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School Officials Speak Out Against Proposed Shift in Pension Payments

A proposal by the state pension committee to shift the costs of teacher pensions from the state to local school districts could be "catastrophic" to districts 210 and 113A in Lemont, officials said.

Lemont school officials are speaking out against a proposal by Illinois legislators and Gov. Pat Quinn to shift the employer costs of teacher pensions from the state to local school districts.

The plan is expected to be part of a list of recommendations by the state pension committee this week to address Illinois' $83 billion unfunded pension liability—$44 billion of which is from the Teachers’ Retirement System (TRS).

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. 

By comparison, typical U.S. workers pay 6.2 percent of their pay into Social Security. TRS employees pay 1.45 percent into Medicare, as other U.S. workers do. The local school district then pays another portion of the pension contribution and the state pays its share. 

State legislators 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.

The move would save the state a reported $1.3 billion per year—but mean millions of dollars in costs for already cash-strapped districts, according to reports.

Officials in and have publicly expressed their opposition to the plan in recent weeks, claiming the shift would have devastating effects on the quality of education in Lemont.

Plan would cost District 210 approximately $730,000 each year, officials say

District 210 sent out a press release Monday detailing the proposed pension shift, and the “catastrophic effects” it would have on the high school’s annual budget and quality of education provided to students.

According to the release, taking on the responsibility of teacher pension payments would cost District 210 an estimated $730,000 annually. The cost is equivalent to the salaries and benefits of 11 teachers—or more than 10 percent of the school’s faculty—and represents more than 60 percent of the school’s annual budget for extracurricular activities and athletics, officials said.

"Lemont High School is in much better financial condition than most school districts, and this will have dramatic effects on our efforts to educate our students,” District 210 Superintendent Sandy Doebert said. “I can't imagine what districts that are not financially healthy will have to do. I also can't imagine what the state will do when school districts across the state cannot meet their financial responsibilities as a result of this unfunded mandate."

Doebert said she has been in contact with Sen. Christine Radogno (R-Lemont) and is in the process of reaching out to State Rep. Jim Durkin (R-Western Springs) regarding the district’s opposition to the plan. Lemont High School faculty members have also been encouraged to communicate with their own legislators, she said. 

District 210 in September 2011. However, the district has been in a position to cover the deficit using its reserve funds, which officials attributed to the school board's "longstanding practice of careful spending."

Last fall, District 210 administrators and school board members developed a plan that would allow for a balanced budget by the 2015-16 school year. The plan translates to approximately $1.2 million in cuts over the next three budget cycles. 

According to Doebert, the additional burden of pension payments would dismantle the work done by the administration and school board, and would likely require more drastic cuts.

"Having this additional unfunded mandate will completely undermine the steps we have taken to balance the district's budget,” she said. “It will result in reductions in personnel, programs and services, and impact our efforts to support student achievement ... Cuts would definitely have to be made in curricular and extra-curricular programs as well as in a number of faculty and staff."

Interim Superintendent: Pension shift would be “detrimental” to District 113A financial stability

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, according to Interim Superintendent Robert Madonia.

“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. 

“We needed to take a proactive approach and let the state know that we cannot afford to take on their pension liability,” Madonia said.

What's next

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.

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. 

"It is important to remember that Cook County is a tax-capped county," Doebert said. "Some school districts in other counties that are not capped may have the opportunity to increase their levy in order to seek new revenue to offset this new required expenditure. We would not be able to do that."

The majority of the revenue for both districts—roughly 80 percent—comes from local property taxes. Under the Property Tax Exemption Limitation Law—more commonly known as the tax cap—districts can only increase their tax rate by the lesser figure of five percent or the rate of inflation, as determined by the index.

"Without a referendum, our hands essentially are tied if we were to seek new revenue," 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."

Steven Daar April 17, 2012 at 04:51 AM
This could prove to be catastrophic for districts all across the state. Many districts already have trouble providing the full range of programs for students & this would be a huge cost passed to them by the state....let's hope it doesn't happen if you don't want to ever have to worry about the future of your Illinois pension benefits, read this letter: http://illinoisteacherretirement.com/save-your-illinois-retirement/
Bob April 17, 2012 at 01:10 PM
This is just another example of why Illinois is 50 out of 50 for the worst state to live in the USA. We have the Madigan machine and whatever Mike wants he gets. Why should our local gov. pay their bills, no one else does. Starting with O'Bama all the way down to state and local gov, "tax and spend". They must think that the people of this state are hoarding their money and if you tax them they will continue to pay and not say or do anything. It is time to do something. Don't just hope it doesn't happen like Steven wrote, do something. Write, call, walk into your legislators office and complain, scream, and fight for your right to not have to continue to pay more and more taxes. Lipinski, Durkin, Radogno , do something for us for once instead of your political careers.
Jorg Manteno April 17, 2012 at 02:09 PM
This pension reform would be devastating to SD113a. The district would have to cut another 1-2 million in their budget.
William Douglass April 17, 2012 at 02:42 PM
It is not pension reform if the state just passes the bill to someone else. I don't know why we call it that. Pension reform would be if Governor Quinn dealt directly with the state employee unions and agreed to a system that is reasonable and affordable. We all know that won't happen because Quinn and the Democrats that have run this state into the ground are beholden to the state employee unions.
Mary Van April 17, 2012 at 08:42 PM
Mr. Douglas....from previous articles, the local SD113a teachers' union just took a 0% increase in pay, but they still run this state into the ground. Remember, this pension legislation was written and voted on by the general assembly, not by the unions. Also, it was the general assembly who decided to take the payment to TRS, and put it elsewhere. This is certainly not the fault of unions. The teachers have been making their payments faithfully, along with the local school boards. This has been going on for decades regardless of the party that was heading the state.. Quinn and the Democrats have not even approached any of the unions for opinions, so PLEASE don't blame this on unions, not even close Mr. Douglas.
Mary Van April 17, 2012 at 08:43 PM
I need to clarify....previous articles stated that sd113a teachers took a 0% increase in pay, but you still think the unions run this state into the ground.
Robert K April 17, 2012 at 10:37 PM
Wasn't the purpose of the Illinois lottery intended to pay for school costs which would include pensions? Where is all that money being hidden/stolen?
William Douglass April 19, 2012 at 02:17 PM
The teachers are not the only unions in this state, but they are part of the problem. That said. The collective bargaining rights by public sector unions over the past decades (not just the 0% last year) combined with the conflict of interest between politicians via political donations from unions has led the entire state to this point. So, I will continue to blame this on the unions. The government is far to big, doing things that it should not be doing, with far too many unionized public sector employees, being paid too much for the jobs they are doing,
William Douglass April 19, 2012 at 02:23 PM
One last thing. You act like not getting a raise is such an unusual and tremendous sacrifice that no one else has ever had to make. To quote Bruce Willis, "Welcome to the party." If you think that you are alone in having your pension that you paid into in jeapordy and you pay frozen, then you need to talk to some other union members from the private sector. Start with the steel workers. When LTV and Bethlehem Steel went bankrupt, they lost their pensions.
William Douglass April 19, 2012 at 02:36 PM
I just sent a record amount of taxes to the state this year as did other taxpayers. The governor, state government and the state employees own this mess. They have collectively created this situation through the services they offer and the salaries they pay. They need get together and cut services, fire people, renegotiate contracts, and reform the pension system. Indiana, Wisconsin, and Ohio have all done it and they are recovering and running surpluses.
Ann Paul April 19, 2012 at 07:56 PM
I agree Mr. Douglass. I know people will hate me for saying this, but enough of many,many of these school districts (including 113A and 210) paying teachers' TRS contributions on their behalf. We in the private sector taxpayers are paying those pensions as well as social security. If anyone doubts me, read the teachers' contract. It is spelled out in there.
Mary Van April 19, 2012 at 08:58 PM
Dear Mr.Douglas and Ann Paul, Pat Quinn and Michael Madigan have not even approached the employees and the unions about this pension mess. What is happening in this: The money for the pensions is there, and has been there, however, it has been spent on other things. Now, instead of the state making the payments, they want the local school boards to make the entire payments. Now......the local school board and the teachers have faithfully put in their payments.....never missed one, IT WAS THE STATE THAT DID NOT MAKE THEIR PAYMENT, THEY HAD THE MONEY, BUT WAS SPENT IN OTHER AREAS, so the unions do not "own this mess".. Mr. Douglas.....113a and 210 have laid off people, eliminated services, renegotiated contracts (labor and otherwise), and the pension system in TRS was moved to a 2 Tier system, however, the state still are not making their payments, but spending the money on other things. TRS has been making great investments......their investments made them 24% last year, so they are being very good stewards of the money. So, Mr. Douglas, I'm surprised by your reaction. Please get some facts. Sincerely, Mary Van
William Douglass April 19, 2012 at 09:53 PM
Mary, I completely understand what you are saying, and I do not agree with Ann on these matters. I am against the state pushing this obligation down on the local school districts. I supported the referendum exactly because the problem with our school district finances rests at thie level, and it needs to be solved at this level.
William Douglass April 19, 2012 at 10:08 PM
I understand that the teachers have faithfully put in their payments. No argument there. They put into a pension and pay scale system that no private sector entity in their right mind would have ever negotiated. The taxpayers (aka ME) have also faithfully paid into the system and have just paid even more. There have also been many cases where private sector union members faithfully paid into their pensions as well only to lose them when there employer went BK which is why I referenced the steel workers. The question is simply this. Who owes who what? You paid in. I paid in. The state didn't. No one cared when the steel workers got screwed. The public sector unions as a group (I am not singling out Lemont Teachers) have opposed every single reform and have been fleecing the system for decades an everyone knows it. I am sorry for your situation, but it is not my responsibility to keep financing this fiasco.
William Douglass April 19, 2012 at 10:55 PM
There are 3 parties involved here. The governor, the legislature, and the employees. FIX IT. Cut programs, Fire people, and renegotiate the deal as any failing business would do. Unfortunately, you (not unlike other people) have a horrendously mismanaged employer. I am not saying that you share any more fault than the LTV steelworker. However, when you work for a horrendously mismangaged employer, bad things happen to your job and your retirement. You act like teachers are the only ones who have ever suffered an atrocity such as this. I am telling you that you aren't. I am not opposed to funding a way out of this mess, but not until there is some realistic compromise on public sector (in total) services, employment levels, pay scales, and pension reform.
Mary Van April 20, 2012 at 12:09 AM
Mr. Douglas, I think the problem here is that everyone sees the teachers' unions as the same as other unions, and actually, they are very different. They do work on reform, continually. They worked on the tenure reform act last year, and that passed with a lot of union approval. I'm a retired teacher, and I know many of the reform projects teachers' unions have been involved in.....from evaluation practices, curriculum improvements, to yes, pension reform. Pension reform is hard, as we all know. The picture that is being painted of teachers is so sad, it seems like everything that is wrong with any school finance from local to federal is always that teachers fault. But guess what, not a single teacher makes those decisions. The pension formulas that are used were not demanded by unions at all, but made in legislature committee and passed by politicians who couldn't even write a single lesson plan or know the difference between a verb and an adjective. Sometimes I think people who talk poorly of teachers were once told by the child's teacher that that child wasn't as gifted as they thought they were......yes, we get that on just about every child. I agree, it is not your situation to finance this "fiasco" as you call it, because you already do, the state it using it on other things and has never paid their I.O.U.. From what I understand, no talk about raising taxes was mentioned, just cutting teachers. I never taught in Lemont....Patch keeps me informed.
Mary Van April 20, 2012 at 12:21 AM
Again, I know 113 and 210 have cut programs, laid off people and renegotiated contracts. I don't act as if teachers are the only folks suffering, we all are, because of decisions made by politicians....question, how do you know who I worked for? Again, Mr. Douglas, services have been cut, employment levels scaled way back, pay scales lowered, insurance benefits rising, and pension reform should start with conversations of "this is what we are dealing with, now how can we fix it?"......just like teachers teach in the classroom....here is the problem, how can we solve it....but nope , we get "the state hasn't made a payment into TRS for years, but we put the money elsewhere, so now, your local boards have to pay for the mistakes we made"....again the unions didn't say that. Quinn did. I paid into social security, won't get that. My investments have tanked, my home value is $100,000 less than what it was a year ago, I pay more at the pump and at the store.....and I know everyone is feeling this, not just the teachers, but we are the selected group that you feel are evil. I have to ask you....do you know how to read? BTW.......the whole world felt the pain of the steelworkers, 4 people I knew lost their jobs, and ultimately their homes. So glad to see the work going to China, you know, that country that owns us now. Hmm....smart thinking on greedy corporate America, at least unions are considering the families of this country. So take your money and run, Mr. Douglas.
Jorg Manteno April 20, 2012 at 02:12 PM
Ms. Van and Mr. Douglass, you both have made some excellent points in your arguments. The State has not met their financial obligation and wants to 'once again' pass this burden onto local property owners. From what I have read, Mr. Douglass believes that the state needs to tighten their own belt, cut spending, and do pension reform-before placing this financial burden on the taxpayers. He has a point. Ms. Van is correct that the this is not the teacher's union fault or teachers, who have faithfully met their obligation. Unfortunately-it seems that the taxpayers and the teachers might be both the losers here and will have to pay for the States mistakes and mismanagement. Ann-obviously you haven't researched why the school board pays into TRS for the teachers. School districts often negotiate this in lieu of raises or step increases. If the teachers were to resume paying this percentage into TRS (which was negotiated in teacher's contracts), the district in all fairness, would have to increase their salaries that percentage, When the teachers retire (now making that 9.6% more), they would collect more in retirement. For school districts to negotiate paying into TRS instead of giving out that in raises is actually a huge saving to taxpayers down the road. Ann-so give up on your ridiculous argument-it is laughable.
William Douglass April 20, 2012 at 03:02 PM
Well said Jorg. I am so sick of hearing how greedy corporations and greedy rich people are the problem. They are not. I watch what has gone on in Wisconsin against governor Walker and it sickens me. Corporate America and business owners have the highest tax and employee benefit burden in the world. Combined with the new healthcare laws and unprecedented levels of harrassment, even more corporations are moving. I grew up in union towns my whole life. I can say this. Businesses do not want to leave. It is disruptive on almost every level. However, when faced with a production cost much higher than the competition in a Wallmart market when consumers always get the best price, businesses have 2 options. Move or Close. Our government is killing private enterprise.
William Douglass April 20, 2012 at 03:20 PM
So Mary, When faced with the option of running from this mess or losing my business, what do you think the rational choice is? I love how its never the recipient of the government check that is greedy. Families are working themselves into the ground and getting smashed with taxes, inflation, gas prices, and everything else, and as long as we have faceless corporations to nail to the cross, we don't have to deal with the reality of what we have let our government become.
Mary Van April 20, 2012 at 03:59 PM
Mr. Manteno......while I was employed, I had the opportunity to serve on two negotiating teams, and it truly was a learning experience, so I do have a bit of knowledge in that area, and understand why and how decisions are made. In our district, we paid our own TRS, and yes, the salaries were higher. So the way I look at it.....it was a "when would you like more money" type of attitude....now, or in retirement? Yes, you are so correct that both pension employees and taxpayers will suffer here, all because of poor decisions by the state. And the real hurt?.....that which will be placed on the students if teachers are cut.
Mary Van April 20, 2012 at 04:08 PM
Okay, once again Mr.Douglas.....most school districts are eliminating positions, renegotiating contracts, and trimming everything they possibly can. And again, the teachers were never asked to have input in the pension mess. What would a good solution be.....well, we will never agree on that.......but a start is to raise th retirement age by 2 years for active employees, and then raise it to 67 for new employees coming in (tier 2), but that will just delay the inevitable. I won't agree with cutting the pensions of those that are already retired, however, a new formula needs to be set in place for those retiring in the future, starting in year 2015. I do believe employee contributions can be higher. But that is not the talk in Springfield, the only talk is to give the entire mess to the local school boards, and I think we can all agree, is completely unfair. I am also getting smashed with taxes, inflation, gas prices, and everyting else. So you say unions are to blame, I have a tendencey to blame corporations, and really, it's probably both, because they both have eaten at the same table.

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