Emanuel to Slash Teacher Pensions

In his annual budget address last week, Chicago Mayor Rahm Emanuel launched a campaign attacking the pensions of teachers and other public sector workers. In the speech, he threatened that property taxes would have to rise 150% if pensions were not reigned in, as pension costs would soon eat up 22% of the city’s budget, the WSWS reported this week.

Emanuel did not release any concrete details about the plan, but his Roadmap to Retirement Security, released in May, included a ten-year freeze on cost of living increases, a 5% increase in employee contributions, a five-year increase in the retirement age, the imposition of private plans (like 401Ks) for new hires, and no increase in the city’s contributions until the system is “reformed.”

Illinois state legislators are in agreement that pension costs must be slashed, but have been unable to enact any changes due to political fighting and maneuvering.  The Democrats want to transfer financial responsibility to local school districts, something Emanuel has supported since Chicago is currently the only city that funds its own teachers’ pensions (the Chicago Teachers’ Pension Fund). Thus, Chicago taxpayers currently pay twice, once for their local teachers’ pension fund and again, through state taxes, toward the state fund.

Republicans oppose this plan because it would shift the burden to suburban and rural districts, many of which they control. According to the Illinois Policy Institute, shifting the pension costs onto the districts would increase their expenditures by 3.7%. This could lead to massive spending cuts, which would likely result in layoffs, increased class sizes, reduced course offerings and other cutbacks that directly affect children.

Emanuel’s plan is part of a larger national movement to impose austerity on working people by increasing their share of the tax burden and decreasing the services and benefits they receive in return. Illinois is one of the battleground states for this movement. The credit ratings agencies have given the state the 2^nd lowest rating in the U.S. (after California) and have demanded pension “reforms” as a necessary step toward restoring their credit rating. According to the WSWS, the Chicago Board of Education also had its credit rating lowered because of pension costs.

California Democrats Robbing Kids to Enrich the Wealthy

Huck/Konopacki Labor Cartoons

Friends and colleagues often assume I’m a Democrat based on my criticisms of the Ed Deform movement or the political system. I try not to feel insulted by this name-calling, but then feel bad that my arguments were weak enough to lead them to this embarrassing conclusion.

When I’m feeling masochistic, I’ll correct them by saying that I do not support either party, and end up having to list recent “betrayals” by popular Democrats. Of course, they are not really betrayals. Anyone who is really paying attention can see that the Democrats, like the Republicans, are members of the same class of bosses, bankers, lawyers and landlords who monopolize all the wealth and social power. While the Democrats may pay lip service to the concerns of unions, women, the LGBT community and other “interest” groups, their policies never threaten (and general bolster) the ability of the capitalist class to increase their profits and wealth.

Thus it should be no surprise that California’s Democratic leaders in the legislature are preparing to vote this week on a Pension Deform bill for public sector employees that was proposed 10 months ago by Democratic Governor Jerry Brown. The revised plan includes raising the retirement age to 62 and increasing employee contributions to 50%, according to the SF Chronicle. It would also cap pensions at $132,000 per year.

The $132k cap might seem reasonable. After all, who makes this kind of money? The cap wouldn’t affect teachers, bus drivers, nurses or the vast majority of public sector employees, at least not for now. However, while a $132k annual salary might seem large by today’s standards, it will become a relatively low salary within a few years due to inflation. Also, even calculated in today’s dollars, a $132k salary would only yield $66,000 per year in benefits for a retiree—(salary multiplied by 0.02 multiplied by 25 years of service)—a decent income if your home is paid off or if you are living in an inexpensive community. In San Francisco, however, a retiree could easily spend more than one-third of this just on housing costs.

Union Busting 101

This pension “reform” legislation is a dual purpose bill. It not only forces workers to pay for the greed of Wall Street (the pension “crisis” is primarily due to investment losses caused by the economic meltdown), but it also drives a wedge into the unions by dividing veteran workers, who will retain most of their current pension benefits, and younger workers who will pay more out of pocket and receive fewer benefits and have to work longer to earn them.

Indeed, the legislation can be seen as an attack on our children, making it much harder and riskier for them to retire, while also lowering their standards of living prior to retirement by sapping more of their take home pay to cover their increased pension contributions. By forcing them to work longer and capping their benefits, they will have fewer healthy years to enjoy their retirements and less to live on. Gov. Brown proudly declared that the changes would make public employee pension benefits for future hires lower than when he took office in 1975, the SF Chronicle reported. 

The unions are arguing that any changes to pensions must be collectively bargained. Many are already preparing lawsuits and ballot initiatives to oppose the legislation, since it undermines existing contract agreements and usurps unions’ power to negotiate this important benefit. I have not heard of any that are asking their members to prepare for a strike action, which will likely be necessary to reverse this juggernaut.

If they fail to halt this legislation, there a two-tiered system will be created, with new hires getting a worse pension plan imposed on them by the state and veteran employees maintaining a better pension plan and the right to collectively bargain any future changes. When younger workers recognize that they are getting a raw deal compared with their veteran colleagues, they may see their unions as impotent or biased against them, especially if the unions do not take aggressive job actions to halt the legislation. This would make it harder to organize and mobilize them for other workplace struggles, thus weakening the overall strength of the unions.

The legislation could also lead to future collective bargaining problems for current employees. For example, even though the legislation allows current employees to negotiate increases in their contributions, this “privilege” implies that legislators intend to ask for increased contributions. Current employees may therefore find themselves in the position of having to choose between raises or pay cuts, increased health care contributions and/or increased pension contributions in future contract negotiations.

A Gift to Wall Street and the Wealthy

Ultimately, any cuts to public employee pensions will be made not to save the program, as legislators and pundits are fond of saying, but to preserve record low tax rates for the wealthy. As long as unfunded pension liabilities can be covered through increased employee contributions and through reduced and delayed benefits, there is no need to raise taxes on the wealthy or to threaten state spending that benefits their businesses.

None of the political parties are friends of working people. Lesser evil, perhaps, but at what cost? Real wages and living standards have been steadily declining for the majority of Americans for the past 40 years. During this time the Democrats have either sat idly by and enjoyed the ride or voted for policies that have hastened the trend.

Brown to Public Employees: Work Until You Drop!

Your Excellency, Please Let Us Retire (Image by Mike Benedetti)

California Gov. Jerry Brown’s plan to cut pension costs would force new teachers to work years longer before they could retire and give them substantially smaller pensions. Those of us currently employed at schools would have to pay roughly 1% more out of our paychecks toward our retirement, amounting to a 1% cut in take home pay. However, the increased costs for teachers could end up being more than 1% if CalSTRS lowers its expected rate of return according to Topics in Education.

Teachers unions heavily supported Brown’s run for governor, giving him millions to support his campaign. They naively believed he would support their members’ interests, despite a well-documented history of violent union-busting and charter schools promotion as mayor of Oakland. Brown repaid the unions with trivial gifts, like appointing a CTA lobbyist to the state board of education and not slashing education funding as much as he could have. However, his attack on teachers’ pensions and the reduction in living standards it will impose on both working and retired public sector workers should have the unions preparing for a General Strike!

The pension “reforms” would significantly decrease benefits, especially for new workers, and raise the retirement age from as early as 55 for some public sector workers to 67 for all new employees who aren’t involved in “safety” work. The plan would apply to all public employees, including state, local, municipal and education workers.

In a particularly absurd statement, Brown said at a press conference that “The plan will make the pension system more sustainable and fair to taxpayers and the employee.”

The plan would supposedly cut the state’s pension costs by billions of dollars over the next 30 years, according to Topics in Education. However, making people work longer, retire on less, and earn less on the road toward retirement is the exact opposite of fair to employees. To be totally honest, it would screw employees!

As it is, no one can survive entirely on a teachers’ pension in most Californian cities. Thus, most retirees must continue working part time, move to a cheaper part of the world, or be fortunate enough to have other investments or a wealthier spouse or partner. Cutting benefits will only worsen this.

The “reforms” will also drive down living standards for working teachers who have seen their take home pay slashed repeatedly over the last three years in the form of increased healthcare premiums, furloughs and, in some cases, wage cuts. The vast most were not earning that much to begin with. Another 1% reduction in take home pay means that many teachers will have trouble making ends meets and supporting their families.

Furthermore, the less one earns today the smaller their future pension. Since pension benefits are based on an employee’s salary during the final years of employment, and raises build up over time, pay cuts now significantly reduce the potential pay during those final years. Virtually no California teachers have had a raise in the last three years, thus reducing this potential for most teachers, while some of the cuts to take home pay may also contribute to this reduced pension potential.

The plan can hardly be considered fair to taxpayers, either, as the majority of taxpayers are low and medium income workers who contribute a higher percentage of their income toward taxes than do the state’s 600,000 millionaires. Fair to taxpayers would involve the wealthy paying substantially more, which would improve the state’s fiscal health, giving it much more flexibility to deal with its numerous budgetary problems, including pensions. Furthermore, the public sector pension “crisis” is the result of fiscal mismanagement by taxpayer-funded pension managers who continue to bungle on in their current jobs at taxpayer expense, combined with the economic crisis, which was due in part to the illegal activities of bankers and investors who have so far paid nothing in penalties or restitution.

Meanwhile, Brown’s plan would do nothing to address the pensions’ unfunded liabilities, which are entirely the state’s responsibility. If the courts require the state to start pay them down, it could result in an enormous increase in its share of the contributions to public pensions, which would directly affect taxpayers.

CA Teachers to Inject Students Rectally

Teacher's new tool (image by Zaldyimg)

SB 161 (Huff), a bill that allows non-medical personnel to administer Diastat rectally to students having epileptic seizures, has passed the California Senate and is now in the Assembly. It also has the support of the Obama administration.

On first glance, the legislation is so absurd it sounds like a sick joke. Teachers will pull down a student’s pants in front of classmates and jab a syringe into his or her ass? In any other circumstance, we’d call such behavior molestation or abuse or practicing medicine without a license.

Here are the problems. All students are allowed equal access to educational services, regardless of disability, including epileptics and diabetics (the legislature also wants teachers to inject diabetic students, just not necessary in their rectums). Diabetics and epileptics sometimes have seizures in class, during which they are unable to inject themselves. Thus, there is a need for someone to be on hand to provide this potentially life-saving service. The only people at schools trained to do this safely, legally and with dignity are nurses, but we have stripped away so much funding from public education that schools can no longer afford full-time nurses. Many schools do not have nurses at all.

The solution, however, is not to put sharp, potentially dangerous needles (or plastic syringes without needles, in the case of diastat) into the hands of untrained non-medical personnel, who are at the same time responsible for the safety and learning of 20-35 other children. It is madness and stupidity, conceivable only because teachers are already so beaten down professionally and their unions so weak that politicians believe they can continue to defund schools and simply pile more and more work onto the teachers, regardless of how dangerous, irresponsible or stupid it is to do so.

Furthermore, ALL students, even those without disabilities, should have access to licensed and appropriately trained medical staff to ensure proper care. Legislation like SB 161 legitimizes and normalizes a world without school nurses, thus placing all students at risk of complications or death from illnesses and injuries that a trained school nurse would normally identify, treat or refer to a doctor. School nurses also have the potential to increase the amount of time students are in class by helping low income students manage minor injuries, disease, hunger or malnutrition that might otherwise keep them home or escalate into an emergency room visit.

Giving injections is not a trivial matter. There are obvious risks, like the spread of HIV and other blood-borne diseases, either through poor training or carelessness, or because teachers may be distracted by their other students, running round, screaming, rough housing or having their own medical emergency. However, the administration of Diastat (which does not use a needle) requires that the provider correctly identify the type of seizure the student is having, administer the drug properly in the rectum and at the correct dosage. It is only used for “cluster” seizures, yet there are many types of seizures, and distinguishing between them is no easy task, especially for a teacher who may never have seen a seizure before and who is likely scared.  If done incorrectly, the injection could cause death from respiratory failure. Furthermore, SB 161 does not provide funding to train teachers, nor does it provide liability protection.

Recommendations by the CTA for its Members and Supporters

• Contact your lawmaker using CTA’s Legislative Action Center.
• Read CTA's official letter of opposition to SB 161.
• Read the opposition letter from the California School Nurses Association.

Recommendations by Modern School for the CTA

• Stop wasting so much time and money buying politicians
• Stop running scared and making compromises with abusive politicians in the desperate hope that the abuse will end (it doesn’t in domestic abuse, why should we believe it would here?)
• Start investing the majority of union resources on organizing members and educating the public
• Prepare for a wave of strike actions, including a general strike, not just to oppose SB 161, but all the attacks on the teaching profession (e.g., pension reform, ending seniority, weakening tenure, increasing class sizes, testing, charter schools) AND for massively increased funding so all schools are adequately staffed with nurses, librarians, counselors and support staff

Attacking Teacher Pensions is Misguided and Stupid

The following is a repost from the San Diego Education Report Blog and highlights some important points about teacher pensions and the particular plight of CalSTRS, the California educators’ pension system.

It is important to recognize that educators are forbidden from collecting social security, which is guaranteed to all other workers as a cushion against poverty after retirement. If teacher pensions, like CalSTRS, are gutted or eliminated, educators will be forced to work until death or retire as paupers. Many teachers, including me, have put in many years at other jobs prior to teaching, paying into social security, but we will never be able to get any of our contributions back as a consequence of our commitment to teaching. While this would is a significant loss, it was balanced by the knowledge that our teacher pensions were secure.

Much of the growing public support for raiding teacher pensions comes from biased data that show bloated payouts to some retirees. However, it is not teachers who are receiving these bloated payouts, it is administrators, especially superintendents, some of whom receive pensions as high as $280,000, while teachers are lucky if they earn $40,000 per year after retirement. $280,000 for an individual is pretty damned cushy, but $40,000 per year is not, especially if you live in an expensive city like San Francisco or New York.

It is also important to recognize that workers pay a portion of their salaries into their pensions. To strip away their benefits retroactively, after having paid into the plans for years, is tantamount to stealing their wages. Likewise, when laws like those in California allow pension managers to invest employees’ contributions into risky stocks, it places the entire system at risk, not only jeopardizing employees’ benefits, but exacerbating state and district budget woes when a downturn causes pension assets to decline.

San Diego Union-Tribune Watchdog highlights this question: "Should there be any pension for [teacher] retirees?"

Clearly, Les Birdsall of San Diego is not interested in attracting the best and brightest to work as teachers in San Diego. Since teachers don't pay for, or receive, Social Security benefits, Mr. Birdsall seems to be asking if retired teachers should perhaps live in homeless shelters and collect food stamps. Why would the SDUT Watchdog print such a silly comment while at the same time failing to investigate costly shenanigans of insurance companies and lawyers at the San Diego County Office of Education? Has the Watchdog received any rabies shots? Is it mad?

See Slaying the Mythical Tax-Fattened Hog regarding public sector pay.

Educator pensions report raised questions
“The average education pension in $40,663. Is this too high?“
By Maureen Magee
SAN DIEGO UNION-TRIBUNE
January 31, 2011

Underfunded public pensions have made big headlines in San Diego and elsewhere, igniting a debate over the cost of retirement packages that often pits taxpayer groups against public employees, with the public somewhere in the middle.

A recent report by The Watchdog on educator pensions contributed to the debate. Some readers wrote to raise questions and voice their views — from outrage over what they call excessive pensions to sympathy for public employees whose retirement packages they believe have been unfairly called into question.

Mary Jean Word, a retired San Diego teacher, objected to our report claiming the educator pension system, like other public funds, offers “high benefits with no clear way to pay them.” She said the broad brush was unfair to those on the lower end.

“Do not include administrators with teachers,” said Word, who retired with 25 years service credit in California and receives an annual pension of $24,000. “They do not teach 20 to 150 students a day.”

Public educators from counselors to superintendents pay into the California State Teachers Retirement System. The program does not classify them by position, however, so separate data analysis was not possible. Although the top pension for a retired San Diego County educator is $281,034, the average retired educator in the county takes home just over $40,000 annually.

Much of the response to our story centered around whether that is a high number. For perspective, recent U.S. Census Bureau estimates show the average person of retirement age receives about $19,000 from retirement, pension and/or Social Security benefits.
Teacher fund status

Jim Wirt of San Diego wanted to know more about the state of the teacher pension fund. “You could have at least mentioned that CalSTRS assets have fallen...”

The fund reported good news last month when it posted 12.7 percent investment returns for 2010, raising its portfolio to $146.4 billion. The fund peaked at $180 billion in 2007 and had fallen to $112 billion in early 2009.

Even so, the system is expected to go broke by 2045 unless contributions are increased by the state, school districts and California educators. Officials say the fund needs a 15 percent hike in employer contributions this year. Only the state Legislature has the authority to approve such an increase. Since the state faces a $20 billion budget deficit, many say it’s unlikely to happen this year.
Who’s to blame?

Marty McGee of La Jolla wants to know how California got into this mess. She wrote, “In order for your watchdog reports to lead to meaningful changes, the people need to know who did it.”

Some of the blame goes to California voters.

“A little-known ballot measure a quarter century ago, Proposition 21 in 1984, opened the door for much of the current controversy over California’s public employee pensions,” former Union-Tribune reporter and pension expert Ed Mendel wrote last year. The measure passed with 53 percent of the vote.

Before Proposition 21, pension funds had been required to put most of their money into bonds. The ballot measure allowed pension funds to shift most money to stocks and other riskier investments. Some have said that public pensions would be more manageable today if the funds had stuck with safer investments.

Other changes to CalSTRS have also contributed to the funding gap.

In an effort to address teacher shortages and convince veteran educators to put off retirement, CalSTRS benefits were sweetened about a decade ago under AB 1509, legislation sponsored by Mike Machado, D-Stockton.

To fund the added benefits, the legislation took a fourth of the money teachers had been contributing to their pensions and used it to seed the added benefit. The teachers no longer pay into the supplemental benefit fund, but they draw from it.
What about Social Security?

Tom Helmantoler, a retired Julian High School teacher, asks this: “What about Social Security? Why can’t someone who has qualified for Social Security in the private sector turn to teaching as a second career and keep the Social Security benefit they earned?”

More than two decades before the Social Security Act was signed, the Teachers’ Retirement Law took effect in California in 1913. Public educators decided to continue to opt out of Social Security in 1955 because CalSTRS offered better benefits. California teachers do not pay into Social Security while they pay into CalSTRS. But some have paid enough toward Social Security to qualify for the benefit from other jobs. Those retired educators see a significant reduction in Social Security benefits under a law designed to prevent double-dipping. Similarly, retired educators who qualify for Social Security as the spouse or widow/widower of a worker who was covered by Social Security also see a reduction in that benefit under the law.

Should taxpayers contribute anything?

Les Birdsall of San Diego asked broader, philosophical questions. “The story tells us the average education pension in $40,663. Is this too high? What would be a reasonable pension? Should there be any pension for retirees?”

Alicia Munnell, director of the Center for Retirement Research at Boston College, said governments must compete with private sector salaries and benefits or it will not attract a qualified work force. And that means offering a decent retirement.

“It’s very easy to say that public sector defined benefit programs are more generous than what most people get in the private sector,” she said. “But it’s really hard to say.”

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