Teacher Pension Tax Shift – State Reps. Oppose, District 47 Board President Jeff Mason Seems Resigned to Extra Local Burden

As did the Northwest Herald’s Kevin Lyons

State Rep. Tom Morrison questioned panelists.

At last night Illinois Policy Institute forum on teacher pensions, one question from Northwest Herald News Editor Kevin Lyons had to do with House Minority Leader Tom Cross’ having characterized a shift in tax burden from the state taxpayer to the local property taxpayer.

Laying out the problems Policy Institute Spokeswoman Diane Rickert.

She explained that there was a $203 billion problem when promised health insurance was included. That’s $41,000 per household,” she said.

Diane Rickert

She pointed out that disconnecting the setting of pension levels from the payment for pensions was “an anomaly,” that most units of local government set pensions [by setting salaries] and, then, had to come up with the money to pay them.

She pointed specifically to the Illinois Municipal Retirement Fund (IMRF), to which most government workers who are not teachers, fire or police officers belong. [Police and fire pensions are also financed by real estate taxes.]

Several times during the meeting, Rickert argued that McHenry County taxpayers would continue to be subsidizing North Shore school districts that pay their teachers much more than teachers get paid in McHenry County, if the State taxpayer were forced to continue paying for teacher pensions. The argument seemed to have almost a class envy tinge. She said the Policy Institute favors an immediate shift of incidence.

“Doing it all at once would take 3 1/2 percent of the whole budget,” she estimated. She also gave two examples of a ten-year phase in:

  • Cary Grade School District 26 with a $34.5 million budget – $150,000 in year one
  • Woodstock Unit District 200 with a $98 million budget – $274,000 in the first year

“I’m pretty such some school superintendents get paid more than that,” she added.

Jeff Mason

District 47 Board President Jeff Mason answered in a manner that led me to believe that he thought a transfer of financial responsibility was inevitable. He referred to the

  • “The test you didn’t want to study for
  • “The leak in the roof you didn’t take care of”

Earlier, Mason had said, “We understand this expense is going to be shifted to the school district at some point. “Thirty years sounds reasonable,” he said with a chuckle. Then, five to seven years would give us a chance to ease the shock value to go forward.”

The Crystal Lake School Board President complained that there were “too many cooks–State and local.”

Mike Sayre

It the financing goes back to local schools, Mason said he thought “that’s where the rules should be set.”

“We need a permanent solution, not a Band-Aid solution.

“Just taking the accountability away from the State will not solve the problem,” Illinois Education Association Spokesman Mike Sayre, a Crystal Lake High School District teacher, added.

The IEA representative made the

  • “school boards would have to cut programs to kids,”
  • “doing things to affect kids”

argument several times, much to the vocal distaste of the man sitting next to me in the front row.

Don Bond opposed shifting the tax burden from the State to the local taxpayer.

There were two taxpayer questioners under the only two questions will be allowed policy, one from a teacher or retired teacher and one for everybody else at the forum.

Former School Superintendent Don Bond of Huntley grabbed the “teacher” spot.

He complained his tax bill had gone from $4,000 to $8,000 over the last twenty years.

He had a question, but his point was “Springfield made the mess. Don’t send it to the [property taxpayers]!”

“If you want to keep the problem in Springfield, expect that tax bill to climb and climb and climb,” Rickert replied after pointing out that the income tax had already been hiked 67%.

She pointed to the Huntley School Districts $82 million budget.

Over a ten-year period it would cost $735,000, she said. [I assume that is for the ten years, but my notes are unclear.]

Cary Grade School Board member asked if the State would end unfunded mandates if it pushed pension costs onto real estate taxpayers.

The non-teacher question was asked by Cary Grade School Board member Chris Jenner.

He asked if the legislature would going to shift new costs to school districts, would they take away

  • unfunded mandates,
  • the prevailing wage requirement that makes building cost 20-30% than for non-government projects
  • ineffective life safety code requirements

“The Illinois Education Association has no position,” Sayer answered.

“The onus should be on the politicians in Springfield to remove the onerous requirements,” the Illinois Policy Institute Spokeswoman said.

Mason argued that teachers should be provided with the opportunity to make decisions about their retirement.

The IEA’s Sayer entered the fray again explaining, “When I think of Cary District 26, I know a lot of teachers who have been forced to to teach music and physical education and that’s not what they trained for.

“All things we do for the Illinois Education Association is for the students first.”

The McHenry County College meeting was well-attended, as you can see from the photo below of the dispersing crowd.

The crowd after the one-hour meeting was over.

With two State Representatives in attendance, people took the opportunity to bend their ears.

Crystal Lake’s State Rep. Mike Tryon talked with local residents.

Palatine State Rep. Tom Morrison answered questions after the forum.

Also in attendance were two District 6 candidates for McHenry County Board,Democrat Jay Kadakia and Republican Mary McCann.

Jay Kadakia, former Huntley Village Trustee, gave Republican McHenry County Board opponent Mary McCann of rural Woodstock a piece of his campaign literature after the meeting.

Then I went home to write my first article on this event, which is entitled,

“IEA Spokesman Too Young To Know His Union’s Role in the Pension Crisis.”

 You can read it here.


Comments

Teacher Pension Tax Shift – State Reps. Oppose, District 47 Board President Jeff Mason Seems Resigned to Extra Local Burden — 6 Comments

  1. I think Jeff Mason ulitmately is correct, that the districts will end up with this responsibility.

    The problem, like most things in Illinois, is that the pension crisis is the result of political concoction after political concoction.

    It is not that I like it, but it is a reality.

    The GOP is too weak, in leadership and in numbers, to stave off this move.

    Stronger leadership, both locally and statewide, would attack this from a PR standpoint and let the citizens of Illinois know how much this would affect them.

    Other than lip service, the only place I’ve seen such an approach taken is by Cal in this blog.

    The state constitution assigns the state with the responsibility of funding education.

    Personnel costs are part of that.

  2. If the tax burden does shift then I would say that every school district sue the state to pay their portion of their liabilities now (all $80 billion or so).

    If the local school districts are to pay their own way going forward they should get to earn money on the investments of previous liabilities.

    At the very least this should go to court if passed.

    The state should not get off pushing the liabilities to local districts and move the $80 billion off their books and into ours.

  3. Why was Tryon there to talk about recyling bags.

    How a great job he did. me me me again

  4. “All things we do for the Illinois Education Association is for the students first.”
    -IEA’s Mike Sayer.

    Really?

    What about late starts and early dismissals, where teachers meet during learning time instead of before or after the school day?

    What about your comment “school boards would have to cut programs to kids.”

    There is another solution – freeze or cut teacher salaries, stipends, and benefits.

    What about requiring all teachers to put in 8 hours on the job?

    What about all the pension benefit increases enacted after the pension protection clause was added to the Illinois State Constitution in 1970 – pension benefit increases that the IEA supported – which diverts money from the education budget to providing more lucrative pensions to teachers, whom already had a perfectly reasonable pension.

  5. The State of Illinois destroyed every pension plan for which they enacted new legislation. They legally pulled off a Bernie Madoff ponzi scheme.

    – TRS (Teachers Retirement System)
    – SERS (State Employees Retirement System)
    – SURS (State University Retirement System)
    – GARS (General Assembly Retirement System)
    – JRS (Judicial Retirement System)
    – Police*
    – Fire*

    *Yes, the state sets rules for police and fire pensions, which are then administered by local police and fire boards.

  6. Shifting the Employer Contribution from State to School District should occur after fixing the Contribution itself. The Contribution has been juiced a number of different ways.

    The biggest problem with State pensions are pension boosting laws (benefit increase legislation) created AFTER the pension protection clause was added to the Illinois State Constitution at the Constitutional Convention in 1970. For FORTY years from 1971 – 2011 lawmakers exchanged pension hiking legislation for campaign contributions and votes from public sector unions.

    Bill Zettler discusses in detail in his book Illinois Pension Scam.

    Another big problem, as revealed by Cal, is IEA and IFT teacher union lobbyists for many years advocated during the annual State budgeting process to shift funding from the Pension fund to the General State Aid (GSA) for Education fund. GSA for Education is distributed to local school districts.

    The largest expense of a local school district is teacher and administrator payroll.

    This resulted in an even larger unfunded liability creating the need for even larger employer contributions.

    Another big problem is the pensions should be defined contribution not defined benefit.

    In summary. Problems with State pensions.

    1. Benefit levels were increased.

    2. Union lobbyists advocated during the State budgeting process to divert the State “on behalf of the employer” pension contribution and instead use the money to increase teacher and administrator salaries by increasing GSA for Education.

    3. The pensions are defined benefit not defined contribution.

    A secondary problem is the State not Local School District is making the Employer Contribution.

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