Financial Tunami

The Lancaster newspapers beat me to it. For three weeks I had intended to write a blog about the soon coming financial tsunami involving pension funds that will hit us all in Pennsylvania. But they beat me to the punch and even "stole" my title in their major articles on Thursday. When this tsunami hits, we teachers and retirees will take the blame as taxes skyrocket and school programs are gutted. The first misinformed letter to the editor, blaming us, was published last Saturday in the local newspaper. More will be on the way. And it isn't even our fault. It is very serious. It has been coming for years and politicians have passed the buck and done absolutely nothing to head it off. What is the problem? Our pension fund, guaranteed by the state constitution, has been drastically underfunded by the state and local school districts for several years and now it is facing billion dollar deficits. Where the districts contributed 12.7% yearly up to 2001, the state legislators allowed it to drop as low 1.09% to keep taxes down. This, with the economic downturn, allowed what was one of the most secure pension funds in the nation to suddenly be billions behind. If the rates had stayed the same, there would be no problem. In the meantime, the teacher's rate was increased and they continue to contribute 7.3% of their salaries each year to qualify. State legislators and boards have seen this debt skyrocketing and have ignored it, allowing future elected officials to face it. Our governor, for example, is doing nothing about it. His term will be over when the tsunami hits. It won't be his problem. The prediction is that the school district rate will need to jump to 21.41% over the next three years – that will be an average of $500 more per family in Lancaster County, including mine. The problem was even made worse in 2001 when the state legislature increased their pensions by 50% and to cover their actions, they added on an increase in the teacher's pension plan of 25% for new retirees. We teachers didn't even ask for this, but it was the only way the legislators could get their huge increase passed. These same legislators have unbelievable salaries, perks, and pension plans and many think the teachers have the same thing. While I admit that right now I have a good retirement salary, PTL, there are some things that the public doesn't realize. First, I receive no cost of living increases and probably never will. What I received when I retired in 2002 is the same as I will get 20 years from now, should I live that long. Incidentally, in February of 2002 I filled up my oil tank for $185. This February it cost me $515 for the same amount and my salary has not changed in that time. Second, the state legislators who created this problem have great health benefits for life. Retired teachers have none. We do get $100 per month if we purchase their recommended plan. But above that $100 it cost us $6,500 for health insurance last year and that insurance didn't even cover $7,510 of our medical expenses. And the cost of the insurance climbs each year when the pension stays the same. Now, I'm not complaining. I new this would happen when I retired but when the tsunami hits, we retired teachers will get the blame and will be publicly chastised by angry taxpayers. Those who caused the problem will escape because most of them are no longer in office and many of them are now enjoying their fat pensions with free health benefits. What will happen? Attempts will be made to cut our benefits, but they are guaranteed by state law. Taxes will need to go up, but that probably won't happen. Some of the candidates for governor have already pledged no tax increases – I love their promises, but they are really out of touch with what will hit during their term of office. What will probably need to happen is massive staff reductions, elimination of elective programs such as art and music, elimination of extra curricular activities such as bands and choirs, and introduction of "pay to participate" athletics. This will come because the public will never allow sports to be dropped or reduced. Schools will never be the same. And the other growing possibility is that school districts and eventually even the state will go bankrupt. And if you think that couldn't happen, just look at California. Times are bad and I believe the worst is yet to come. But thankfully there is one sure solution – the return of Jesus Christ. That will create a real tsunami for those left behind on this earth. And I believe, and hope, that this event will happen very soon. Keep looking up!