Interim Superintendent: Proposed Pension Shift Could Cost District 113A $735K Annually

A proposal by the state pension committee to shift the employer costs of teacher pensions from the state to local school districts could cost  as much as $735,000 each year, according to Interim Superintendent Robert Madonia.

Last month, District 113A board members directed administrators to analyze the potential impact of the proposal, which has been floated by legislators as a way to address Illinois' $83 billion unfunded pension liability—$44 billion of which is from the Teachers’ Retirement System (TRS).

The state has to come up with $5.1 billion for pensions next year, according to reports.

TRS pension covers certified employees including teachers, administrators, social workers and counselors. Currently, a TRS employee pays 9.4 percent of his or her salary into the pension system. The local school district then pays another portion of the pension contribution and the state pays its share. 

State legislators and Gov. Pat Quinn are proposing that the portion that would typically be paid by the state become the responsibility of local school districts and in turn, that of local taxpayers.

During Tuesday night's board meeting, Madonia said he worked with District 113A Business Manager Barbara Germany to assess the district's current payroll and what it would cost to take on the state's share of pension liabilities.

The $735,000 figure is slightly more than what was projected by . In a press release last month, District 210 officials said the shift would cost about $730,000 annually, which is equivalent to the salaries and benefits of 11 teachers and represents more than 60 percent of the school’s annual budget for extracurricular activities and athletics.

"Obviously this is a liability that no school district can assume during these challenging times," Madonia said during a school board meeting Tuesday night.

Since being certified in financial difficulty by the state in December 2009, District 113A has cut approximately $4 million from its budget through reductions in staff, transportation services and programs, as well as the closing of Central School. 

Although the district is projected to be off the state’s financial watch list by June 30, 2013, the proposed pension plan “would completely negate” the progress made over the past three years, Madonia said last month.

“If this plan were to pass, it would be detrimental not only for schools in Lemont, but for almost all schools across the state,” he said. “District 113A and many other school districts have already made dramatic cuts. We simply cannot afford this; it would destroy public education.”

During their March 20 business meeting, District 113A board members adopted a resolution to formally oppose the proposed changes to TRS funding in Illinois. Madonia said the resolution was adopted by multiple school districts, and sent to state legislators. 

With the May 31 budget deadline looming in Springfield, District 210 and District 113A—along with school districts across the state—are doing their best to raise awareness about Quinn's proposal.

"Essentially, Illinois lawmakers are preparing to make up for a 40-year failure of meeting legally required financial obligations, which they themselves established, by shifting that responsibility to local school districts, but will keep those districts' hands tied by requiring that they pay the bill without any new revenue source to pay for it," District 210 officials said in a statement last month.

If legislators were to adopt the plan, school districts would begin seeing the effects immediately. Without any new sources for revenue, the burden would likely fall on the taxpayers to maintain the level of education in Lemont, officials said. 

"Without a referendum, our hands essentially are tied if we were to seek new revenue," District 210 Superintendent Sandra Doebert said. "In the meantime, students will suffer the consequences of the legislators' actions. Students will be the ones who have fewer classes from which they can choose and fewer extra-curricular opportunities to sharpen their skills and explore their talents."

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