School districts are being socked with a 29 percent increase in their pension costs this school year.
The increase means schools will pay 11.11 percent of their payroll toward retirement costs in 2012, up from 8.62 percent in the prior school year, which ended June 30, the teachers’ retirement system announced this week. It’s the first double-digit rate in 22 years….
School officials said growing pension costs were equal to the total increase in school spending this year, up about 1.3 percent. The increase caused homeowners’ tax levies to grow on average about 3.4 percent this year.
This is not new information - I learned about this last spring when we voted on school budgets. In my local school district, taxpayer-funded pension costs will increase about 37% over last year’s, representing more than 50% of the total budget increase. Pension/health/salary costs went up, while the total of all other school expenditures had to be cut as a way to keep the total budget increase to a manageable 3.9% that translates into an estimated 7% tax levy increase.
The pension expense comes as schools in July 2012 will have to abide by a property-tax cap. The cap will limit tax increases to 2 percent a year or the rate of inflation, whichever is lower….
Pension costs are expected to grow further. In a memo to schools this month, the New York State Teachers’ Retirement System said it expects next year’s costs to exceed this year’s rate. It won’t have those estimates until November….
The Empire Center For New York State Policy, a conservative think tank, estimated in a report last year that taxpayer-funded contributions to the teachers’ retirement system will more than quadruple over the next five years. The group estimated pension costs for state and local government workers would more than double over the same period.
“It’s something everybody has to get ready for,” said E.J. McMahon, the group’s senior fellow.
School boards should provide taxpayers with longer-term budget projections
Mahon questioned why the teachers’ retirement system doesn’t provide districts with long-term outlooks on pension costs.
“You have districts that are negotiating contracts for three or four years, so why not tell them?” McMahon said.
Cardillo said they give districts about 18 months’ notice and can’t project rates further because economic conditions could change.
Multi-year projections are the norm in the business sector, for good reason. Most taxpayers understand that ”economic conditions could change” and deserve to have this type of critical information when voting on budget issues. Chappaqua Central School District is one that does a good job offering five-year budget projections.
Also, New York urgently needs to rein in its “skyrocketing” public employee pension costs.
Related: Passing the pension time bomb in New York State
You can read the entire LoHud.com article, which received 119 comments from readers, after the jump.
read more »
Like this:
Be the first to like this post.