<p>This is absolutely not a teacher bashing or union bashing situations. Yes, people will go for what the can get and it’s up to the giver to decide where to draw the line. The problem is that no one was calculating the costs, nor were they funding the pensions. A defined benefit plan needs to be funded and changes to the contribution made annually, though amortized over time. Instead of following this requirement that is put in place for such plans, state and other organizations exempt from those rules are funding as they go, just as it works with social security. Not a good idea. One does not see defined benefit plans as much in private industry,</p>
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<p>That’s just been my observation. And I don’t think it’s a secret that Blacks and Whites pronounce some of the same words differently. I don’t see what makes that so racist but okay.</p>
<p>The reasons are complex, and one of the things that is a fact is that the states that are proudly “low tax” often also are on the low side of educational achievement, they tend to be at the bottom of the rankings. While spending a lot of money on education doesn’t necessarily improve the level of education, not spending money has been directly correlated with poor education. If you look at the top school districts in the country, they tend to be places that have large tax bases to fund the schools, they get great performance but spend a lot as well. </p>
<p>There are other factors as well, federal spending as a percent of spending on schools averages 9% (in other words, the average percent of a states spending on schools is 9%), but that is misleading, in NJ it is somewhere around 2% (in many districts, zero), in other states as much as 40% of all spending comes from the federal government. </p>
<p>The way you have to look at it is how much is a teacher worth? How much would someone with a comparable education command on the open market? Put it this way, that 108k teacher after many years of service is about what a decent programmer in the NY area could get with maybe 5 years experience, especially in the financial industry (and often more). Do you want someone who inspires the child and really teaches, or a timeserver?</p>
<p>NJ has problems that are shared by many states. The pension law is such that states, to balance budgets, can defer payments to pension plans, and as a result have ended up with billions in unfunded pensions (if they had made those payments all along, the money is invested, and could probably have covered the liabilities). </p>
<p>There are abuses of the system, there is no doubt about, the whole x% of the final year salary for one thing, in many fields (prob not teaching), what ends up happening is the person is given a lot of overtime, so if their base is 75,000, they end up with 150k with overtime, so their pension ends up being as much or in some extreme cases, more than their pay. The other resentment is that at least in some cases, public salaries have gone up where private sector jobs have been lost or actually pay worse, and the gap between public sector jobs and private ones is much, much less then when I was growing up. Conventional wisdom used to be that people took public jobs for less money because of the benefits and pensions, but that isn’t quite as true any more. In the private sector, pensions are all but dead, most went to 401k’s, which are quite different from defined benefit pensions, and I think people are asking why is that good enough for private sector, but not the public.</p>
<p>NJ has its own unique quirks that foul things up. NJ is not that big a state, though we are densely populated, but it has roughly 660 school districts, which means 660 administration staffs, special ed, sports programs, you name it. There has been talk of consolidation, but everyone fights this, they want “local control of schools”, so you have this weird situation where a town that is tiny and relatively lacking in tax base has to pay for its schools. Towns near where I live were once blue collar, old mining towns, saw a massive amount of building of new homes, that brought with it kids into the school system. It meant hiring more teachers, more administrators, expanding the schools, yet the tax revenue from those new homes generally failed to pay for the kids, thanks to the way the tax law is written a million dollar tract mansion was paying not all that much more than someone who had been living in the town for years, had a modest ranch house that cost maybe a third as much as the newer home (if that)…Then, too, it depends on what county you are in. In Passaic and Essex county, the schools are run on a county system, but you end up getting killed on property taxes, because both counties have cities that are impoverished (Passaic and Patterson in Passaic County, Newark in Essex), so people in the more well off towns end up paying over 10k a year in property taxes on a modest house, because the cities I am mentioning have decimated tax bases. A town that is all bucolic and leafy, that looks so charming, ends up with huge taxes on a relatively modest house, because they have little other tax base. The reality is the only fair way to pay for schools is through broad based taxes, like state income taxes, but the problem there is all the towns and people, who complain about high property taxes, don’t want to give up local control (about 80% of any town’s tax bill goes to the schools). Taxing working people spreads the load, and in the end would stop the kind of surges we see with property taxes…I doubt it will happen, people in places like Bernardsville, Basking Ridge, Livingston and other high tax havens will grumble, but they don’t want to give up the ‘perks’ that 30k taxes on a house do for the schools, and people in more modest towns will grumble about losing ‘local control’…</p>
<p>Someday the US will grow up and realize we don’t live on the frontier any more, and unlike the countries we routinely point to as being ‘competitors’ and 'examples of better education", we need to look at this as a national problem or at the very least as a state problem and find ways to pay for it not based on the local control/one room schoolhouse of the past, property taxes paying for schools are the modern equivalent of the teacher who stayed in the homes of the people in the town, took room and board there, and often was paid in crops or what not…sort of worked back then, but today’s equivalent leaves a lot of schools lacking, and others overpaying for what they get. </p>
<p>cpt- there is one main difference between private sector pensions and public sector pensions. In every private sector pension I am aware of the company funded 100% of the pension. With public sector pensions the employee is making contributions that are covering over 60% of the cost based on the actuarial formula set by the pension board.</p>
<p>There would still be plenty of private sector pensions if the employee was covering as much of the cost as a public sector worker covers. In NJ the funding formula is the employee contributes 7% and the State contributes 4%. </p>
<p>music in NJ overtime never counts towards the pension.</p>
<p>NJ should switch new employees to a 401k because it would be better for the employee. They will not switch because it actually will cost the State more money for at least 15 years.</p>
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<p>Former resident of Illinois here. I knew folks from every ethnic and social group possible. I agree this is a very ill informed comment. And shows a bias that just plain is not accurate.</p>
<p>The only people I ever heard say “Illinoise” were folks who were from outside the Midwest. </p>
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<p>Okay, then it’s wrong.</p>
<p>^^^^^exactly. Edit: oops, my exactly refers to post 60 up thread a bit, sorry.</p>
<p>I’ve worked in healthcare for 36 years. I didn’t choose my field at the age 22 for the salary or the defined benefit plan that came with the position. I doubt I gave retirement one thought until about 25 years in. But I also won’t refuse my retirement payments if I get to collect them (soon). I am grateful.</p>
<p>My teacher son is happy to have a job he loves, money to live on, health coverage. He probably couldn’t tell me much about his retirement plan if I asked him about it, which I haven’t. He might appreciate it down the road if he chooses to stay in the field. </p>
<p>Should public employees feel guilty for having good job benefits?</p>
<p>I have never met anyone who is native to Illinois say Illi noise. I’m sure there may be some people but I have only heard outsiders mispronounce the name. To people in Illinois, saying Illi noise is like fingernails on a chalk board!</p>
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<p>Exactly. My state for years has had one of the best-managed pension plans in the country. This used to be something residents were proud of, until the latest governor was elected and “dropped the bomb” (his words) on public workers with a union-busting plan that pitted neighbor against neighbor and has resulted in teachers and other public workers retiring en masse–and a lot of good people leaving the state.</p>
<p>Here’s another little factoid about where the problem lies. In the pensions structured to require that employers make the required annual contribution as do the employees via upfront deductions to their paychecks, the funds are a very reasonable percentage of the budget and fully funded (see IMRF in Illinois). Remember that pensions allowed states to forego their otherwise required contribution to social security. Try taking a pension “holiday” from that and see how the Feds react. So there were well-managed states who adopted pensions for their employees to attract and hold onto top performers and compete with private industry bonuses, etc. Those states funded their pensions and are able to provide better benefits than the safety-net social security program was meant to do. Other states cynically adopted pensions as a way to get around paying into social security, never intended to fully fund them, and now that the chickens have come home to roost, are portraying the employees as greedy, and trying to pass laws unilaterally breaching a contract that employees have relied upon to plan their financial retirement, have worked for decades, retired relying on those benefits to fund their retirement, and then have the state pass a law by the same spineless political breed that underfunded the pensions in the first place, attempting to make the employee pay for their “borrowing” (what is that called if you never intended to pay it back?). Why? Because the employees are a much smaller voting block than the tax paying public as a whole, that might not appreciate having to pay more in taxes to make up for that decades-old shortfall caused by their elected representatives. </p>
<p>Bottom line is that it’s a tough nut for a statesman to deal with. But this current crop of politicos that supposedly represent we the people instead represent we the lobbyists, and the people who pay them. We need statesman to save this country from them them. I hope there are some people left in this great country that fit the bill. I’m increasingly worried that there aren’t. If so, pensions and deficits will be the least of our worries. </p>
<p>When the hammer falls on the state’s budget, if it ever does, will the politicians (the prominent ones tend to be lawyers) ask the entirely reasonable question of:</p>
<p>was the shakiness of the funding scheme a secret to the teacher’s unions? If not, why did they buy a pig - in a poke - an resell it to their members? </p>
<p>What do pensions have to do with unions? They existed well before there were public sector unions. I am in the pension and when I was hired there was no union. I am in the pension 35 years later and still not in the union.</p>
<p>The unions have never negotiated any of the benefit formulas or actuarial assumptions of the pensions. They have no right or ability to agree to any reduction or added benefit. </p>
<p>The public pensions cover 10’s of thousands of individual’s that have nothing to do with unions.</p>
<p>catahoula, that is an incredibly simplistic (not to mention cynical) explanation.</p>
<p>By the way the funding formula works if both sides make their contributions. The unions and pension members have gone to court in attempts to get the State to make the required contribution. The court ruled that the pensions are guaranteed but prior to the 2011 would not require the State to make the contribution unless pension payments were immediately at risk. There is another court case going on based on the 2011 law seeking the court order the governor make the past due contribution required under that law. The governor is arguing that since the pension is fully funded for at least 30 years he should not be required to make the payment no matter what the 2011 law says. This is the law the governor went around the country claiming fixed the pension issue. He now claims his signature legislation is unconstitutional and there really is no immediate pension problem.</p>
<p>Ah the unions were complicit in a pension scheme argument and thus deserve to reap the financial effects of buying a pig-in-a-poke. Do I have it right, catahoula? As Tom points out above, employees and unions went all the way to the state Supreme Court to force that set to pay their portion of annual funding but lost, so buying a-pig-in-a-poke doesn’t really apply now does it? And, like Tom, I worked for the state as a non-union academic professional in higher education IT with Oracle Databases. These skills are, needless to say, still highly desire able and marketable in today’s society. I’m relying on that marketability now buy having started my own IT consulting firm post state employment after working for a state university for 33 years. I currently pay approximately 60K a year in college costs for my three children in college. My children, God help me, should be able to graduate debt free because of my decades old financial planning, and I’m not about to let a group of spineless politicians get away with abrogating a contract that I relied on for 3+ decades, and after I agreed to provide my service to the state, with a bill designed to make the employees pay for their own financial malfeasance. We live in a representative democracy that exists under the rule of law. That’s what separates the United States from most countries in the world. And yet the same people who wrap themselves in our great constitution are the ones ready to chuck it out the window in the case of my pension contract rights. In the current pension law being fought in the courts, the states main argument is that they have police powers to override contracts in a crisis, even if they were responsible for precipitating that ‘crisis’.</p>
<p>So, I fight for my rights after, as a disabled Marine, I have currently been labeled a ‘taker’ and the equivalent of the renowned Cadillac-driving welfare queen, and all because I decided to make a career working for the state. If I’d have only known…</p>
<p>Balthezar, I hope it works out for you. You show a lot of intelligence. </p>
<p>As a side note, watch out for people who tout state or federal laws requiring balanced budgets. What happens is those states have governors who do what Illinois and New Jersey did. Balanced budget laws don’t keep the budgets honest, the governors still do what they want to do. And that means sports arenas and new business get tax breaks and pensions they’re contracted to fund don’t get funded. </p>
<p>Call the observation simplistic, irrelevant, even unpatriotic if you wish, but the solutions to funding crisis are usually politically driven and always legal after the fact. </p>
<p>While the flavor of the legality remains to be seen, the political portion will be base, as it usually tends to be. Given this isn’t a case of suddenly finding out the ‘Widow’s & Orphan’s Fund’ was secretly embezzled, blame’s likely to be shifted to every party involved. In other words, the sympathy factor that teachers usually enjoy is likely to evaporate.</p>
<p>Hard to claim they didn’t know, is what I’m saying.</p>
<p>Tinfoil hats, anyone? :)</p>