My friend, Ray Clarke once again has not let us down with his detailed notes and commentary from the TESD School Board meeting. Posting the agenda from last night’s meeting, I noted its 101 pages so I have a feeling that last night was long and tedious. Which makes me all the more grateful that Ray attended, took notes and then provides us with his thoughtful remarks. Thanks Ray!
I was particularly interested to know that PSERS was discussed at the meeting. The large white elephant in the room, we’d all like to hope that PSERS goes away or somehow just self-corrects but we know that’s just wishful thinking. PA House Appropriations Chair Dwight Evan’s proposed legislation addresses PSERS, but appears to be a delay tactic where the major liability to the taxpayers remains. But I suppose one could say his bill is better than nothing . . . which is where we currently are on the subject.
At the end of Ray’s notes he asks for State House candidates Drucker and Kampf to weigh in, but my experience says that will be doubtful. Unfortunately, my discussions with politicians anymore seem to be laced with an ‘it’s off the record’ remark . . . but maybe these candidates will surprise us!
Read over Ray’s comments from the meeting and please provide your thoughts. Any other readers attend the meeting, if so, please weigh in with your comments.
The School Board passed:
- The 2010/11 budget with a 2.9% property tax increase, as developed and communicated over the past six months
- Issuance of $23.6 million of bonds at “record low interest rates” – but which will still cost $36.7 million to repay over the next 15 years. Part will be used to advance refund existing bonds, which will save $170,000 next year and have a total net present value savings of $377,000 over the next dozen years. Note that the savings are front-loaded, extra costs come in the out years (see later, re PSERS……)
- A bid to demolish the ESC, leading to a total project cost of $450,000 – about half the working estimates, which is very good news. The work to take place at the end of the calendar year.
- Modifications to the K-6 class sizing practice that will save three teaching positions next year and more later, while remaining in accordance with current staffing policy. The implementation enabled by more recent resignations than expected.
- A bid for printing services to replace the print shop currently housed in the ESC. Important to note that the budget strategy to save $84,000 did not explicitly articulate the $52,000 cost for the outsourced services, although apparently that cost is included in the budget. There was an agonizing 15 minute discussion while the Board and Administration talked all around this without facing up to it.
Interesting update about PSERS: PA House Appropriations Chair Dwight Evans has introduced a bill to implement a Rendell plan to delay the increase in employer (= taxpayer) contributions to teacher and state employee pension plans. Basically this limits the rate of increase of contributions via “collars” on the percentage of payroll that the taxpayer would have to contribute. Here’s an analysis:
From some of the numbers floated, I guess this would provide TESD with at least a $5 million annual expense saving (vs the current forecast) in the problem years coming up.
But of course, the liabilities are still out there, so, to quote another website:
“An actuarial note attached to the bill by PERC (the PA Public Employee Retirement Commission) estimates that the higher costs in later year will far outweigh the contribution reductions in earlier years – to the tune of an astonishing $52 billion over 30 years. That is an additional $52 billion that taxpayers – through higher state and school property taxes – will have to fork over to pay off the pension obligations, and this assumes an 8% annual return on investment.”
This bill is being compared to refinancing a mortgage, which is not a bad analogy. Continuing with that: the plan does of course completely fail to address the fact that the principal (the public sector pension liability) vastly exceeds the market value (= pensions valued at private sector levels). Not a thought being given to writing down that liability!
For how long will voters put up with the union stranglehold on the legislature? At some point the economic pain will become overwhelming. What do our current and would-be representatives think about this?