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State wants school districts to contribute more to teacher pensions

BY BECKY MALKOVICH
THE SOUTHERN

A proposal to shift a greater portion of downstate and suburban teacher retirement costs from the state to local school districts is essentially a "burden transfer" that would hurt Southern Illinois schools and could add to the load already carried by local taxpayers, some school officials say.

Gov. Pat Quinn, House Speaker Michael Madigan and Senate President John Cullerton have suggested downstate and suburban schools contribute more toward teacher pension costs as one way to help the state climb out from under its mountain of debt.

But local school districts say that shift in responsibility could not come at a worse time, given cutbacks in state aid and transportation reimbursements.

"I don't know where the districts will come up with the money if they are asked to pay more," Du Quoin Unit School District 300 Superintendent Gary Kelly said. "What this would be is a burden transfer from the state to the local district, and who is the local district? The local district is the local taxpayer. The state is looking to transfer part of their hurt to us - and we're already hurting."

The Teachers Retirement System of Illinois is funded through contributions from members, TRS-covered employers and the state, as well as investment income.

Member contributions are often overlooked in discussions about TRS, Carbondale Elementary School District 95 Assistant Superintendent John Williams said. Teacher employees are required to contribute 9.4 percent of their creditable earnings into the system each year. Like many other districts, CES pays teacher employee contributions as part of a negotiated contract, he said.

If the percentage goes up to 13.77 as some have suggested, "Someone has to pay that additional amount - either the district or the employee. Our contract addresses it as a shared expense, something we would split 50/50 with our teacher employees; they would pay about 2 percent and we would pay about 2 percent. Every 1 percent costs us $70,000 to $75,000, so our district would end up paying an additional $150,000 into the system a year," Williams said.

Frankfort Community Unit School District 168 Superintendent Greg Goins said the state should take a close look at the overall impact on school districts before shifting costs to the local schools.

"If districts are forced to absorb the costs, it's going to come down to either paying for it through an increase in property taxes or making budget cuts that will hurt the quality of education. It might even be a combination of the two. At this point, there are still a lot of unanswered questions and we still don't know if we're talking about full responsibility or a just a portion of it," he said. "It's just a tough time in public education right now. Our general state aid for this fiscal year has been pro-rated and we've taken some pretty big hits in transportation reimbursement over the past few years. This would be one more obstacle to overcome."

State Sen. Dave Luechtefeld, R-Okawville, addressed the proposal in a conference call last week.

"The speaker has come out with a proposal ... that we would require local school districts to pay a bigger part of the pensions. That's going to be pretty controversial, because most school districts are struggling financially. But if that's where Cullerton wants to go, and where Madigan wants to go, that's probably where we'll go, because those two run Springfield," Luechtefeld said. "Every school district in my district is cutting, cutting and cutting, and we're giving them less and less and less."

A statement from Quinn's budget office said the practice of state government paying for the retirement of downstate teachers and professors "requires careful examination and reform" because "employers need to have a stake in funding their own employees' pension costs."