Skip to comments.Report: Pension costs eat up education funding, and teacher pay stagnates
Posted on 05/24/2020 8:47:00 AM PDT by edwinland
Any growth in state education spending over the past five years is being eaten up by greater teacher retiree system costs, according to a new report from the Citizens Research Council of Michigan.
Since 2012, school districts have had to return per-pupil funds to the state to cover unfunded liabilities in the Michigan Public School Employee Retirement System (MPSERS). According to current projections, those liabilities wont be paid off until 2038.
According to the Citizens Research Council, that required contribution has eaten up the modest 12% increase in state per-pupil spending since 2013. And thats reflected in average teacher pay, which has been stagnant at around $62,000 a year since 2008.
You can use that [state] money to pay the liabilities, or to pay for current costs, but you cant use it for both things, said CRC President Eric Lupher. The pensions are getting the money, and that means theres very little money going into the classroom, going into increases in teacher pay.
Too many benefits being collected by too many retirees...
starts to threaten the incomes of all the Democrat members of the teachers' union.
Does the Democrat governor try to
1. cut the teachers' union benefits?
2. Get union teachers to pay more into the pot like Chris Christie supposedly did in new Jersey?
3. Cut teacher salaries to pay for the excessive benefits being collected by an excessive number of elderly retirees?
Is there any other solution?
That ship sailed years ago.
Another blue state made promises they couldn’t keep and now will probably want the rest of tax payers to bail them out. How many other blue states to follow?
I worked for many years and was forced to pay into that system in Michigan. At universities, not Detroit K-12 schools as are always the example.
I knew when it got to my retirement at age 71 someone would say “Gee, it seems like a lot of money. I feel like cheating you guys and not paying you for your retirement even though our side promised it.”
If they want to see a revolution we will make Latin America
and Prohibition America and the riots of the 1960s urban areas look like a pleasant day in Mister Rogers Neighborhood.
Not me as a conservative, but many of the March on Washington, SDS and Weather Underground people are still alive and now white haired but can take their bomb making plans down out of the attic banker’s boxes and dust them off. Not a good scenario.
make classes larger....make teachers work longer or take stustantial cuts in their fat pensions...and the states should tax their retirement benefits, something that NYS does not do, and I 'm sure others don't....
and also, if the teacher retires to a nice new state, tax the hell out of their pension....
perhaps if these teachers had to live in the hell holes they've created, they would think twice about living large on other peoples property taxes, sales tax, income tax, etc..
Public school teachers are being paid through this whole thing. Their pensions are being guaranteed. Taxes will not be paid because people are going bankrupt and now they are making the argument that teachers need more money. Is there no shame?
Yes, there is another solution. Quit killing babies, and encourage married couples to make more of them. When these children reach the age of majority, then they get jobs and start businesses, which increases the private economy, which increases the tax base. In the interim, married parents tend to engage in more economic activity to lavish luxuries on their children, which also increases the tax base. We kill one in four children through abortion in this country.
And we have yet another possible solution: close the public schools, fire the schoolteachers, and mandate home schooling of all children. That’s the current law.
But let’s try a different solution: legalizing the overwhelming majority of the previously legal private economy, which the current governor largely banned over the past few months, eliminating the larger portion of the tax base. Communism sucks, and potentially productive people will leave Michigan in droves to go to places where they can produce goods and services legally and honorably, and they will not return to your Communist autocracy, governor.
I know some in Michigan. The school system and teacher salary and benefit system have been an easy legislative target for the Michigan state government big pendulum swings. Both sides havE used and abused it where it is terribly politicized.
If a business underfunded employee pensions it would be called ‘theft’. These underfunded defined benefit programs are almost exclusively government union based. Yet those who have been ‘robbed’ continue to vote for the ‘thieves’.
Yes I know it is technically not theft, the laws have been written to protect the politicians.
State, country and city budgets are in trouble, which of course means the taxpayers will have to pay.
Time to head for a properly managed state...until they figure out a way to collect from those who move!
Naw, the districts will just fire American teachers and bring in Indian H1B scabs.
Governor Gretchen Whitmer is clever - evil but clever. If you put retired teachers in nursing homes and then let the Chinese Bat-Soup Virus run rampant, you can save on pensions, give your education activists larger pay raises, and have SEIU thugs continue casting ballots for the dead. That’s a big democrat win all around.
At some point even the Democrat voters will wake up and realize that the 5% of their state’s population who is a state, county, or local government worker who gets far greater salary, pension benefit, and health benefit than they do.
That wake up call could come very soon when the Senate refuses to bail out these Democrat strongholds with a new China Virus trillion dollar gift to these financially mismanaged states.
I want to hear the squawking when these mismanaged states tell the government workers that they will have twice or more taken from their salary to fund the Cadillac pension and health plans.
Sure there is. Raise taxes. Lots of taxes.
"It's for the children" /sarcasm
Invite all retired MI teachers to a convention for a week and make sure theres someone asymptomatic in attendance as well? Sounds like a diabolical plan from a Hollywood flim.
I guess my subtle implication was too subtle.
If a State wants to reduce the cost of benefits that retirees receive for their lifetimes they can either reduce the benefits or reduce the lifetimes. Which one did Michigan choose?
Not at all.
The State does not want to reduce the cost of benefits. Benefit payouts buy votes. What they will do is cannibalize the taxpayers. Look for ever-increasing property taxes that effectively liquidate the middle class. And look for "cost-of-living" increases which protect Government employees from those same tax increases.
No, the politicians do not care if that crashes their State economy. Government employees will always vote for higher incomes - and those same Government employees count the "votes" in "elections". Politicians know what will get them elected, and fiscal responsibility is not it.
This only ends when States become insolvent and default on payments. If they can get Federal bailouts, it ends with 10,000 percent inflation on a national scale, and collapse of the entire US economy.
There are of course alternative endings to the story. Every one of them features somebody getting stiffed on payments to which they believed they were entitled.
Or dying of COVID.
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