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We’re Gonna Need a Bigger Boat

12 Jul

In all of our talk about closing schools, redistricting, and saving money, we have gotten stuck on the teachers union, the Kingston Teachers Federation.  We somehow feel the need to vilify…someone, anyone, for our problems.  The taxpayer blames the teacher, the teacher blames the parent, the parent blames the school board, and the board blames the state.  So it goes.

The problems never go away, but we get to feel better, just by knowing who to blame.  Just like Billy Pilgrim, though, if we don’t take action, events push us around, and we land where we land.

Back in June, on this blog, I put forth some suggestions on how to save money in the school budget. While these points were not new, even to my thinking, I thought it valuable to throw them into the mix, as no one from the Kingston School District had even mentioned them in passing in the year-and-a-half since I first presented them in a public budget forum.  The Superintendent, the School Board, members and officers of the Kingston Teachers Federation, parents, the press, and just plain folks from Kingston were there.  We are all in the same listing boat, so I called for participation from everyone in the School district to right it.  Since the KTF members share in the largest part of salaries and benefits paid, my guess is they felt under attack.  The post, “Schooling Blood from a Stone”, is a little further down.

I say now, let’s stop zeroing in on the teachers, and start looking at the bigger picture.  It was never my intent to focus ire on the teachers or their unions. Because I was speaking locally, about a particular news item, I tried to find areas where we could save programs, jobs, and tax money in a narrowing field of options.  I’ve been thinking too small.  Why do we have to contain this to the school district?  We need to save the services, jobs, and money here in Kingston, in Ulster County, and in New York State.

In discussion on that post, I’ve learned that most of these items can be controlled locally, by negotiation of contracts.  Management, unions, and support staff are all included.  What I’ve also learned is that these pensions are set and controlled by the State Legislature and the Governor.  We have no say , locally, over the process

I am now proposing the same fixes for all state, county, and city/town employees.  Everyone from the smallest schools’ clerical staffer, right on up to every elected official through Governor.  Everyone is eligible, and no one is exempt from the rules.

The biggest positive immediate budget impact we can make locally is in health insurance.  We can do this locally, saving over $5,000,000 annually  We could make everyone eligible.  From what I’ve learned in discussion on salaries, I would add two tiers to the table.  Those making less than $30,000 would be paying 5%, and those from $30,001 to $50,000 come in at 10%

For pensions, again, I would continue pension contracts as agreed for people eligible before the effective date of the law, but begin moving new hires and elections after that date to a 403(b) plan.  Right now, the state has TIAA/CREF for SUNY employees and faculty, so the framework and working structure are already in place.  An employee contributes as much as he or she wants to the plan, and the State or City or School district contributes a matching amount, up to 10% if the employee’s base pay.  Lulus, overtime, bonuses, and other add-ons are not included in the match.

Both the retirement and health insurance contributions (as well as the employer match) are pre-tax dollars, so the employee will see an income tax benefit from both plans.

Some will say that the State pension system is healthy and whole and needs no adjustment.  Even New York’s State Comptroller Thomas DiNapoli, the man who runs it, says so in this video:

Listen closely.  DiNapoli, while saying the pension system is perfect the way it is, concedes that market lows, like the ones we’ve been experiencing for these last few years, have hurt the pension fund.  The solution to that, he says, is to require more money from the taxpayers of New York to bolster the system and keep paying out at the same rate.  This, at a time when we can least afford it, seems absolutely wrong-headed to me.  It is unsustainable to require higher tax payments from a shrinking base while the payments to more pensioners grow.

Governor Cuomo sees that the system will outgrow our ability to pay for it, good times or bad, in the fairly near future.  You can see his February proposal here: http://www.governor.ny.gov/press/06082011PensionReformLegislation  The high points are these:

  • Raising the retirement age from 62 to 65
  • Ending early retirement
  • Requiring employees to contribute six percent of their salary for the duration of their career
  • Providing a 1.67 percent annual pension multiplier
  • Vesting after 12 years instead of 10 years
  • Excluding overtime from final average salary
  • Using a five-year final average salary calculation with an 8 percent anti-spiking cap
  • Excluding wages above the Governor’s salary of $179,000 from the final average salary calculation
  • Eliminating lump sum payouts for unused vacation leave from the final average salary calculation
  • Prohibiting the use of unused sick leave for additional service credit at retirement

The reform of the state pension system would impact new hires by the state and local governments, including school districts. The City pension reform plan would cover new employees of New York City, including the uniformed services.

You can see that his suggestion is to reform the pensions system.  Mine is to slowly do away with it.  Both require employee contribution.

I’d like to point out that I’ve published three different points of view here; four, if you count the status quo.  All are valid, but none, individually or in combination, will work without some action soon.  You have to decide.

Whatever the reforms or changes, we cannot exempt elected officials and their staffs from the regulations.  That would show poor leadership, and a failure to acknowledge that we all must do something.  We all have to take part in the solution.  Make your voice heard.  Please call and write your legislators on the school boards, in City Hall, the County Seat, and in Albany.  Thank them for their time and work, and let your Superintendent, County Executive, representative, and Governor know what you want.

It’s a big fish we have to catch.

Andrew Champ-Doran

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2 Comments

Posted by on July 12, 2012 in Uncategorized

 

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2 responses to “We’re Gonna Need a Bigger Boat

  1. Mike Heany

    July 13, 2012 at 6:24 am

    Is our concern with the merits of the system or the economics of the system? Do we look to justify or villify one over the other? Do we hear the same outcries for reform when our economy is thriving? When Wall St. decides to gamble with the world’s economy, and fails, why are teachers singled out for reform? Why are other taxpayer-funded pension systems not given the same public outrage? Do any of these previous questions matter since the system is unsustainable? Teacher’s schedules become a violent fuel to the public ire.

    I do not believe the teachers will surrender what they believe is an entitled part of their employment. They will fight (as they have the right) to maintain status quo. As to the economics, their battle cry is simply to change the way schools are funded.

    The pension system that I believe to be fair (for all) is the ’employee contibutions matched by the employer’. It is employee-driven, not employer-granted.

    Locally, the consolidation of the schools, the closing of one of the hospitals, and the large annual deficit of Golden Hill, after a year of corruption uncovered in the police and fire departments, has many of the public in outrage I have never seen. I may even go so far as to say some are in a mild state of shock. I know people who have left the area/state and people who are considering same. Do you see the same in your circle?

    Thanks for posting, Andrew
    Hope all is well

    Mike

     
  2. Mike Heany

    July 14, 2012 at 4:50 pm

    Regarding the mild shock I mentioned, the voltage was just turned up (Comptroller’s report on the Kingston Police Department).

     

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