Posts tagged ‘psers’

Two State Reps from York, one an R and one a D (bipartisanship!), have proposed a solution to the coming pension crisis that will be hitting school districts and property owners in two years: allow bars to have small games of chance, then tax them!

Great solution!  Taxing vice is the best way to raise revenue, as far as I’m concerned.  All of the gambling has just been step one to the taxation and legalization of vice!  Well, that’s a bit much.

But still, it’s nice to see legislators proposing solutions.

Today, from Sarah Hofius Hall, we get the usual implications about sweet teachers pensions and their greed, which caused this epic catastrophe that will rape the taxpayers.

The taxpayers are getting a raw deal here, the Times is right about that.  But so are those who should be getting a pension.

I have beaten this issue to death only because the Times insists on doing the same – except with misinformation.  They failed — again — to mention the contribution holiday that districts and the state got, which contributed to this crisis far more than the market did.  But, hey, it’s the Times.  Anything to bash teachers and working men and women, anything to push the narrative that people don’t deserve what they work for and should lose the little they have.

The Times has stepped it up, though, and finally, instead of calling these “teachers’ benefits” used the term “school employee” which is more accurate.  They even mentioned principals and bus drivers!  They forgot secretaries and maintenance staff, but that’s okay.  Baby steps.  They also pointed out that school employees paid twice as much into the system as districts and the state combined.  That’s right.  So please refrain from taking it away from them because of the state’s mistake!

For this crisis, there are potential solutions, and the outlook is not entirely grim.  I’ve mentioned potential solutions in the past and, thankfully, State Rep. Kevin Murphy agrees with them.  Rendell’s expansion of the sales tax, a severance tax on natural gas drilling, and closing the corporate tax loophole would all generate the funds needed to fix this pension crisis.  Districts, then, wouldn’t have to raise property taxes.

Instead, the Times, in a previous editorial, called for 401K retirement plans.  The State Senate is now considering the same.  Thankfully, unions have contracts that were negotiated in good faith and have to be honored.  But these short-sighted politicians, who are solely to blame for this mess, shouldn’t punish school employees or taxpayers.  It’s their mess, they need to fix it fairly.

As usual, the Scranton Times, oligarchic mimics of the Commonwealth Foundation, take some time to misrepresent the pension crisis.

It’s been a few months, so they figured they had to fill the void in everybody’s hearts.

The Times always like to mention how school employees (they used to say teachers, but now they’re being more accurate) got a 25% boost in their pensions due to a deal with teacher’s unions.  Ah, back to teachers being at fault – and then they criticize teachers some more because some get to retire with 87.5% of their salaries – it’s unfair that people have good retirement benefits, unfair!  Then they contradict themselves by saying the average is 75% of teacher salaries, actually.  They blatantly want to make teachers look bad.  Did one of them spank the Lynetts for being bad when they were children?  If so, on behalf of teachers everywhere, sorry.  Now stop with your misrepresentations.

This misrepresentation take the form of a convenient decision to ignore that teachers boosted their contribution levels and that it wasn’t some sweetheart deal with a union.  Not only was that the case, but the teachers contributed for two years where the state and school districts went on a contribution holiday.  The problem is not the fault of teachers or unions, but of bad governance and bad governance alone.

Their solution to poor planning on the part of investors and politicians is to punish pension holders, who did absolutely nothing wrong and deserve what they work for.  Hey, anything to destroy middle-class safety-nets!  Whoever writes these editorials must have a Republican whispering in their ear.   Public unions, like state workers, teachers, police, and fire are one of the last vestiges of the pension system.  This does not mean that the pension system should be destroyed so that these people are equal with everybody else.  What it means is that things like EFCA need to be passed so people have access to unions and can bargain for pension benefits and decent wages at their workplace, something that scares wealthy oligarchs like the Lynetts, obviously.

The way that the Scranton Times has handled this sickens me.  Their solution is much like the Social Security solution proposed by Republicans: privatize it.  For some reasons, the Times thinks doing it like the private sector does it is best.  That’s ignorant.  The private sector is structured to benefit those who control the private sector, and that is not the working man.  Newsflash: if Social Security were privatized, people wouldn’t have Social Security when the market tanks, which happens all the time, particularly as wealthy people (who don’t need Social Security or pensions) manipulate the system and punish the little guy.

So please, Scranton Times, do not encourage punishing public school employees (even though you keep singling out teachers) for the failure of politicians, stop encouraging the destruction what little the middle class has, stop trying to push a Commonwealth Foundation, conservative Republican agenda, and in the future, please propose solutions that are fair.

Now that I think about it, Rendell’s solution to use severance tax money makes a little more sense now, doesn’t it?   Regular taxpayers wouldn’t pay the burden.  Isn’t that fair?  Nobody gets punished, in that case.

But the Times doesn’t even mention that, of course.  Why not?  Like I said, anything to widen the gap between rich and poor.

If it sounds like NEPArtisan is beating the PSERS pension issue to death, it’s because the Scranton Times is doing so, and doing so poorly.

Sarah Hofius Hall, primogenitor of the recent string of “you’re gonna pay more taxes” articles, has routinely ignored a lot of important information. She corrected that today, thankfully.
The first bit of information, and the most important, is that districts (and thereby the state) took a contribution holiday for two years, in which they did not contribute a dime to the pension system. Leaving that out was nonsensical, so thankfully today that got a mention.

The second bit of information is that PSERS is not just for teachers. Anybody employed by a district, from custodians to secretaries to the superintendent to principals are in there. So this problem is not just a teacher problem.

Hofius Hall put those tidbits in. Nice.

But wait. The article actually says that PSEA CONTENDS that a contributing factor to the pension crisis was that districts and the state put no money into it. Excuse me? That’s a fact. Not a perspective. And PSEA contends that teachers put more into the pension system than the state or districts combined. Contends? Hmm… Are you not a reporter? Investigate and ascertain the truth.

Instead, Sarah Hofius Hall makes the issue PSEA vs. solvency. Common sense would tell you that not putting money into something that requires money will cause problems, but, hey, she can ask an accountant. But she didn’t use common sense, or look for certitude.

All this constant reporting serves to do is further the public’s loathing of teachers and their benefits.
Now, as for solutions, I’ve been e-mailing and speaking with State Reps, candidates, and officials and got some insight. In PA, absurd things like gum are not taxed. We don’t have the severance tax on natural gas. We allow for a HUGE corporate tax loophole (of course we do, corporations basically own government in America). If we tax these items, and close that loophole, there will be a windfall of revenue that can quite easily be used to plug this pension gap without any burden on taxpayers (unless you chew gum or own a natural gas fracking company).

There is a solution. It’s not axing pensions, it’s not creating hybrid pension-401k plans, it’s not destroying the middle class. It’s being sensible about taxes and it’s about governing responsibly.

Again, we know that the Times and the Commonwealth Foundation are having a raucous love affair, and that conservatives would love to see pensions removed and the middle class destroyed, but it’s getting really obvious (to me, anyway) by the undertone of these articles.

The problems with the Pennsylvania State Educators Retirement System (PSERS) are pretty dire, and the solutions on the table are unjust and inequitable to everybody.

PSERS is facing a shortfall and the only solutions are to scale it back or increase taxes. Let’s take a look at the solutions, why they are all bad for everybody involved, and how this whole thing happened in the first place.
Scaling it back further diminishes the already minimal value placed on the teaching profession and isn’t fair to the teachers who have dutifully paid into the system. Pensions make teaching attractive. All teachers in PA are required to get a master’s degree within five years of being hired, or they lose their jobs. Many districts make teachers pay for this out of their own pockets. This means teachers must pay in order to keep their jobs. After the five years, the credit-hours teachers have gotten resets to zero, and teachers must, again, get a master’s or master’s equivalent in five years, or again face the threat of losing their job. The second time around is easier, because you can take cheaper courses offered by Intermediate Units, but this, again, takes time and costs money. Teachers often, in a few short years, acquire as much schooling as a lawyer but make a tenth of what a lawyer makes. Yes, yes, “then why don’t teachers just become a lawyers”. Is it so wrong to want to pass on knowledge to youth? To share a passion for a subject? Maybe it isn’t wrong, but it isn’t valued the way it should be. Teachers deserve their pensions, it’s one of the few bright spots in an expensive, time-consuming, underpaid profession. (Note to Readers: Feel free to throw your “summers off” arguments at me, I’m ready to counter.)

An alternate solution proposed is to sell out new teachers and reduce their pension benefits and/or change their plans to something resembling a 401K, bringing it in line with the private sector. Firstly, the private sector isn’t a model of equity for workers. Just because the private sector tries to maximize profit by providing minuscule benefits does not mean everybody should have their benefits reduced. The government doesn’t have the profit motive, so private sector comparisons never make any sense to me. Selling out young teachers is offensive.
Sacrifice the future to secure entrenched workers? Not right.

The other side of this, raising taxes, isn’t fair to taxpayers at all. They did not cause this problem, why should they pay? That’s pretty straightforward.
So let’s look at why we are in this problem.

The cost of pensions is shared by districts, the state, and teachers. A district and teacher will pay a percentage, then the state reimburses the district half of what it paid. This keeps the system fully funded. Simple enough.

Except that Governor Ridge instituted a program, effective 2001 and lasting until 2002, whereby districts did not have to contribute a dime to the pension system, and then in 2003 their contributions were very low.

Meanwhile, teachers kept on paying, but without the contributions by districts (and subsequent state money), the pension fund slowly but surely diminished. Over the years, the effect of this “contribution holiday” compounded, because the money was never made up. It needs to be made up for now, though, and it doesn’t look pretty.

Then the economic crisis hit, hitting the pension hard, increasing the shortfall and the inevitable cost of fixing it.
While this likely makes the Commonwealth Foundation jump up and down with glee, the effect, which Ridge had to be aware of, was that the pension fund would hit a crisis. People do not want to pay more taxes, especially not when it is to fund the retirement of teachers who get their summers off, those jerks. Conservative anti-unionists know this. So, there you have it, a crisis with two solutions: tax people, or destroy the pension. What do you think will be more politically popular? What do you think will be easier?

Yet another vestige of worker security gets destroyed. Yet another nail in the middle class coffin. Yet another success in the fight to destroy unions. The most clever part of this, as Jack London pointed out many, many years ago in the Iron Heel, is that the middle class taxpayers will be fully behind this. The best way for conservatives to fight is to divide and conquer. The middle class has been divided against itself for a long time, and we’ve been getting conquered bit by bit for years.

The saddest part of this is that there is no good solution to PSERS. Everyone will lose.

The Public School Employees Retirement System, aka PSERS, is going bankrupt and will cost districts a fortune to maintain.  The main reason for this (the Times listed three) is that pension funds were poorly invested.  Gambling pension funds in the stock market is folly and unsafe and the state officials who made this decision are totally at fault.

What’s coming down the pike, rather than just tax increases, will be (and have been) attempts to change PSERS.  Last month, the Times proposed a 401K-like plan.  Thankfully, courts have ruled that current pensions represent a contract and cannot be amended.  Currently, though, the state is attempting to get PSEA (the state teachers’ union) to bargain away the pensions of future teachers.  Not nice.

Teachers should not be punished, nor should anybody with a pension for that matter, because these are both earned and set down and contractually agreed upon.  Teachers did not make the mistake that bankrupted the fund.  Wall Street greedmongers and irresponsible state officials did.  But those people don’t have to pay, teachers and taxpayers do.

Rather than force local districts to make up the difference, the state should own up to its mistake and cover losses.  Otherwise, this is just another blow to unions and another social safety net robbed from people who work for them.

Later in the Times, an article by Robert Swift points out that lawmakers in PA have very sweet pensions, and teachers aren’t far behind, then adds that people in the private sector only have 401k plans these days.

This sounds like a criticism of the public sector, but it should be the other way around.  Decades ago, a pension was as necessary to survival as Social Security.  My grandmother gets $12,000 a year from Social Security.  Nobody could live on that, no matter how frugal.  It’s her pension that keeps her going.

The underlying argument that many have is that because they don’t get a pension, nobody should.  It should be the other way around.  People in the private sector should be demanding pensions.  But, of course, the union movement has been systematically destroyed by Republicans, business lobbyists, and people who buy into their negative propaganda.

As a matter of fact, people should notice that the public sector provides for its workers better than the private sector.  The private sector is profit-driven, while the public sector is service driven.  Even if you don’t like the quality of service or the motivation of those who serve, public sector employers are not driven by the profit motive and so do not scrimp on worker benefits and salaries to boost the bottom line.  The public sector has no bottom line.

I speak generally here, of course.  So, in general, those getting pensions should not suffer and those not getting pensions shouldn’t complain about others’ pensions, and instead complain about the lack of their own.