Friday, Feb 3, 12 @ 2:10 pm
No.
Not all school districts were giving exorbitant raises that inflated pensions payouts. Many downstate districts couldn’t do that if they wanted to. My small district would have been up in arms if the Board ever agreed to such high raises.
Also correct me if I’m wrong but are the Chicago benefits set by Chicago while the downstate are set by the General Assembly? Since CPS set their benefits they have responsibility but downstate districts have zero control over the benefits or the fact that the big pensions payments now are due to the irresponsible behavior of the General Assembly.
Small districts have made the hard calls on salary and the benefits we control and the State has avoided the issue and now wants to hand the problem over to us.
Comment by Hoping for Rational Thought Friday, Feb 3, 12 @ 2:23 pm
It is certainly something that should be looked at. There is a very legitimate point about why should the funding of the pension be different for a teacher in Chicago versus one in the suburbs or down state? If we are going by the idea of local control school district, then they should bare at least share of the responsibility too.
Comment by RMWStanford Friday, Feb 3, 12 @ 2:40 pm
Should we pay from our right pocket or our left pocket?
Comment by Jake From Elwood Friday, Feb 3, 12 @ 2:40 pm
Each district should have some skin in the game.
Comment by mokenavince Friday, Feb 3, 12 @ 2:43 pm
I think they should eventually. There is a good point that they should have a vested interest in keeping pension costs down. Right now there is too much “early retirement options” in government were they encourage people to retire and therefore go on the pension payroll so they can be replaced at a lower salary. While this might help with the government’s books, the problem is you’re now paying a salary for two people, just one is through a pension and not considered payroll.
I vote for 20% for now, but it needs to be phased in over 10 years (2% a year) and it needs to be part of a debt restructuring plan where schools get paid on a 30 day payment cycle. We can’t be pushing more funding costs on local governments while making our payments 6 months late.
Comment by Ahoy Friday, Feb 3, 12 @ 2:53 pm
Jake, you said it much better (read shorter) than I did. It’s a shell game, really. And the players (read GA) are gonna stick it to us taxpayers (read the played).
If those in Chicago are covering their own pension and paying into a state coffer they can’t tap into that is unfair. Who thought up this cr@##y system?
Comment by dupage dan Friday, Feb 3, 12 @ 3:04 pm
I vote for 80% or higher. This should also include the Teachers / Adminsitrators being required to pay a share also. If property owners feel that their property taxes are being raised too much then they have the School Board Members to hold accountable. This should also make many small districts look harder at something they have been avoiding, but know is coming. Consolidation.
Keep the School Boards that negotiate the contractsaccountable, and they will have to figure out how to pay the bill for what they sign.
Comment by So IL M Friday, Feb 3, 12 @ 3:05 pm
The teachers and Administrators should pick up a larger share of their personal retirement.
Comment by Larry Mullholland Friday, Feb 3, 12 @ 3:17 pm
The State has contributed to TRS since 1939. Yes, it’s probably wise to pass some pension costs to local districts so they “have some skin in the game” when it comes to setting salaries impacting pensions. (Now their costs are only 0.58%.) However, my community already pays 93% of the cost of education. The State pays only 6% (and that includes the TRS costs the State pays on behalf of our teachers). Would the Legislature expand the Tax Cap to allow the school district to pay for these new costs to them? Will the Legislature cut its budget because they won’t need to spend these dollars, or will they just spend it some other way? Is there an expectation that the local districts will cut their budgets now to absorb these new costs? Or, are we just taking money out of another taxpayer pocket, thus increasing taxes? Is the Legislature trying to pass the blame for higher taxes downstream?
Comment by soupperk Friday, Feb 3, 12 @ 3:23 pm
I think it’s possible that Districts should pay the normal cost, under the following conditions. I think the State should put into their funding base the current normal cost. Districts then would own increased normal costs in the future.
Comment by steve schnorf Friday, Feb 3, 12 @ 3:29 pm
Steve Schnorf, succinctly put - the voice of reason.
Comment by dupage dan Friday, Feb 3, 12 @ 3:34 pm
Am I the only one who noticed that this discussion centers around what is best for adults and doesn’t center around what is best for the children?
Comment by john brown Friday, Feb 3, 12 @ 3:36 pm
It’s important to keep all school funding in perspective. Springfield not only controls the pension design/funding but also the complex formula for distributing income taxes to school districts.
Illinois reduces school funding for “property rich” districts. Following are some examples of Illinois state funding per student for FY2010:
- State-wide average except Chicago: $2,730
- Chicago: $4,201
- Springfield SD 186: $3,535
- Palatine CCSD 15: $1,596 (northwest suburban Cook County where I’m a school board member)
- New Trier Twp HSD 203: $639
Non-Chicago districts often have significantly higher property tax rates in part to make up for less funding from the state.
Comment by Scott Herr Friday, Feb 3, 12 @ 3:39 pm
Steve, would the state be doing that for Chicago too?
Comment by PublicServant Friday, Feb 3, 12 @ 3:43 pm
===Steve, would the state be doing that for Chicago too? ===
lol
Good question.
Comment by Rich Miller Friday, Feb 3, 12 @ 3:50 pm
No problem Griz. Now let’s get the CPS on the same footing as the rest of the State. I’ll be looking forward to the reduction in my Chicago property tax bill.
Comment by Original Rambler Friday, Feb 3, 12 @ 3:53 pm
OR, Chicago property tax rates are so low compared to the rest of the state it’s almost a joke.
Comment by steve schnorf Friday, Feb 3, 12 @ 4:01 pm
That’s why there’s the state equalizer. Maybe we could develop one for school pension contributions!?!
Comment by Original Rambler Friday, Feb 3, 12 @ 4:28 pm