Teachers blame state for high pension costs

Host Ted,

I would verify that 40k. I heard teachers get 85% of their final annual salary as their pension for life after retirement.

It was told to me by a teacher. If true they get a higher percentage than police officers.

But police officers start off at 56k while teachers only start off at 41k. Plus teachers pay 35% towards their health in the first few years. Police pay nothing.

I say it is time to put the police, firemen, and teachers on Social Security like the rest of the population.

The police pension is 44 billion in the hole. The teachers pension is 42 billion in the hole. Let us not blame the state. Let us blame those who expect to get paid almost a full salary after retirement.
It is ludicrous! It is ridiculous! It is insulting!

You guys expect the taxpayers who don't get a pension to subsidize your pensions to the tune of 21.16% of your wages. I say you can all take a hike! You guys have to smell the coffee like the corporate world smelled the coffee.

What makes you guys priveleged in this day and time? Are you some kind of God Da*n Royalty that us taxpayers have to subsidize you. God Da*n it, subsidize yourselves by putting more of your own da$n money into your own da$n pensions.

I think it is time for us residential taxpayers to vote every city council member and state legislature out of office if he does not end this bullsh*t and nonsense pension funding!

Enough is enough! The ride is over! End all pensions in the State of Illinois and make taxes affordable again! Think private taxpayers...is it fair for you to be subsidizing someone else's pension while you are not getting one? WAKE UP!!!

How many graduating seniors from college can match the starting salary of 56k a Naperville Police Officer makes. Almost none....and we have to pay them a pension...for what!!! Good riddens to all pensions for all public employees...it is a corrupt and broken system that must be abolished sooner than later!!!

Couple of comments to start this off.

The Sun article implies the Teachers Retirement fund deficit is $42 million. This is incorrect. The Teachers Fund deficit is $22.4 million, State employees is $10 million State University is $7.5 million and about a million for judges. The total for all the above is $42 million. Ted will you please issue a correction?

The Teachers Retirement System is in lieu of Social Security. Teachers pay 9.4% of their income into the plan, with the School districts paying in a small percentage and the state paying in a larger percentage, much like our employers pay in the private sector.

Benefits are better with the teachers program due to the fact that they are allowed to invest the proceeds. Below is the recap of 2007 income in millions.

Teachers 826
school Dist 116
State of Ill 738
Investment income 6,831

Pretty obvious where the moneys coming from to pay the more generous benefit,

How did we get to this point?

The deficit has occurred because the state has not contributed over the years the sums it is obligated to make. From Comptroller Hynes;

“During a period of fiscal stress,….. state contributions declined sharply in fiscal years 1982 and 1983 and only increased modestly through fiscal year 1995”

Fast forward to 2006-and 2007 and the state did the same thing, cut the payments it’s obligated to make.

There is a plan in place to make up for the shortfall, Again, Comptroller Hynes;

"To correct this condition and limit future underfunding of state pension benefits, Public Act 88-593, effective July 1, 1995, created a fifty-year funding plan with an ultimate target of achieving 90% funding of system liabilities. The funding plan includes a 15-year phase-in period to allow the state to adapt to the increased financial commitment. Once the phase-in period is complete (fiscal year 2010), the state’s contribution is to remain a level percentage of payrolls for 35 years until the 90% funded level is achieved".

I keep thinking what would the SS trust fund look like if our elected representatives of both parties could keep their hands off our SS payments and instead had invested those funds to help fund new industries with good jobs for Americans, and paying us a generous return to boot.

Response from Ted:

Thom,

Your points are well-made. I'll direct reporter to verify the information you present and once it checks out we will correct online and and in print. And of course, you meant to say billion, not million.

Ted,

D'oh! Yes, billions.

For everyone interested here's an informative link to Comptroller Hynes' piece.

http://www.ioc.state.il.us/FiscalFocus/article.cfm?ID=222

Put them ALL on Social Security OR let the resat of us have individual retirement accounts (so we, too, can invest it for income flow!)

The current caste system of retirement schemes is unfair, elitist to governemtn workers (including teachers!), and demeaning to the general tenets of both democracy & capitalism.

Thom,

Now that Rezko has been convicted along with others, do you know how much impact if any organized criminal activity among the political class has impacted the pension plans?

Were Rezko and his masters able to get their hands on any of the money to invest and pay themselves nice bonuses for their efforts?

On another note, in exchange for 9 months of work per year, job security, generous benefits etc. the teachers accepted reduced wages theoretically compared to what they could get elsewhere (wage parity over the long haul. Given the generous salaries that teachers are now getting, at least in Naperville, does it make sense to scale all the benefits up to the same high level, wage superiority compared to the other tax payers?

Some very special points.

1. INADEQUATE FUNDING

The total contribution rate for teachers is 16.5% versus the 15.4 for Social Security. Yet Social Security is not anywhere near funded (remember it is holding US Treasury Debt so future taxpayers are OBLIGATED to fund the costs). But neither is TRS. And the benefits are substantially larger than TRS (I think at least three times, but I am not paid to do the calculations). The funding for the program needs to be substantially greater. The funding for private pension plans (both defined contribution and defined benefit) and supplemental programs such as 401K PLUS Social Security easily approach 30% of compensation. Higgins will rail that such costs are all employee funded. Partially true, but employers pay lower salary increases if they provide pension benefits. Otherwise employees pay.

Also, I believe that TRS provides SUBSIDIZED medical costs to retirees even though that is not part of the legislative mandate. End this UNAUTHORIZED program that costs taxpayers money.

OVERALL Options to fix this pension shortfall

1. Reduce pension benefits.
2. Increase employee funding.
3. Increase taxes for more “employer” funding.

2. BLATANT MISCONCEPTIONS

Higgins asserts that TRS invests funds and that is why benefits should be better. MALARCHY! All pension plans are suppose to invest their fund. Social security ASSUMES that the contributions are invested; the benefits reflect investment. In fact, I have advocated for the last 30 years that the Federal government should end Social Security with a lump some payment to each person in a special 401k plan and let people make their own contributions. This has been done by the leading country of ……….CHILE!!!!!!!!

Remember what happens in the private sector when a company goes bankrupt. PBCC takes over the pension plan. If the plan is underfunded (like the airlines and steel workers), the pension benefits are cut to the Federal mandated levels. There was just an article about Republic/LTV in the papers over the weekend.

However, TRS does not participate in PBCC. If the state of Illinois declared bankruptcy since they could not live within their means, they would fall back to what the funded amounts could pay.

3. ACTUARIAL ASSUMPTIONS.

There are many issues in this category, but let’s highlight a few.

a. The pension plans rather than the state engage these consultants. Kind of like the criminal picking the people to testify against him.

b. Read the current draft--link as follows (don’t want to pull a Caudill) http://trs.illinois.gov/subsections/general/Buck%20-%20Exp%20Analysis%20Report%202007-revised.pdf

In 2007 alone, the consultants are noting a net $2.4 BILLION CORRECTION in the $22 billion unfunded liability--a 10% error (page 43 of the report). This could never be funded.

c. I do not have the time, but I would suspect that the fund liability is growing faster than inflation or wage growth in just the past ten years. Excessive salary increases, retirement benefits, up to 2 years additional credit for unused sick time. The excessive benefits granted unions are costing the taxpayers TWICE!!!!

d. The average retiree benefit is low, but it includes retirees making $80,000 and those making $20,000. You would expect a low average.

4. FIX THE BENEFITS

The only way this can be fixed is if the benefits were reasonable. On the other blog, a writer noted that public benefits were more lucrative since they were underpaid. While pay has been upgrade, there has not been a corresponding adjustment to benefits. Now is the time to fix this.

a. End the current plan. Freeze benefits based on what has been earned to date. (I honor commitments)

b. Set the new benefits going forward in line with private sector pensions (since pay is now in line with the private sector). I would also defer to a PRIVATE SECTOR benefits consultant or administrator to make this list FAIR.

1. Base pension benefit on total lifetime earnings, not the best five years.
2. Credit pension at 1.5% of earnings, not 2.2%.
3. Cap salaries that can earn credits to state averages. Per page 42 of the TRS actuarial report, the average for a 55 to 59 year old was $57,410. This is similar to PBCC.
4. Calculate a more accurate pension reduction if a retiree opts to take pension benefit before age 65. The current penalty is appears too low. With a teacher shortage, we should not be encouraging teachers to retire early.
5. Eliminate pension credit for unpaid sick time.

c. Increase income tax to fully fund pensions with a level funding (not percentage of salaries) over the next 30 years to get eliminate the revised, lower unfunded liability. We need to be careful on this since we already have high sales and property taxes that make us uncompetitive with the rest of the country (let alone workers comp and union rules as well).

A couple of fun facts that are relevant;

Illinois teachers pay the highest percentage of their income into their retirement fund in the nation.

The combined School District and State percentage for their contribution is

.58% of the teachers salary.

That's 6 tenth's of one percent.

The $22 Billion fund deficit is that .58% contribution plus interest.

First of all teachers and police make A LOT LESS than the rest of the population, put their pay up with doctors and lawyers and than you can talk about giving them social security!

One more comment.

The "underfunding" Higgins references needs to be quantified.

Remember, the Democrats have controlled the Illinois legislature except for four years in the early 90's. There is only so much a governor can do.

Best way to do this would be to take the liability in 1995 when pension funding reform was passed (by the Republicans, by the way) and compare that to the liability today. I suspect that if the liability were contained to the "wage inflation" (generally CPI plus 1%), there would be no additional problem. The problem is that wage increases were greater than this amount as well as other gimmicks such as early retirement withoug an actuarially based discount and severence (20% increases). Underfunding contributed to part of the problem, but with the $10 billion bond program, this should have addressed that. Now it is the explosion in benefits. In 2007, and extra $2.2 billion ALONE!!!!

If you read the actuarial report, they assume that wages will continue to increase at 7%. What happens if the pensionable base was limited to 3% (CPI)? From my experience, there would be a huge decrease in the liability. And the pension benefit would more closely relate to the private sector (where there is no job security).

MISREPRESENTATIONS BY HIGGINS

There he goes again. Let's put the facts on the table.

1. Teachers in many districts (including 203)have negotiated that their pension contribution of 9.4% is paid by the school district, not as a deduction from their wages like Social Security. They get to shelter that payment from income taxes even though we have to pay income taxes on social security.

2. The "employer share" is generally paid by the state, not the local school. As noted before, the equivalent of the state contribution is 7% or a total contribution of 16.4%.

3. Schools only pay a small portion of the cost (other than "picking up the tab" for the teachers.

It would be better of if pension costs were a District responsibility. Then the entire package could be negotiated rather than simply dumping the huge costs on the state.

Interesting dilemma for the Democrats. The explosion in the states unfunded liability has occurred primarly in historically Republican suburbs. The Chicago pension plan has sued the state over pension funding since it favors the downstate plan (everything outside of Chicago). TRS (the downstate plan) if fighting. Will the Chicago democrats sell out the greedy suburban teachers (remember, pigs get fat, hogs get slaughtered!!)?

To For the Kids,

Teachers did not take on three to six years of extra education BEFORE they started work to start their field as doctors and lawyers did.

And many lawyers (I am not a lawyer) that did not attend a top 20 law school make salaries less than teachers or on not lawyers. This has been in the recent press.

Teachers chose a less stressful and low risk profession (from a job security perspective). Lower risk, lower rewards. That is the American way!!!!!

Bring on merit pay to education and eliminate tenure, then the good teachers (who are being held back now) could earn a higher salary just like the good lawyers and doctors. The current system keeps pay lower based on the union philosophy.

The pension being underfunded by $42 billion is an enormous sum. Isn't the state budget as a whole in the $50 billion range?

The state needs to get ALL government workers off the pension system at some point and have them provide for their own retirement, as we in the private sector do with a 401K, 403B, etc. (and pay into Social Security). It would would be better for the state, the teachers and the taxpayers.

For The Kids:

Let's have the teachers: work the entire year; dissolve the union; and do away with tenure. Then we can put them on the same playing field with doctors and lawyers; so that we may discuss their compensation based on performance.

Yes, put them ALL on Social security and end the sweetheart deals! This is the only FAIR way to treat everybody. Beyond the teachers we also have the cops and worst of all the politicians. Maybe someone can add to the list. Equality for ALL or NONE!

Ummm, yeah...last time I checked, teachers work much less of the day and year than most doctors and lawyers, didn't have to pass the entrance exams to become doctors and lawyers, and didn't have to put the extra education years in to become doctors and lawyers. There is some continuing education requirements, but this is also required for professional degrees. They don't need to pay malpractice insurance, they don't need to establish, make successful and maintain their own business and they have powerful unions to do their dirty work as far as their business goes. As far as professional degrees go, you are comparing apples to oranges. I know police, firefighters and teachers that are eligible to retire with pensions in their early 50s, how many doctors and lawyers do this? Also, how many doctors and lawyers plan on retiring on Social Security alone?

Teachers have to take exams at the end of their education. If you check with any local teacher they have a Master's Degree plus up to 60 additional hours after that, to go higher on the pay scale. That equals a Masters PLUS 60 hours. Which can be an additional 4-6 years of education beyond the bachelor’s degree?
Anonymous at 2:18 thinks teachers have unions to do dirty work, think again. Teachers’ might be in the "BUILDING" fewer hours but they take home grade books, papers, lesson plans and reports on children. The day might look short but they take A Lot of work home. Doctors and lawyers make SO much money they can retire early and live on social security because they have the luxury of putting away money for years because they make so much.
Many businesses would pay an employee with a Masters plus 60 additional hours 3 times what a teacher makes. Teachers work for the love of the children not the money. They deserve the benefits at the end of their retirement for all the years put in that they hardly made anything.
Also, the elementary teachers in our area are working in UN air conditioned buildings; can you imagine any person in the business world excepting this for the pay teachers get?

regarding this;

By Dan D on June 9, 2008 12:58 PM

MMISREPRESENTATIONS BY HIGGINS

There he goes again. Let's put the facts on the table.

1. Teachers in many districts (including 203)have negotiated that their pension contribution of 9.4% is paid by the school district, not as a deduction from their wages like Social Security. They get to shelter that payment from income taxes even though we have to pay income taxes on social security.

I do not know how to say this any more forcefully that this;

THE 9.4% THAT IS A TEACHERS CONTRIBUTION TO THEIR RETIREMENT FUND IS A DEDUCTION FROM THEIR GROSS SALARY THE SAME AS THE SS DEDUCTION IS IN THE PRIVATE SECTOR.

Dan Denys has posted so many things that simply are not true It will take forever to go through all of them, but the above is a real whopper.

Many of the previous posts contain inaccurate information about the Teachers' Retirement System and the benefits it provides. Readers who are interested in facts about TRS are encouraged to log onto the system's Web site at www.trs.illinois.gov

Naperville Police and Firemen pay up to 9.91% into their pension from their GROSS PAY! And we pay up to an ADDITIONAL 21.16% for the police and firemen in matching funds. That comes straight from the private taxpayer who is not getting a pension but subsidizing those who get one while getting paid a better salary...with full benefits including health insurance...Go Figure!

OUTLAW ALL PENSIONS!

If the teachers don't get this 21.16% in matching funds, how do they retire with up to 100k in pension money just like the COPS and FIRE FIGHTERS..sometimes more and sometimes less. If the state is paying their up to 21.16% guess where they get that money from....you guessed...us sucker TAXPAYERS!

OVERHAUL THE SYSTEM!

PS. Check out the Ombudsman Thread to see how overpaid our cops are compared to other cities in the USA...you will be SHOCKED!

Thom "KING OF BOMBAST"

1. I never disputed the 9.4% contribution.

Rather, that amount is paid by the District as a tax scam. If you pulled the teachers W-2, a teacher making a $60,000 salary will pay $5,640 to the state pension and retiree health plan. Their W-2 will show a gross TAXABLE salary of $54,360. At a 28% tax bracket, that results in tax savings to the teacher of $1,579.20. If that was a social security employee, the deduction would be $4,590. The W-2 gross TAXABLE income would be $60,000. No tax savings for the regular Joe.

By the way, in checking for info for 3. to follow, I discovered that of the 9.4% "pension" contribution, 0.8% employee and 0.58% school district is to fund retiree health care. Two obvious points. First, the real contribution be pensions from employees is lower. Second, this contribution is SIGNIFICANTLY lower than the 1.65% of FICA that is Medicate tax.

2. Note he never said anything about the 16.4% compared to his assertion of .58%.

Note these numbers from his post

"Teachers 826
school Dist 116
State of Ill 738
Investment income 6,831"

If the teachers contribution is based on 9.4% of salary, then the State of Illinois contribution would be 8.4%, total 17.8%, higher than the prior year, but nowhere near enough to justify the pension benefits.

3. "Dan D has posted so many things that simply are not true It will take forever to go through all of them, but the above is a real whopper." MALARCHY!!!!!!!!

Thom reflects the ignorant view of our politicians. He was correct that my numbers seemed out of balance. So I went back to check them. The current Illinois personal income tax of 3% generates $8 billion. The Democratic state budget is out of balance by $2 billion. We probably need at least $2 billion annually to fix the pensions. And if we need $31 billion in capital, a 20 year payback at 5% would be another $2.5 billion. Ok, we would need to raise the income tax to 5.5% (not 10%) to address all of this spending.

Shouldn't everyone participate in the solution? Why just the taxpayers>

NOTICE HOW THOM DOES NOT ADDRESS THE BENEFITS AND PROPOSED SOLUTIONS. WHO IS PAYING HIM? REZKO?

MALARCHY!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

For the kids

I love this quote

"they have a Master's Degree plus up to 60 additional hours after that, to go higher on the pay scale"

1. They do not take the education to become a better professional, they do it for the MONEY.

2. Are they doing their graduate work at top tier universities or diploma mills such as National Louis or University of Phoenix?

3. Are they taking rigorous courses in their field of study (such as math or science) or "education" classes?

Another interesting quote

"Many businesses would pay an employee with a Masters plus 60 additional hours 3 times what a teacher makes."

I doubt it. If so, teachers would be leaving to triple their income to the private sector. Are there statistics that support this absurd comment? Of course not.

The grass is greener on the other side!!!!!!!

Teachers pay for their TRS, the board does not add to it in some districts, including 204. That is the teacher's money being invested in the retirement fund. They may add to it for admin, but not teachers. Everyone else gets a retirement fund why are you being so critical of the teacher's putting their own money in a retirement account?

Dan,

One more time. Your words;

1. Teachers in many districts (including 203)have negotiated that their pension contribution of 9.4% is paid by the school district, not as a deduction from their wages like Social Security. They get to shelter that payment from income taxes even though we have to pay income taxes on social security.

You are plainly claiming that the school district is paying the teachers 9.4% contribution. It couldn't be more clear that is what you are saying. It also couldn't be more wrong.

So now you are saying this;

I never disputed the 9.4% contribution.

Yes you did as shown above

Continuing your comments you say;

Rather, that amount is paid by the District as a tax scam. Their W-2 will show a gross TAXABLE salary of $54,360. At a 28% tax bracket, that results in tax savings to the teacher of $1,579.20. If that was a social security employee, the deduction would be $4,590. The W-2 gross TAXABLE income would be $60,000. No tax savings for the regular Joe.

Tax scam? Really?

It's all about timing Dan. The teachers get a deduction now and pay taxes on their pension at retirement. If the teachers did not pay taxes on their pension then it would be a scam.

As far as not addressing benefits and proposed solutions,(yours?) give me a break. You've probably got 2,000 words on this post today only. I do have a life. And I do like to be factual when I respond.

Mr. Higgins,

You are wrong! Social Security is not a deduction from Gross Salary. The Gross Salary is taxed both by the Feds and State before S.S. is taken out.

Providing misinformation to help your teacher friends is only going to ruin your credibility, assuming you have any left.

What do you think of the fact that the City of Naperville is robbing you and us to the tune of up to 21.16% to finance police officers and fire fighters retirement pensions to the tune of 75% of their final pay as early as age 51? Does that bother you? Do you care that you are being robbed?

Did you know out city manager is collecting his pension from us taxpayers to the tune of 85k while collecting another 174k in salary and harvesting a second pension to do his job for the city that retired him? We also pay his health insurance in FULL! Do you have any opinions outside the school system?

I would like to hear them!

Thanks! And please correct your information as you asked Host Ted to correct his information. Fair is fair!!!

The bottom line is I agree with those who stated all pensions have to be wiped out. We should all be limited to S.S. and work togther to make it better. How ironic the government sets up S.S. for civilians and gives its employees much more lucrative pensions paid by the TAXPAYER! Very sickening!

Dan,
1. Ok, I phrased that incorrectly. Teachers take those classes to further their knowledge in the changing world of education and curriculum. It is a must to renew their teaching certificates to continue education.
2. I know many teachers who have Master’s Degrees from North Central College in Naperville, DePaul, and Northern Illinois all wonderful places to receive an education. Maybe if teacher pay were higher they could afford Harvard!
3. Of course they take rigorous studies the school districts and state require them to be. You can’t take 3 D Art, they won’ t approve it unless you are an art teacher!
4. Many business DO pay employees with Master’s Degrees 3 times as much. That is reality!
TEACHERS ARE SPECIAL INDIVIDUALS THAT TAKE THE LOW PAY BECAUSE THEY LOVE THE JOB THEY DO! I know a lot of teacher’s who left the teaching field to go out in the business world and do something else for better money and better benefits.
I have a child who wants to be a teacher. He would be wonderful at it, but I fear how he will make a living with a family. You can not live off of one income, being a young parent when the breadwinner is a teacher. How would a young family live on 40,000??????
So, I might not be able to find statistics on my statement but I know A LOT of teachers who feel this way.
You sound to me to be one of the people who have a teaching degree but never were fortunate to have got a job!

I can see we have some spirited debate going on this topic. My apologies for the error in the initial post (see note above).

This is what I think about the topic:

Reform of state-funded pensions in Illinois is needed, NOW. I'm all for hard-working employees -- teachers, police officers, firefighters, clerks, etc. -- contributing a portion of their earnings toward retirement and for their employers to match a REASONABLE amount, comparable to what typically is found in the private sector. However I believe there are too many loopholes in the system and too many abuses, examples of golden parachutes by some that are giving a bad impression of all taxpayer-funded pensions to decent citizens everywhere.

This is one for the legislators to tackle, but they're not going to take it on willingly. It would take a groundswell of letters, e-mails and phone calls from constituents, an organized movement to force this issue.

Close the loopholes. Stop the golden parachutes. If the abuses continue, those exploiting the system are going to be the ones who rob their own colleagues of hard-earned retirement savings when the whole thing collapses because the state cannot meet its obligations.

Referring to this,

By Anonymous on June 9, 2008 7:36 PM

You are wrong! Social Security is not a deduction from Gross Salary. The Gross Salary is taxed both by the Feds and State before S.S. is taken out.

My phrasing is tripping us up here. If you look at my two prior posts regarding Me. Denys claims, he was claiming that the school district was paying for the teachers 9.4% TRS contribution. I responded that no, the teachers 9.4% contribution was deducted, just like your and my SS contribution was deducted, meaning the amount of our pay check was lower by the amount.

So, I wasn't referring to the tax deductibility of the amounts, as you thought.

I'll pass on the questions that don't pertain to Teachers. It's hard enough to keep that straight but I will say since the teachers overwhelmingly finance their own system, and looked to the state for a paltry .58%, I have a hard time criticizing them.

To Mr. Higgins,

The practice of treating the pension payment as pretax income is commonly referred to as the District picking up the cost. Otherwise, the employee has to pay tax on the amount.

Everyone else has to pay tax on their Social Security, so teachers have a benefit that is not allowed for the regular workforce. Companies are not allowed to treat social security deductions as pre tax. Another perk for the public sector including teachers (where the school districts have agreed to do this).

Since you do not agree with Dan D. on this one point, then everything else he said is wrong? Take your bat and ball home and quit?!?!!?

To for the kids,

The point Dan D. was making was that if employers paid people with education masters degrees three times more than schools, then the teachers should leave to make the money at those jobs. You seem to have changed your comment in that all people with masters degrees should make the same amount of money. Untrue. Not all masters degrees are equal--MBA's have a higher market value than an education masters degree. They cost more as well, more than $130,000 plus lost income for two years. They are not the same degree.

I have known teachers that wanted to make three times more money get an MBA. But they take risks including being fired (or right sized). More risk, more pay. The capitalistic backbone of our country despite the attempts by unions to invoke socialism.

Host Ted,

So what you are saying is that if the police and firemen contribute 9.91%, we should contribute 9.91% to match their contribution.

Not 21.16% which is what we are currently doing! If that is what you are saying, I agree with you. If so run an editorial!

Editorials that are well thought out have incredible influence to motivate the private decent citizens to start a grass roots movement while putting these council members and legislatures on their toes.

The council members are the ones that voted 21.16% of our money be given to the government employees...not the state. They are just trying to pass the puck to the state since the City Finance Dircetor gave them each a nice pension! How easy it is to buy an elected Council Member? Brestal does not have to do anything anymore!

It is all done internally at no cost to him!

--------------------------------------------------------------

PS. "contributing a portion of their earnings toward retirement and for their employees to match a REASONABLE amount, comparable to what typically is found in the private sector." Host Ted, did you mean "employers" and not "employees."

Response from Ted:

Yes, Brenda, thanks--I'll go fix it now. And I'll have to research it more before I can say definitively, but it would seem a 21.16 percent employer contribution is excessively generous.

Ted.

I appreciate your comments, and I know the Sun Times did an article on pensions recently, so how about you guys do some investigative reporting and tell us about the abuses, loopholes, and golden parachutes in the TRS?

It would help focus the discussion, that's for sure.

A comparison to Social Security might be helpful too.

Ted,

An excellant post. I summarize what I have seen on this page.

1. Determine what is a fair pension system for teachers. Get an actuary from the private sector to provide meaningful input particularly compared to a private sector pension insured by the PBCC. These issues seem to be the loopholes you are alluding to:

How much of their salary should accrue benefits?
What is the appropriate credit for service--2.2% per year?
Eliminate severence benefits (designed simply to break the pension system)
Should benefit be based on five best years, ten years or all years?
Should employees be given service credit for accumulated sick pay at termination (an average of two years extra pension credits--4.4%)?
What should be the penalty for taking the pension benefit before age 65? The current "discount" seems way low.
Should lump sum payment options be offered?
Should all pension plans be converted to defined contribution rather than defined benefit?

2. If benefits are too generous and should be adjusted, the state should implement what the private sector does--some type of phase in. There are so many options ranging from IBM's immediate conversion to defined contribution with annuities provided to employees for pension benefits they accrued to date (usually much lower than what their pension benefits are worth if they stayed to retirement) to only applying changes to new employees.

3. Create a stable funding plan now--a 20 year income tax surcharge for the unfunded costs that would sunset when the plans are funded is one idea. But more money only after the plans are determined to be fair.

Ask the teachers if they would like a bankruptcy court unilaterally cut their benefits like the airlines and steel companies. How about transferring the responsibility for health care from the employer and the state to the union like all other union employers (and the auto companies in the last restructuring). Let them absorb all of the risks rather than the taxpayer.

Are lawmakers are afraid to address this. You first have to know what your problem is before you can fix it.

Oh and what about the millions in campaign contributions by the teachers unions, do those have some impact on this debate?

For the kids:

Yes many people with Masters Degrees are paid 3 times as much, just as high school drop-outs who make their careers as basketball stars earn quite a bit more than them. However, I don’t think you will be telling your children to drop out of school just yet. Rather than looking at the exceptions, you need to look at the averages. So, here’s a chart - http://www.earnmydegree.com/online-education/learning-center/education-value.html and it’s source – “Source: U.S. Census Bureau, Current Population Surveys, March 1998, 1999, and 2000.” Based on this your stated 300% increase really only amounts to 20%.

For

Annonymous on June 9, 2008 8:54 PM

regarding this;

The practice of treating the pension payment as pretax income is commonly referred to as the District picking up the cost. Otherwise, the employee has to pay tax on the amount.

Well that's news to me my friend, and the teachers that have a very real amount of money deducted from their pay check. Explain the semantics please since there is no cost to the district, how can they be considered picking it up? It certainly can't be a taxation issue they do not pay taxes.

Regarding this,

Everyone else has to pay tax on their Social Security, so teachers have a benefit that is not allowed for the regular workforce.

People in the public sector have taxes withheld on the SS income. Teachers do not have taxes withheld on their TRS contribution. In this case the TRS functions more like a 401K program. You get tax deferral, teachers pay taxes upon retirement. Dan describes this as a tax scam. ?????

And btw there are no 401K's programs available for Illinois teachers, of which many employers in the private sector match a certain percentage of your contribution. So there's a benefit not available to teachers in Illinois.

While you do pay taxes on your SS up front, depending on your income once you start collecting SS you do get some sort of tax break. The less you make in other income the less you pay in taxes. If you could live off your SS it would be tax free I believe.

lastly this;

Since you do not agree with Dan D. on this one point, then everything else he said is wrong? Take your bat and ball home and quit?!?!!?

Your making an error of logic here If "a" then "b" I disagree on a variety of his comments, the specifics tonight were the easiest to comment on and look what happened anyway. but I have a limited amount of time to deal with all of them. The bat's still here as I have time.

Another way to finance teachers (and other public sector pensions)

Teachers (at least in 203)

Do not pay taxes (state or Federal) on pension contributions since District's treat them as pretax (and technically pay the cost).

Do not pay taxes on pensions (nobody in Illinios pays state taxes on pensions, 401k, social security).

Regular people

Pay taxes on social security (3% of $4,590 or $138)

Do not pay taxes on pensions.

SOLUTION

Tax the first 7.65 % out of 9.4% of teachers pension contributions that are treated as pre tax to put them on the same basis as other taxpayers. Close the loophole. If 50% of the 159,000 teachers in the plan get this benefit, this would raise another $10 million. Every little bit helps.

Ted,

BRAVO!

I look forward to your editorial, maybe we can lead the state in thought.

Bubo

I picked this up 31 comments in and already have learned that I don’t agree with either Dan Deny’s or Thom Higgins. They’re polar opposites and I don’t think either one is totally correct. The truth lies somewhere in between. Though I will say I appreciate Thom Higgins for not turning one of his posts into a partisan political ad (stop patting yourself on the back, Dan).

As most Napergatians will attest, I have been a strong supporter for police and fire salary and pensions. However, I think it is time that the city and most other government entities move their civil servants (not police and fire employees) from a pension system to an employee contribution system such as a 401k – teachers included. Most civil servant positions are far different from police and fire work and are also easily transferable to the private sector. Those positions should be in private-sector-like retirement plans.

Comparing Social Security to pensions is apples and oranges. Social Security is a safety net while pensions are meant as the sole or main means of retirement income. Besides, I don’t know anyone under 40 who ever plans on collecting Social Security as they don’t believe it will still be solvent when we retire. It’s just a fact of life.

T.B.

Dan D. wrote:

"Higgins asserts that TRS invests funds and that is why benefits should be better. MALARCHY! All pension plans are suppose to invest their fund. Social security ASSUMES that the contributions are invested; the benefits reflect investment. In fact, I have advocated for the last 30 years that the Federal government should end Social Security with a lump some payment to each person in a special 401k plan and let people make their own contributions. This has been done by the leading country of ……….CHILE!!!!!!!!"

The fact of the matter is that money that is paid into Social Security is immediately paid out in benefits. The exception is the surplus money that has been paid since the mid-80's, and that money has been used to fund the federal government's budget deficit at a low interest rate. Social Security also has features lacking from most pensions, such as dependents benefits. So comparing Social Security to a pension is comparing apples and oranges. They are NOT the same.

"a. End the current plan. Freeze benefits based on what has been earned to date. (I honor commitments)"

If you believe in honoring commitments, then you should support the state at least fulfilling it's obligations to pay the unfunded portion of the teacher's retirement fund from the last two decades.

"Rather, that amount is paid by the District as a tax scam. If you pulled the teachers W-2, a teacher making a $60,000 salary will pay $5,640 to the state pension and retiree health plan. Their W-2 will show a gross TAXABLE salary of $54,360. At a 28% tax bracket, that results in tax savings to the teacher of $1,579.20. If that was a social security employee, the deduction would be $4,590. The W-2 gross TAXABLE income would be $60,000."

I guess in your view, 401K contributions must also be a scam, then.

To all,

Go to the following link and read the 15 pages of changes to TRS (generally enhancements to pensions)

http://trs.illinois.gov/subsections/general/history.pdf

If you really like some heavy reading, take in the following:

http://trs.illinois.gov/subsections/general/Buck%20-%20Exp%20Analysis%20Report%202007-revised.pdf

This report shows how in just the last five years, "changes to actuarial assumptions" cause a $2.2 BILLION increase to the unfunded liability. Read the list for yourself.

This plan is so beneficial that safety net would never do it justice.

Read the information that shows what is really happening. These changes were facilitated by the current powers (last five years).

And by the way, the police and fire pension benefits are also dictated by the state legislature. The City of Naperville and all other municipalities are forced to pay these benefits and contributions.

Sometimes I feel sorry for the uneducated and the ignorant!!!!! For those NPD haters out there, just so you know, all officers have a mandatory contribution to their pension. This replaces social security, there is no benefit of Social Security for them, their spouses or survivor childrent down the road. For the comment about entry level police officers making $56k, go look at the starting salary of Financial services, as public accounting firms are starting new grads out @ $55k, so yes there are other graduates out there making that much. And for those of you who were unaware, each NPD officer is REQUIRED to contribute 32 hours of vacation, sick or comp time to their Post Retirement Healthcare fund, so in otherwords they give back 32 hours of their time to fund a healthcare fund for post retirement. Make sure the next time you pick up the phone to dial 911 for a real emergency, call non emergency line to report a smashed pumpkin in October, or the loud noise of fireworks your neighbors are letting off on July 3rd, that you make sure you tell the person on the receiving end of the call that you feel they make too much money. But as irony will serve that same NPD officer will one day be giving up time with his/her family on Thanksgiving and Christmas to help out you complainers in an accident, car trouble or letting them in their car as they look at their keys in the ignition.

T.B.,

I can not believe you want to make an exception for cops and firemen! Are they better than private citizens?

I can not believe you want to support them with our money to the tune of 21% plus while they only pay 9% for their pensions!

I see why the Napergatians dislike you! You are a contradiction in the making!

We pay our cops 20k above the national average and you want us to top it off by giving them an additional 21% towards their pensions. Even with this 21%, the state pensions are still underfunded 44 billion. Do you just want to be taxed and taxed until we give the state this 44 billion they don't have to replish the pensions? How much tax is bearable to you, T.B.???

You really make no sense, TB! You are the most inconsistent person on this blog site. I don't think your brain knows what your hands are typing. I don't think your right hand agrees with your left hand!

Stop being so hypocritical and turning everyone against you. Check out what Diana posted about cop salaries and benefits on the Ombudsman Thread!

You support the government putting civilians on Social Security while giving themselves pensions! Give me a break TB! That is almost like slavery! It is the abuse of one segment of the population at the expense of another. What happened to EQUAL RIGHTS and TREATMENT? Are you a cop who thinks he is better than civilians?
It make no sense that a civilian will take 21% from his pocket and throw it in a cops pocket who makes 20k more than comparable college graduates.

Cops are great! Should we buy them homes too! Should we buy their wives cars as the next fringe benefit! Let us pay for all their kids to go to college! Let us make their kids automatic cops so they can follow in the footsteps of Dad or Mom! Where does your love for cops end? Do you want to give them the kitchen sink? Please let me keep mine...I need it!

The only reason pensions and social security are different is because the government takes care of their own so much better than civilians. They were both meant to help in retirement. The only difference is one is so much better and subsidized. Otherwise they are for the same purpose...to make life bearable and affordable in retirement!

You have to acknowledge they are for basically the same PURPOSE! Not acknowledging such basics makes you almost look silly on this blog site. I think you think if you keep repeating that they are different and can not be compared people will believe you....no, people are not FOOLISH....they simply begin thinking you are FOOLISH!!! And very UNFRUGAL when it comes to WASTING TAXPAYER MONEY!!!

Thom is absolutely correct. TRS deductions at many districts (203 included) are like 401(k) contributions, they are deducted from gross salary. In Chicago, by the way (where I had actively reviewed teachers contracts), the technical wording in the contract is that CPS (Chicago Public Schools) is paying the cost, otherwise, it would be taxable.

Of course, there should be no argument here. Unless you want to be a bully and pick a fight.

More importantly, think about it a minute. I would like to be able to have my contributions to Social Security be deducted from my income. I would also like to be able to invest my half myself and give up the other 50% to fund the people currently in the system. But our government does not view us as capable of helping ourselves.

The best Democratic quote, "Ask not what your country can do for you, but what you can do for your country." Let me manage my own funds.

All,
One of the threads floating around here is the question of how much the city or state contributes to a respective retirement fund.

I have been told by a representative of the TRS (teachers Retirement System) that the state's responsibility for teachers pensions in .58%. however the state is currently paying more like 7-8% currently. What gives? In the Teachers case the state has enacted a 50 year plan to make up for past underfunding and is making up the shortfall with interest. To be fair the blame rests on both D's and R's. They both have "blood on their hands"

So I will speak for the teachers a bit and guess that this is their position more or less.

"The state was only mandated to pay .58% and should not have stiffed the funds for 15-20 years, or borrowed from it either. It's reasonable to ask the state to make up this minor percentage percentage. Yeah with interest it's $22 Billion."

The problem is it's $22 billion because it has been going on for so long. Remember compounding interest? When you invest it's a great thing, when you borrow it's a bugger, and the state is well and truly buggered

Going further I wonder if that's the deal with the police contribution of 21% that has been thrown around here. Does their plan call for such a large percentage, or are they making up for past sins? Be an interesting question to answer, as I bet people wound be more understanding if the 21% is also making up for past sins.

Ted, you guy's up for providing the answer here?

Dan D wrote:

"But our government does not view us as capable of helping ourselves."

That might be in part because too many 401K participants invest either too conservatively or too aggressively for their circumstances, and too many others who are eligible don't participate at all. So there is evidence that, on the whole, we AREN'T capable of helping ourselves.

-JQP

Thom,

If you would keep a genuniely open mind instead of nitpicking my observation (who is "technically" making the teachers contribution), then there might be some constructive discussions. So without restating my call, I will observe some points that do warrant consideration.

1. The state has ALWAYS contributed to TRS. It is on both Hynes and TRS web site. They gave $4.5 billion in 2003.

2. Why does a TRS agent "misrepresent" (I was really trying to think what verb to use here) the state contribution? Might it be an attempt to direct the focus in the wrong direction? Note TRS is lobbying against a constitutional convention, one that would address these problems.

3. I know you have no respect for me, but I have worked on the accounting and implications of pensions on government budgets for over 30 years. If you skim the TRS actuaries reports I linked (I look for key points and did not read them in detail do to time, so I qualify my comments accordingly), you will note that "events" (essentially actions by local school districts on salary increases, severence packages, sick pay credits, etc.) caused a $2 billion INCREASE in the unfunded liability in 2007 ALONE. Two points. One, that is yet another cost of excessive (not unfair) salary increases such as 203. Second, how can any state official control such costs? This also represents a bait and switch, underestimate the cost of the increased pension benefits, then hit the finances later. This game has been played since social security was implemented in the 30's.

4. I included a link to a document that lists of all of the increases in pension benefits for TRS over the years. The biggest was increasing service credit to a flat 2.2% rather than the phase in over 20 years of service (done in the late 90's or early 2000's--either totally controlled Democratic government or a Democratic legislature with a criminal governor). That change probably doubled the unfunded liability. I think it would be useful for someone to summarize why we are at where we are now. Or as I have advocated, how we can reign this in after 30 years of reckless increases.

5. Just a vinette on police pensions. In 1984 (while I was performing consulting work for the City of Chicago), a mayorial aide to Harold Washington was lobbying to increase police pension benefits. Her comment was that it would cost nothing then. However, I noted that in 20 to 30 years it would cost millions. Response, who cares. Those provisions, by the way, are now coming home to hurt not just Naperville, but EVERY municipality with a police pension fund.

So Thom, beware of the Ides of March. These people feed you misinformation that you spew to the readers. The unions are spending millions not just to preserve these benefits, but to increase them. They were upset when the 20% severence benefit was reduced three years ago, how dare anyone control the plans even more.

Two thoughts for all:

1)For those who appear to still think that teachers are somehow way underpaid versus industry --- get some data, folks! The salaries of teachers is currently right in line with business salaries. Can a teacher afford to start a family or go to grad school? Yes, every bit as much as a young accountant, or engineer, or fireman, or baker, or sanitation worker...

2)Pensions ---for those who think the teacher pensions are at ALL comparable to industry, they aren't. In fact, the teacher pensions ARE WAY SUPERIOR!. First, you need to understand that defined benefit pensions are effectively gone in private industry. Many went bankrupt. The rest have basically all have turned to defined contribution programs (401k programs and the like), which are invested, come out of our pockets, and carry risk. Second, if you run the math (ie the actuarial tables), you will clearly see that the deined benefit programs of teachers are completely superior to both any residual private programs still in exitence AND, in fact, the current defined contribution-401k like programs of today. They carry with them larger benefits AND benefits that can be taken advantage of at an earlier age.

Again, as a final thought: Why aren't we all agreed on the idea that everyone should be on the same base government pension-ASSISTANCE program (SS or some other), with access to other primary programs available (Roth, Keopgh, 401k, etc)?

I mean really, how can we ever expect our feckless leaders in the government to fix SS when they have no skin in the game?

TB

You are correct, Social Security was never intended to be the sole retirement. However, it is incorporated into all private pension plans as a direct reduction to pension benefits.

And most people are not counting on Social Security. But imagine, you pay 6.20% (I thint that is correct netting of Medicare) to get nothing. Yet teachers pay 8% to 9% (their web site is evasive)and they expect to get their benefit.

DOUBLE STANDARD!?!?!?!?!?!?!?!?!?!

I have never seen such waste of taxpayer money. Remember, the public employees used to make so little, that the only way to attract talent was to have a good pension. Well, that was the start of the problem. Now the government workers make more pension than the private/corporate employees, and the difference is accelerating.

I use myself as an example. My corporate retirement is about 15% for early retirement and under 20% for highest years of retirement. The Drew Peterson case raised my radar when it was reported that he makes $6100 per month or $73,200 per year! What the hell is that?

Now I hear about teachers and admin getting a 20% enhancement at the end of their career to boost their retirement even further! What the hell is that? The local taxpayers pick up the tab for everything over 6% in career end bump ups -- so we are picking up a huge burden locally.

This is what happens when fiscal management is an afterthought and the fox is guarding the hen house. It is disgusting how our federal, state and local governments are becoming bloated and wasteful.

Other countries have taken the old US form of capitalism and taken it to heart - and are kicking our asses now. We seem to be sliding into a central government malaise - that's communism people.

Does anyone realize that the US government debt is now over $50 trillion - do you hear either McCain or Obama talking about that - NO.

If Obama is for change, then how about paying the debt off. If McCain is the experienced leader to move the country in a new direction, then why is he burning $100 billion per year on an unneeded war and planning to attack Iran soon - placing us in a position to waste even more hard earned US taxpayer income.

Did you know that the Dem controlled congress has taken earmarks to a whole new level - over 11,000 of them in the current budget? Wake up dear stupid, busy citizens, your country is being destroyed by your federal, state and local governemnt - including the school districts.

"Going further I wonder if that's the deal with the police contribution of 21% that has been thrown around here. Does their plan call for such a large percentage, or are they making up for past sins? Be an interesting question to answer, as I bet people wound be more understanding if the 21% is also making up for past sins."

I believe Councilman Bob indicated the 21% figure includes contributions to make up for past underfunding. I don't recall him saying what the "normal" percentage is, though.

To all,

Let's be clear on "unfunded liabilities." Yes, historical funding was not at actuarial funding levels (no different than Social Security). However, there should be an independent review of the growth in unfunded liabilities arising from increased benefits and capitalizing on loopholes in the pension system particularly the "severence packages" and pension credits on unusued sick time. In the last year, the unfunded liability for teachers went up $2 billion, this is the full impact of local unions and districts bankrupting the state. Lower the pension, don't raise taxes.

I can see how Drew Peterson should have a $61,000 pension when he reached 65 in 12 to 14 years, but if he took the money early, it should be reduced dramatically (down to $30,000). But remember, the pension benefits for government employees are NOT actuarially developed and calculated, rather they are legislated. So let's fix the legislation to make them comparable to the private sector..

I'm surprised all of you are missing the most obvious point here. Those that have good pensions have unions representing them. The corporate world which eschews unions are the ones that did away with pensions, and since the white collar workers (who saw no need for a union as they were educated people) had no one to protect their interests, started taking it in the shorts. Reach 50? Heck, your corporation can replace you with 2 college grads and still save money. You want benefits? Why should the stockholders pay for you? Company loyalty? Only if you are in the upper echelon, then you get the golden parachutes.

Now all these people that were too good for unions want to take away from the dues paying union members reaping the rewards of their union membership. The public, as the 'stockholders', are looking at their bottom line and now want to renege on their promises to public servants because they had the same thing done to them.

You all can throw all the numbers around that you want, but the bottom line is that you let the corporation screw you, and now you want to screw the people that you once considered to stupid to go for the big bucks in the corporate world.

I love hearing about the police and firemen. How they are ready when you need them. Keep in mind that police and fireman don't even rank as one the the top ten most dangerous jobs in the country. In fact a truck driving is listed in the top ten. Are they overpaid YES, They risk their lives cliche is from hollywood. the guy driving the truck is always at risk. police and friemen are only at risk if there is a fire or major crime. Also they knew the job was dangerous when they took it. If your scared quit, I know that there is someone waiting to take your place.

We pay our cops 20k above the national average and you want us to top it off by giving them an additional 21% towards their pensions.
Check out what Diana posted about cop salaries and benefits on the Ombudsman Thread!

While you are there, check out the area average, which is a little more pertinent. Also check the part where posted information shows Diana's research to be wrong.

Dan,

Regarding this;

2. Why does a TRS agent "misrepresent" (I was really trying to think what verb to use here) the state contribution? Might it be an attempt to direct the focus in the wrong direction? Note TRS is lobbying against a constitutional convention, one that would address these problems.

How are you claiming misrepresentation? Had the state kept up it’s payments and not borrowed funds from the program the state would be making a .58% contribution to the system, and no one would be angered by such a small amount by the way. Unfortunately the state didn’t make even that de minimis contribution over a long period and so now we are talking some real money in the 7-8% range.

Regarding this comment;

3….. If you skim the TRS actuaries reports I linked (I look for key points and did not read them in detail do to time, so I qualify my comments accordingly), you will note that "events" (essentially actions by local school districts on salary increases, severence packages, sick pay credits, etc.) caused a $2 billion INCREASE in the unfunded liability in 2007 ALONE.

Well yes, you apparently did skim the document.

The $2.4 billion is the actuarial adjustment looking back 5 years to the assumptions then and what actually occurred, and projecting them forward. it is not a one year adjustment as you have stated rather it is a adjustment of the long term total obligation of the fund. I believe the $2.4 Billion is part of the $22 Billion total liability. The annual impact on the state is $97 million per year or 1.1% of the $8.8 Billion payroll. Not good, but hardly the same as ongoing increases every year.

I see you are keeping this falsehood alive in other comments by you. You are simply incorrect. This is not a one year increase as you continually keep saying. Don’t skim Buck, Read!!!

Further, your attempt to blame this all on salary and perks, is misleading. If you look there are a host of issues, including service time, increased longevity, disability, etc. There have to be 20 different considerations that went into the report. It's not because of excessive salaries as you always complain about.

And as long as we are looking at the Buck document, I point you to page 39 Previously you had commented on the 7% wage increase assumption as being too generous. You suggested a 3% or 3.5% increase as being appropriate. Your problem is that what you are suggesting is that a teachers starting salary never increase except for the CPI which means never getting any kind of promotion. Forever stuck at a starting salary.

The 7% Buck refers to breaks down as follows;
3.5% inflation
1.2% real wage growth (meaning a real increase in wages over inflation)
2.3% for merit and longevity (this is the equivalent to us getting promotions as we progress in our careers.)

Are you really suggesting Teachers forever be stuck at a starting salary?

Link to document for those interested.
http://trs.illinois.gov/subsections/general/Buck%20-%20Exp%20Analysis%20Report%202007-revised.pdf

I am moving out of Illinois as soon as I can. This state blows, just like Michigan, Ohio, Mass., New York, etc. The unions are running these states into the ground and it's only going to get worse.

BTW, I am convinced the only way out of this mess for Illinois will be bankruptcy. The tax burden will become way to heavy and the public will finally throw the union bums out and whack the pension benefits to a more manageable number.

John Q. Public,

regarding this,

I believe Councilman Bob indicated the 21% figure includes contributions to make up for past underfunding. I don't recall him saying what the "normal" percentage is, though.

I think you are correct here, but I'd love a confirmation, and to know what the percentage would have been if the payments were kept up.

I plan on contacting Councilman Feisler and asking when I have a second, unless someone beats me to it.

Ted,

Didn't you initially have a box to click that says remember me? I'd sure love one.

http://www.championnews.net/article.php?sid=1024

Want some more depressing news? Read the above link.

Anon (June 10 @ 4:42 AM) –

Thanks for the concern that I’m turning people anyone against me, but to be honest with you I really don’t care.

You may disagree with me and that’s OK, but save the over-the-top hyperbole for someone else. It just makes you sound like someone on the edge of losing it.

Telling me I have to acknowledge that Social Security and pensions are for the very same purpose is rather, well, laughable. It’s not like I’m the only one saying such things. John Q. Public wrote “…comparing Social Security to a pension is comparing apples and oranges. They are NOT the same.” (June 9 @10:51 PM)

By stating that I support the pay and pensions for fire and police personnel, I am not saying they are somehow better citizens. Those were your words, not mine. I am, however, saying I value their service and commitment and I think offering a benefits package which attracts the best and the brightest is money well spent and in the best interest of the city.

What cops and firemen get for their benefits package is stability. You think I want to give them the world when, in reality, they earn enough to live comfortably. Will they buy homes and put their kids through college? Yes. Will they ever afford one of the McMansions in town? No. They give up the dream of living like the “other half” or the dream of getting rich and in return they get stability in their employment and retirement. I just happen to think that’s not a bad trade for people that serve our community 24/7.

Paying one position more than another has nothing to do with “equal rights and treatment” [caps removed] as you put it. If that were the case, wouldn’t we all be paid the same amount no matter what we do for a living?

And what could this possibly have to do with slavery? May I suggest a good history book regarding the slavery issue for you?

Just because I’m for spending some money for an item I deem a priority that does not mean I wish to waste taxpayers’ money. It’s just a difference of opinion and I’m sure you have some priority which I would find foolish, too.

T.B.

Anonymous of 10:10 AM:

You are so right! The Bureau of Labor Statistices ranks teacher salaries slightly above the middle of comparable white collar jobs. I wonder how many teacher salary apologists have actually thought about the annual salaries of teachers (usually published during contract negotiations) and what they are intended to compensate.

52 weeks x 5 days = 260 possible work days per year

An engineer with 20 years of experience and a master's degree usually receives 4 weeks of vacation and 10 holidays, which gives 230 days of work per year that their employer expects to receive from them.

Our students are in school 180 days per year. According to the District calendar, there are about 11-12 institute/work days when the teachers are expected to be at work when students aren't present. Assuming they spend a few more days after school is out and before it starts getting ready, let's say they have 200 days per year of work that the District expects to receive from them.

If you say that a teacher's annual salary should be the same as an engineer's, you are saying the engineer should work 30 days for free!

So now it is time for someone to mention how hard teachers work and how much extra work they take home. I don't dispute that, but I also know they are not the only ones. Many people in technical fields regularly work 60+ hours a week, a typical work day is 7:00 AM to 6:00 PM, with a few more hours at home each night.

Teachers, in this district at least, really do receive a reasonable salary, plus lots of perks like tenure (which has a real economic value, ask anyone who's been laid off) and very nice pensions.

Let's look at a pension example in District 203. I will examine Dianne Mcguire's pension. Ms. Mcguire is running for State Rep. here in Naperville as a democrat against Darlene Senger in state district no. 96.

She retired at the end of 2006, here are her last four years of salary.

2003 - $84,751
2004 - $87,721
2005 - $105,264
2006 - $108,529

If her age was 55 at retirement her annual pension is $72,424. At age 61 she will receive an automatic 18% increase to $85,461 and a guaranteed 3% increase annually thereafter. If she lives to age 84 her pension that year will be $168,667.

All I can say is WOW, sign me up for that deal!!! My social security statements don't reflect any where near that sort of retirement.

Oh BTW, before anyone gets mad this is all public information over at www.thechampion.org

They have a really cool pension calculator on the site too.

By Ken on June 10, 2008 11:47 AM
I'm surprised all of you are missing the most obvious point here. Those that have good pensions have unions representing them. The corporate world which eschews unions are the ones that did away with pensions, and since the white collar workers (who saw no need for a union as they were educated people) had no one to protect their interests, started taking it in the shorts. Reach 50? Heck, your corporation can replace you with 2 college grads and still save money. You want benefits? Why should the stockholders pay for you? Company loyalty? Only if you are in the upper echelon, then you get the golden parachutes.

Now all these people that were too good for unions want to take away from the dues paying union members reaping the rewards of their union membership. The public, as the 'stockholders', are looking at their bottom line and now want to renege on their promises to public servants because they had the same thing done to them.

You all can throw all the numbers around that you want, but the bottom line is that you let the corporation screw you, and now you want to screw the people that you once considered to stupid to go for the big bucks in the corporate world.
----
Good points, but unions no longer represent basic rights. They have become a blank check for more and more $, more retrictive work rules, etc. that hinder performance of the organizations whether public or private. The fact that they are mainly screwing the taxpayers now, does not give them a free pass. They still represent a drag on productivity. I recommend we pay them competitively benchmarked to other police and fire depts, but that should not carryover into retirement should be a low annual figure depending on choices of the individual and their spouse - like $30k per year max. They can get a part-time job like everyone else if they need more money.

http://www.ift-aft.org/forms/index3.aspx?TID=top152&CID=1399&PID=44

Surprise surprise, the Illinois Federation of Teachers don't want a state constitutional convention. I wonder why????

Question, can teachers have their own Roth IRA accounts or Regular Contributory IRA accounts? I am aware of the income limitations that would apply to the accounts just like a normal taxpayer, but are there any restrictions on a teacher contributing to his/her own IRA?

Pat S. wrote:

"Are they overpaid YES, They risk their lives cliche is from hollywood. the guy driving the truck is always at risk. police and friemen are only at risk if there is a fire or major crime."

Police officers risk their lives every time they walk up to a car they've just pulled over. That it is not one of the ten most dangerous professions does not mean it is one of the safest. Ditto for firefighters.

So, why aren't all of you bellyachers TEACHERS??!!!! If it's such a cakewalk, what with all the free time, money and perks,
why aren't you out on the front lines? Really! It's just soooo easy to be a teacher - especially in Naperville - and make all that money for only nine months out of the year. Then, you get to retire with more than anybody else! You people seriously don't have a clue.

A couple of comments.

Throughout this thread, Bully Higgins (who cannot be civil in any manner) asserted that the reason for the pension problems was previous administrations not funding identified need. I point out that there was a $2.2 billion adjustment to the unfunded liability (along with a constant growth of the total liability at rates greater than inflation). The point of this comment was that it was not lack of previous funding, the issue was that the number was a moving target.

So he drops his argument about not funding the pension and belittles my comments. I do not want to bore people with the details, but the biggest impact of the $2.4 billion adjustment is that people were retiring earlier--$1.4 billion. Private plans penalize early payouts to reflect the longer period of time people will collect benefits. A $1.4 billion adjustment indicates to me that the state penalty (that is legislated and not actuarially determined) is too low. Wait for the Bully to spew more venom on this comment.

By the way, the second biggest factor was the credit for sick pay. Salaries and severence (those 20% salary bumps, now 6%) did not impact (negative $67 million) because the 20% was cut to 6%.

You can also see that Bully Thom did not read the document carefully. The salary assumptions change with age. I think the salary increase issue is relative. I know that many people in their 40's and 50's are not getting increases unless they do something special. My personal opinion is that lower levels should be CPI plus 5%, upper levels CPI, maybe 1%.

As to Kevin's comments on unions, let's look at the auto companies and airlines, the unions did well, eh?

Stms:

I AGREE with you 100%!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

By Thom Higgins on June 10, 2008 8:36 AM
All,

Going further I wonder if that's the deal with the police contribution of 21% that has been thrown around here. Does their plan call for such a large percentage, or are they making up for past sins? Be an interesting question to answer, as I bet people wound be more understanding if the 21% is also making up for past sins.

___________________________________________________________________

Mr. Higgins,
This shocking revelation is not being thrown around. It was provided by the City Finance Director who provided it to Councilman Bob. Councilman Bob was kind enough to blog and provide the data direct from the Director.

I am shocked that the teachers are being attacked for this lousy .58% that we help them with. This thread should be about the police and firemen who receive 35-40 times the help from taxpayers for their pension than poor teachers receive. Leave the teachers alone....for Heaven's Sake!

The police and firemen pay about 9% of their gross taxable wages into their pension. We the taxpayers pay up to nearly 21.16% for them from our TAXPAYER MONEY above and beyond what they pay. The 21.16% I believe is the exact number for the firemen. The police number may be 19 or 20%. Can't remember exactly. It was all posted on the Marshall Thread by Councilman Bob!

In lieu of this, I am shocked all you posters are picking on the teachers instead of the police and firemen who are literally RAPING the taxpayers.

If you want to save money, focus your energy on the real culprits. The police and fire unions. Leave the teachers alone! They are severely underpaid. They start off at 41k. Police officers are a few dollars below 60k for starting pay. We pay their full health insurance. Teachers pay 35% of their health insurance costs initialy. And teachers work very hard in the summer preparing for the following year...some teach summer school! And during the school year they work 60 and 70 hour work weeks with no OT. Police only work 40 hours and get paid OT. Do you guys think these teachers have machines at home that grade essays?

The Police get pensions up to 3 times the size of teacher pensions.

I said enough. Stop barking at the poor teachers. Are you guys afriad to take on the police...they are the real culprits!

_________________________________________________________________

Host Ted,

Apparently your school thread loyalists do not read other important Sun threads. Could you please back what I am saying since I am sure you read it before posting as I have. I hate to see the teachers attacked for receiving about one half of one per cent. The cops and firemen are getting 40 times that. People blogging on this site are in their own world and vastly misinformed about REALITY. Thank you!

Response from Ted:

Years ago when I was a reporter for The Herald News in Joliet I spent weeks on an analysis of salaries in Joliet. It turns out about half the highest-paid workers in that town are firefighters. So I asked why, and explained overtime, and benefits, and "Kelly days," which are free days off that they get in their contract on top of vacation and sick time, and I got into the whole hiring thing with the police and fire commission and guys being passed over on the list to get to nephews and cousins of existing firefighters and elected officials--you know, the same stuff that goes on everywhere. Bottom line, some guys make $100K for working 100 days a year, and have second jobs to boot. (To this day I don't believe the city of Joliet has hired a single female firefighter.) It was a good report, stirred things up for a while, and I wasn't very popular among firefighters.

The point is, when you start looking into salaries, overtime, contract provisions, benefits, pensions for ANY group of public sector employees --teachers, police officers, public works, etc.--you're bound to find some abuses, irregularities and poor policy decisions. I'm not choosing sides here. The amount of Naperville's contributions to employee pensions concerns me, but so do end-of-career bumps in teacher and administrator pay that end up giving them better pensions. Either way, taxpayers foot the bill, either through local or state means.

Regarding Dan Denys comments on 6-10 @ 6:02PM

It is apparent that Mr. Denys is rather vexed with me, however, rather than offer a rebuttal, I ask the reader to read the source document in question and compare Mr. Denys comments with mine.

Here’s the link

http://trs.illinois.gov/subsections/general/Buck%20-%20Exp%20Analysis%20Report%202007-revised.pdf

His first statement;

Throughout this thread, Bully Higgins (who cannot be civil in any manner) asserted that the reason for the pension problems was previous administrations not funding identified need. I point out that there was a $2.2 billion adjustment to the unfunded liability (along with a constant growth of the total liability at rates greater than inflation). The point of this comment was that it was not lack of previous funding, the issue was that the number was a moving target.

This is a new tack on his part. Here are his previous statements that I was responding to;

If you skim the TRS actuaries reports I linked (I look for key points and did not read them in detail do to time, so I qualify my comments accordingly), you will note that "events" (essentially actions by local school districts on salary increases, severence packages, sick pay credits, etc.) caused a $2 billion INCREASE in the unfunded liability in 2007 ALONE.

…Now it is the explosion in benefits. In 2007, and extra $2.2 billion ALONE!!!!

In 2007 alone, the consultants are noting a net $2.4 BILLION CORRECTION in the $22 billion unfunded liability--a 10% error (page 43 of the report). This could never be funded..

Here was my response

“The $2.4 billion is the actuarial adjustment looking back 5 years to the assumptions then and what actually occurred, and projecting them forward. it is not a one year adjustment as you have stated rather it is a adjustment of the long term total obligation of the fund. I believe the $2.4 Billion is part of the $22 Billion total liability. The annual impact on the state is $97 million per year or 1.1% of the $8.8 Billion payroll. Not good, but hardly the same as ongoing increases every year.”

This matter is discussed in the very first two pages of the report. My beef with Mr. Denys three comments is to me he is plainly stating that the $2.4 billion is for the 2007 year ALONE That is simply incorrect and I refer the reader to the source document which will back up 100% of my comments.

I will offer this olive branch to Mr. Denys. I take your point regarding the $2.42 billion as it relates to the un-funded liability, causing you to characterize the liability as a moving target. I will call the TRS office and ask them to clarify this for us, and once again confirm the .58% figure that seems to have you so annoyed .

Regarding this;

So he drops his argument about not funding the pension and belittles my comments. I do not want to bore people with the details, but the biggest impact of the $2.4 billion adjustment is that people were retiring earlier--$1.4 billion. Private plans penalize early payouts to reflect the longer period of time people will collect benefits. A $1.4 billion adjustment indicates to me that the state penalty (that is legislated and not actuarially determined) is too low. Wait for the Bully to spew more venom on this comment.

By the way, the second biggest factor was the credit for sick pay. Salaries and severence (those 20% salary bumps, now 6%) did not impact (negative $67 million) because the 20% was cut to 6%.

Please go to page 43 and review the chart outlining the actuarial assumption revisions.

Increase in mortality rates $830 million

Rates of termination of employment $30 million

Rates of disability $(18) million

Rates of Regular Service Retirement $1,320 million

Utilization of Early Retirement Option $(107)million

Optional Service and Sick Leave Service $421 million

Salary and Severance pay $(67) million

Total $2.2 billion.

Some comments. The system had 73% more retirements in the five year period than expected. I remember hearing that there was a plan in place to offer enticements to older teachers to retire early so as to get younger and cheaper teacher to replace them. I wonder if this is the effect of that. Also, the Optional Service is a program that allows the teacher to buy additional amounts of pension, so I’m not sure regarding Denys statement that the second biggest cost is sick pay.

Later Mr. Denys makes this claim;

You can also see that Bully Thom did not read the document carefully. The salary assumptions change with age. I think the salary increase issue is relative. I know that many people in their 40's and 50's are not getting increases unless they do something special. My personal opinion is that lower levels should be CPI plus 5%, upper levels CPI, maybe 1%.

Here was my post that Mr. Denys was responding to

“The 7% Buck refers to breaks down as follows;
3.5% inflation
1.2% real wage growth (meaning a real increase in wages over inflation)
2.3% for merit and longevity (this is the equivalent to us getting promotions as we progress in our careers.)”

If you go to page 39 you will see I have reproduced the exact figures except that I substituted 2.3% ( 7% less 3.5% and 1.2% my math) for their longer explanation of “6.4% for age 20 to 1.3% at age 50.” for the merit and longevity component

If you read the paragraph you will see they are calling for a recommended average increase assumption of 7%. If you do the simple math you will see that my figures are correct. Showing that the merit increases across all ages is 2.3% a year to me is more informative to the discussion than just giving the two age percentages.
For what it’s worth if you go to page 23 you will see that the average increase for full time teachers was 7.10%. for the last 5 years. Please remember that includes merit and longevity increases.

I rest my case.

To; By Justice for Teachers!!!

It's a little more complicated than that. There are two percentages in play regarding the teacher pension. First, what percentage the state would pay if they had made their required contribution every year in the past, and second, what they are paying now to make up for the shortfall for not making payments in the past. Right now the state is putting 7-8% into the fund.

So a valid question regarding the police and fireman is, are we paying 21% every year because we are obligated to, or because there have not been contributions made in the past?

I'm calling Fiesler this Am to ask.

Thom,

If only you could organize your thoughts--you have lost the jury.

When you check with TRS, the .58% "Employer Share" on their web site I believe (in "skimming" all the web sites) relates to the school district payments for retiree medical coverage. The state has ALWAYS paid more than this skimpy amount.

As I said earlier on the blogs, this information is not laid out very clearly, a cynic would suggest that this is being done to confuse people. For example, at least .5% of the 9.4% contribution is for retiree health (like our Medicare coverage). A side note, you hear these teachers complain about not having Medicare, yet they stay on the public dole for half the cost.

Another point, somebody did an average salary increase for 203 teachers from the TRS records. I recall them being closer to 9% on average. As you point out, the state average (that is from the same data base used to come up with the 9%) is slightly over 7%. Seems that 203 are above average after all. You would expect the teachers with the lower pay to be getting the higher pay increases (in percentage terms).

Finally, unlike your self admission that you are representing the teachers, I restate my position that I intend to be fair. Go back to my original response to Ted. I summarize. Check the pension provisions and adjust to fair (IF they are lowered, the unfunded cost would be lowered). Then fund accordingly. We do not need to provide incentives to retire. There is a teacher shortage and a worker shortage. Unless you hit the lottery or sell a company for millions, you will have to work until you are 68. So don't pay $1.4 billion extra to allow teachers to retire early with lucrative payments. That train has left the station.

Dan,

I have organized my thoughts rather well it seems as it relates to your mis-statements.

Any fair minded reader who reads the Buck document will agree with the following.

1. Your commented three times that the $2.4billion amount is for 2007 ALONE.

You are categorically incorrect.

2. You claim that the second biggest factor in the $2.4 billion is sick leave. As anyone who looks at the chart on page 43 will see the second largest factor is changes to the mortality rates, teachers are living longer. Perhaps we should start killing off teachers to save some money?

Also, and I need to verify this, but while you claim the primary reason for the increase is the early retirement plan is too generous, I recall that there was/is a program to encourages teacher to take early retirement in order to get younger, less expensive teachers on the payroll. This is a common practice in the private sector, and if this is the case, as I suspect it is, that blows that argument of yours.

Regardless, at the least, you are incorrect that the number two factor is sick leave. It is an increase in the mortality tables.

3. You claim that I didn't read Buck carefully. I maintain I read it perfectly and that my numbers correspond with the numbers printed on page 39.

Strike three

So rather than failing to organize my thoughts, I have, using the source document, shown that you are Wrong, Wrong, Wrong.

Further, this is a willful attempt by you to deceive readers.

Finally, unlike your self admission that you are representing the teachers,...

I have never stated I am representing teachers. I do not. I did make this comment that you are keying off of I assume

"So I will speak for the teachers a bit and guess that this is their position more or less."

I was making a guess as to what be their position is on the funding issue.

It is unfortunate that I have to spend so much time trying to set the record straight. It would be far more productive if we could have a honest discussion rather than me having to again and again illustrate the dishonesty of Mr. Denys comments.

Let me say here that I'm not perfect, I do err at times but I own up to it. Mr. Denys in contrast just keeps digging his hole. If anyone has specific comments where they feel I'm in error please make a comment and I will respond to the best of my ability. If I'm wrong I will acknowledge it.

To all,

Reasons for the increase in the costs of police pensions are the same as teachers. The state LEGISLATURE has granted more retirement benefits. Before Thom blows a casket, I got this answer from working with other municipalities that are experiencing the SAME problem. I do not question him about selling cars, his line of work.

The following numbers are taken from the Naperville 2007 annual report (the most recent available)--always want to cite my information page 66

http://www.naperville.il.us/emplibrary/FY07CAFRFinancial.pdf

Pension liability--Police

4/30/02 $51,477,432
4/30/07 $100,297,652

5 year percentage increase
Total 94.8%
Annual compound 14.3%

Pension assets--Police

4/30/02 $41,706,127
4/30/07 $72,123,104

5 year percentage increase
Total 72.9%
Annual compound 11.5%

It does not take a genius to know that if your costs are increasing by 14%, you are going down the drain.

Also, be clear, the unfunded liability went up not because of the lack of funding, but rather because of excessive benefit gains (the basis of the TOTAL LIABILITY).

Justice for Teachers!!! on June 10, 2008 8:05 PM
I am shocked all you posters are picking on the teachers instead of the police and firemen who are literally RAPING the taxpayers
...
People blogging on this site are in their own world and vastly misinformed about REALITY. Thank you!

________________________________________________________________

JFT, I agree that some of the people are in their own world and vastly misinformed about reality - including yourself.

To use a comment like, "literally raping" is vastly misinformed. Perhaps you mean that the police and firemen are "figuratively" raping the people? Try using a dictionary.

If you are going to criticize others, start with yourself!!

I really do not want to respond, but I must when I am called a liar. The thrust of this blog, the state is underfunding pensions. To the three points that Bully Thom notes.

1. The "extra" $2.4 billion increase in 2007 was not know before then, so how could this be addressed? And consistent with state laws, it will be through 2040. How could teachers complain about the state funding an amount they did not know? Doesn't matter if it was over five years of "study."

2. The two factors of the $2.4 billion that I cite (Early retirement 1st and credit for sick pay 3rd) could be taken away and the liability would reduce. Nobody can control mortality. Sorry I put sick pay out of order when I was drafting my comments.

While we are at it, we could also reverse the flat 2.2% credit. My question, are these GENEROUS provisions compared to private plans? Should the state cap the salary (and contributions) to apply the percentages at the state averages on page 42 of the report?

If so (I do not have the information to answer my question), these changes should be implemented to reduce the liability--PROSPECTIVELY (even though when these changes were added, the teachers received the benfits RETROSPECTIVELY).

3. I guess I could STOOP to Thom's level and note that the numbers were on page 43, not 39. In fact, I pointed him to the document.

A larger issue. In the private sector, when one component of compensation (health care, pensions, salaries) cost more than intended (a for which the company's resources can support), they are subsequently adjusted. Question--with the above average average increases to teachers in medical and pension costs, were salaries adjusted?

One point to your comment about salary increases. If the company you work for does not generate real growth, you do not get a salary increase, maybe not even above CPI. I think state local government employees should be held to the same standard, if there is not real growth, no increases. Funny, in 203 with enrollment falling by 2,000 students in process, there would be enought money to pay the REQUIRED number of teachers 8 to 10% salary increases. Instead, the District and the union choose to keep on extra staff. Their choice, right size staffing and get a larger salary increase or keep the excess and get paid less.

My closing comment unless there are some productive comments rather than name calling. I learned that people hold different opinions based on the underlying assumptions to their positions. I respect others opinions (even Thom's if I could find one), but more importantly try to agree where to disagree. For example, if mortality (people living longer) are causing increased pension costs, pay them. I agree that pensions were not fully funded in the 80's and 90's, so we need to pay this bill. But I question the fairness of certain benefits (pension credit for sick time). If people feel that is correct, then we have to pay for them. For early retirement (65 increasing to 68), people collect payments longer so most plans significantly reduce the payment if taken early. It does not seem that the state's actuarial adjustments are consistent with the private sector. Keep that policy or change it?

I cannot see a lie in any of the above. But to simply discredit people asking questions and expressing their opinions seems more suitable for a communist or facist country, not the United States.

Public Pensions and Public Safety

Since this has morphed into a general discussion on pensions, benefits and salaries for all public employees, including the usual NPD bashing, it seems appropriate to say a few words in the defense of the NPD who has been savaged in a number of posts.

In reviewing the crime map, it becomes obvious very quickly that Naperville has several towns with far higher crime rates on three sides and near by.

The invisa-shield that protects Naperville from suffering the same, or even greater, crime rate (since this is where the money is) is called the Naperville Police Department.

Without safety, you don't have any other rights. Unless we are going to form “citizen’s protection committees”, the NPD is about as good as its going to get under the current mega-restrictions that the Federal Government has imposed on the police post WW2. Coincidently, crime spiraled out of control with the waves of restriction and expansion of criminal rights. So many criminals have been created, that politicians now see them as new place to troll for votes.

If Naperville pays an above average price, for better than average performance from its police force, is it worth it? For me the answer is YES. Should expenses be monitored and corrections made where necessary, yes if it does not compromise public safety.

Does this mean that Naperville is crime free?

Living in a metropolitan area that is the home-base and incubator for many local and national street gangs, the answer is no.

The number of gang members in the Chicago area is reported to be as high as 80,000. It is a safe bet that between 150-250 reside in Naperville along with plenty of groupies and want to bees. With MTV and BET, both Viacom properties, as their marketing and PR arm, gangs have a relatively easy time recruiting. Flooding the country with drugs coming across the southern border keeps them in business.

Is it unreasonable when the police ask someone that:

* Looks and dresses like gang members local to this area
* Lives in a house that has been used for years to monitor police patrols on a busy street
* Lives in a house that is designated with gang markings on the exterior
* Lives in a house who’s prior occupants just went to jail for gang related crimes
* Has a kid that brings a pseudo gun to Junior High School
* May or may not associate with known gang members

to pull up their shirt sleeves and shirt to prove that they are not wearing gang identifier tattoos unreasonable?

I believe it is reasonable and that before the Sun published a front page article shading that this guy as a victim (which may be a case of mistaken gang identity), the paper should have asked him to put on his swim trunks.

How long will it be before an attorney paints this a civil rights persecution of an ethic minority? Better to have gangs in every school and on every street corner than make a reasonable request to pull up a shirt?

Host Ted,

When you do your next article on pensions could you provide four columns of numbers?

The headers should be Private, Fire, Police, Teacher

The first line should be $60,000 salary; the second line should be years of service to reach 60K.

Following should be all of the contributions from any source, all of the deductions of any kind and all of the downstream benefits at retirement at what age.

The 50-foot-thick tax code and pension laws are so convoluted that it impossible to tell what is going on without such an analysis.

I agree that if a few retirees are sucking the system dry for all those that follow, by all means let’s fix the leaks and loop holes. I suspect that not all public employees are equal or do equally valued or transferable work.

Bubo

Ok, since Mr. Higgins or now one else will defend Dianne McGuire's outrageous pension (they ignore it completely, anyone else notice that)? Let me put it another way, if Ms. McGuire retired at age 55 she'd get NOTHING from Social Security. At age 62 she'd probably get around $1,200 or so and if she worked until 65 she'd probably receive around $1,400. I might be off a bit but not by much. As you can see the State Public Employee pensions are UNSUSTAINABLE and the TEACHERS UNIONS know it. That's why they are desperate to fight a State Constitutional Convention.

Think, about that for ONE MINUTE. A union wants to stop the VOTERS of this state from having their voice heard. What the heck is that? Man up and make your case to the voters, if they agree with you you win, if not then deal with it, but this notion of preventing rightful VOTERS in this state the right to speak up about their own constitution ought to scare the bejesus out of everyone. This is not communist China or Russia.

To all,

I think the question that was posed, "Teachers blame state for high pension costs". I have set forth a plan to really get to the bottom of the costs, particularly the generous benefits granted in the last ten years (following a 50 year history of giving).

The teachers should look in a mirror at themselves. The old adage, pigs get fat, hogs get slaughtered. The benefits they have secured have wiped out the state. Let's have a referendum, increase taxes or cut pension benefits.

Let the people speak!!!!!

Dan,
You are so misguided.
TEACHERS in 204 put their own money into TRS!!! Get it; it is their money like you putting into a retirement fund.
You have such a chip on your shoulder….Maybe if you go back to school you could become a teacher and collect TRS.

Naperville D203 teachers threatened to strike in 2005 with a 4.99% offer on the table!!!! How did the school board respond? By caving in and upping the ante to 5.2% AND additional retirement enhancements for teachers who were going to retire anyway. Illinois is one of only a few remaining dinosaur states that still allows teachers to strike, and the vast majority of school boards are union-endorsed. This reality emboldens teacher unions to demand more and more every three years. The result is exactly what happened in D203. Higher salaries, because of spineless school boards, which in turn increases the burden on the pension system. Simple.

Mr. Higgins,

Have you spoken to Councilman Bob yet. We all would love to hear what he has to say about these out of control city pensions.

Can you imagine that we the taxpayers throw in 21.16% into their pension fund and they are underfunded by 28,000,000 dollars. 100,000,000 million for pension liability minus 72,000,000 for pension assets. The difference is 28 million and can be found on page 66 of the City Financial report as one blogger pointed out. I verified it.

Are we the taxpayers suppose to give them 42% of their wages now as a pension donation to subsidize their retirement pensions to come out of their huge deficet? Where does it end!

OR

1. We could reduce their starting wages to 40k from 60k and reduce future pension payments by 33% since pensions are based on salary. The City Council controls the salary and not the State of Illinois. It is not the fault of the state they decided to overpay cops by more than 20k the average of surrounding and national communities. Blogger Diana on the Ombudsmen Thread did a very detailed analysis to show our horrendous overpayment of cops. More than $13,000 what an FBI agent makes and he is usually the cream of the cop. $20,000 more than neighboring Romeoville!

2. We could ask police officers to contribute 30% of their wages instead of 9% if they want 75% of their highest pay when they retire as young as 51. If that does not do it we can see if they will pay 50% of their wages towards pension in order that they get 75% of their wages when they retire. Cops are living 30 years after retirement so how can they expect to get 75% of their salary when they retire if they only give 9% of their salary to the pension fund. The math just does not work! Especially when the retirement pension is based on the last year and not the average of the years as in Social Security!

3. If they don't want to contribute 30% to their own retirement from their own wages they should not expect us to contribute 41% instead of 21%.

4. They could delay their retirement age till 65 as civilians do. City Manager Bob Marshall retired at 51 and he is running marathons while gainfully employed at $165,000 by the SAME City that retired him. Why is it necessary to give him 85k a year in retirement money when he is not even retired. How insane! Does anyone expect our City Manager who is benefiting from our broken system to fix it...lol... Let us hope he is not made the permanent manager. He will make sure we pay the 41% in matching funds to keep his 85K flowing instead of the 21% in matching funds we currently pay that is causing a 28 million dollar deficit.

5.Aurora limits its contribution to cops and firemen to 10% and makes them worry about the rest of the money. Their starting pay is 43k while ours is a shy short of 60k. They work just as hard as Naperville cops in a town full of gangbangers. Having lower salaries means having lower pensions that could possibly be affordable on this 10% matching funds. Aurora will only give 10% if a cop gives 10%. If a cop or the cops only contribute 8%, Aurora will only contribute 8%. They installed a cap...where is our cap City Councilman Bob. I guess we lost all our caps with home rule and we can just tax the residents 20% more each year to fix the problems...hmmmmm!

What do you say Mr. Higgins you give us some support since the Napergate Man retired and you seem to want to be involved? If the Napergate Man was advertising this would be a full page ad that could influence elections. Let us hope Host Ted sees the benefit of exposing this racket. Only if it is EXPOSED can it be STOPPED.

Thank you!

PS. Please don't forget to report back to us after you talk CM Bob.
I suspect Ted's Threads are just too hot for him to handle. Just like those Napergate ads were too hot for those before him in office to handle.

I urge everyone to leave the teachers alone. They do pay for almost all their pension money from their salary. We, the taxpayers, are not matching with 21% like we are with the cops and fireman that is not even half of what is need to keep them floating. Go after City Hall and leave the teachers alone. There is a good reason the Napergate Man never went after the teachers. He probably knew they were not milking the taxpayers. Their corruption is an interanl matter that is not costing the taxpayers anything like the corruption at City Hall. Let us stay focused on the BIG FISH!

To For the Kids,

The money teachers pay into TRS would pay barely 20% of their retirement benefits, younger teachers more, maybe 30 to 40%. THE REST IS TAX DOLLARS.

Read the documents at your TRS web site. If you were correct, no taxpayer would care.

Better yet, if your benefits could be funded by 20% of salary (your 8%--the rest by the way is insurance--survivor benefits and health insurance) and 12% from taxes, nobody would care (at least I would not).

But that is not the case. That is why your union stewards are putting out this huge smokescreen to mislead everyone. I could never join or pay dues to a union, they hold back the best and protect the worst. Not a positive work environment.

To,

Anonymous on June 11, 2008 9:33 PM

Councilman Fieseler responded to me and has requested the Finance Director to "As time permits, give a brief answer to this question"

Please realize these folks are busy and Bob Fieseler doesn't have to do this, so please let's be patient. They will get back to us and I will post it verbatim.

as far as this goes;

Can you imagine that we the taxpayers throw in 21.16% into their pension fund and they are underfunded by 28,000,000 dollars. 100,000,000 million for pension liability minus 72,000,000 for pension assets. The difference is 28 million and can be found on page 66 of the City Financial report as one blogger pointed out. I verified it.

As the fund is $28 million underfunded, I will bet that the 21.16% is so high because they are trying to make up for that deficit. How the deficit came about is to me the interesting question.

The essential question regarding state pensions is are they sustainable?

Per a TRS Press release of 1-28-08. Link here;

http://trs.illinois.gov/subsections/press/2008/january28.pdf

The state currently has a un-funded liability of $22 Billion for the teachers retirement system. In 1995 by statute the state enacted a 15 year plan to pay significantly larger amounts to help reduce this deficit. These accelerated payments are scheduled to stop after the 2010 fiscal year at which point the payments “fall to a level percent of payroll funding”. So the TRS is saying the states payment currently at 7-8% of payroll will fall after 2010.

The further questions we all need answered is how much will the payments fall, and how will the remaining deficit be reduced, as the next two years payments certainly will not cover the entire deficit. I will try to get those answers, however a number of people have indicated to me if the state pays its “past due” amounts plus the interest the system is sustainable. Again, we need answers to the above to understand it.

Please note, that in my prior posts regarding the $22 billion un-funded liability I had stated that it was solely due to the state not making it’s full required payments. In fact 80+% of the deficit reflects the state not making its full payments. The remaining amount is due to the actuarial adjustments of $2.4 Billion by Buck, and, I believe, some other issues. I apologize for the error.

Teachers retirement system facts.

From the TRS website;
http://trs.illinois.gov/subsections/general/benefits.htm

A member is eligible to receive a monthly retirement annuity when he or she terminates active service covered by TRS and meets the following age and service requirements:
· age 62 with 5 years of service, or
· age 60 with 10 years of service, or
· age 55 with 20 years of service (discounted annuity), or
· age 55 with 35 years of service.*
* If the member is eligible to receive a retirement benefit of at least 74.6 percent of the final average salary and will reach age 55 between July 1 and December 31, he or she will be considered to have attained age 55 on the preceding June 1.
The retirement benefit is calculated by applying a statutory formula based on average salary and years of service. The salary used in the calculation is the average of the creditable earnings in the highest four consecutive years within the last 10 years of creditable service. For post-June 1998 service, this average salary is multiplied by 2.2 percent for each year of service.
For service earned before July 1998 that is not upgraded (see below), the average salary is multiplied by the applicable percentage according to the following formula:
· 1.67% for each of the first 10 years, plus
· 1.90% for each of the second 10 years, plus
· 2.10% for each of the third 10 years, plus
· 2.30% for each year over 30.
2.2 Upgrade
The member’s retirement benefit is determined by multiplying the final average salary times an accrual percentage times the total years of service. This accrual percentage is 2.2 percent per year for all service earned after June 30, 1998. For service earned before July 1998, the percentage varies based on a four-step formula, unless the member upgrades that service to the higher 2.2 percent accrual rate. However, if the member had at least 24 years of service on July 1, 1998, he/she will continue to receive 2.3 percent per year for years of service beyond 30 unless the member upgrades pre-July 1998 service to the 2.2 formula.
Maximum Benefit
The member’s age retirement annuity will not be more than 75 percent of the final average salary used in the calculation.
However, for members who began teaching before July 1, 2005, a higher benefit may be payable. If the sum of the retirement contributions made to TRS by the member with an additional assumed employer contribution plus the application of statutory interest would provide a greater monthly benefit, the greater benefit will be paid.

My comments below;

If you do not meet the age and service requirements above, then you are considered as retiring early. There is a penalty of 1/2% per month prior to the age of 60 this could result in a of 30% reduction if you go at age 55. that is assessed against the annuity, unless you retire under the Early Retirement Option (ERO). You can avoid the reduction if the actuarial costs are paid. The district has a cost and the individual has a cost. These are calculated on the individual person's history and service. The individual may have to pay upwards to $40,000 to meet this obligation. Under the contract, the district will pay a portion of this cost. The district has in the past embraced early retirement as a way to reduce total salaries. Overall the costs are still cheaper to the district to have a person retire out and replace him/her with a newer teacher with a reduced salary cost to the district.

Under no circumstances can anyone retire under the age of 55 even if they have 35 years of service.. If a teacher leaves the profession prior to age 55 then they are quitting.

An anonymous poster has used the example of Dian McGuire as follows,

She retired at the end of 2006, here are her last four years of salary.
2003 - $84,751
2004 - $87,721
2005 - $105,264
2006 - $108,529

If her age was 55 at retirement her annual pension is $72,424. At age 61 she will receive an automatic 18% increase to $85,461 and a guaranteed 3% increase annually thereafter. If she lives to age 84 her pension that year will be $168,667.

The key question that must be answered how many years did McGuire work, and how old was she when she retired? If we assume she worked 35 years, then her age doesn't matter, and she gets the following assuming the salary numbers are correct, making her average salary $96, 566. Using the above percentages and accepting she retired in 2006, the calculation should work this way.

10 years at 1.67 = 16.7
10 years at 1.9 = 19
7 years at 2.1 = 14.7
8 years at 2.2 = 17.6

multiplier is 68% X $96,566 or $65,664.00 pension benefit.

If she retired at age 55, and didn't have 35 years at that point (pretty hard to do actually) and didn’t pay into the system, that amount could be reduced 30% to $45,964.

So, I believe the Anonymous poster is incorrect in both his pension numbers by about $20,000-$25,000. I will say that my numbers correlate to the pension benefits a retired teacher I know receives. They have a lower average salary and also a lower pension check, but the percentages work. I won’t swear to this but it is based on the figures on the TRS website.

Realize too if she worked less than 35 years it would be correspondingly less.

Also realize that the average pension benefit is about $40K annually. That's it.

To Dan Denys regarding you post on June 11, 2008 12:44 PM

Respectfully, When you are in a hole, stop digging. We all make mistakes, I acknowledged one today just above. I put it in bold so people would see it. Just as I did last January when I was wrong about a comment you made regarding the Hinsdale school district. I printed a retraction and an apology, in bold. Your good friend Bob S was moved to compliment me for doing it, saying it showed high ethics.

So if you goof, own up to it. Don't double down and try to bluster your way out of it, because if you do, I will just post the relevant facts again, and let the readers decide.

Dan,

You are forgetting the interest that they are generating from that money. Also I believe your figures are incorrect. I will check on that.
I also DO NOT believe that there is a huge smokescreen.
I am so sorry that you feel that a union holds back the best, why don’t you that to the fireman who comes to save your family or a police officer who helps you out during a crisis’s. Better yet at your child’s next parent teacher conference tell their teacher that how you feel. When you walk the halls and see all of the hard work your child’s teacher has put into his/her classroom remember what you said about a positive work environment. I believe our public school system in Naperville is a very positive and wonderful environment to work. I challenge you to do some volunteer in your local school. You can see for yourself what a positive environment the teachers and school staff have created for the children. The union has nothing to do with it.
One more thing Dan, you obviously can read and write so, why not thank a teacher.

To: For the kids,

Naperville has well educated parents that are involved with their kid's education.

Naperville kids generally come from stable environments have involved parents and are far more likely to do well in school. Considering the number of engineers we have in town, is it a surprise that we do will in math, whether it is genes or learned.

Naperville has good teachers and apparently has good administration, everything seems to work.

Because of the above three, Naperville schools produce good results.

A few questions:

* Are the best teachers the most highly compensated? Why not?

* With approximately 1000 less students (I'm quoting from the boards) than a few years ago, why do the 203 schools require such large increases in taxes to perform at the same levels?

* Are large employers are moving jobs out of Naperville to lower cost areas? Are the substantial property tax increases driving our employers away? If the answer is yes, how long before we become Elgin after the watch company or Aurora after John Deere?

* Are the current salary/retirement packages and property tax increases turning-off many residents to the Naperville Schools and its teachers?

* If Naperville's teachers and administrators were moved in mass to some of the more crime ridden areas in Chicagoland, could they produce the same results?

* Are there a lot of good teachers and administrators that would like to work in Naperville?

* Are there Naperville Teachers and City employees that scoff at the idea of living in Naperville and state that the taxes are a show stopper for them? YUP.

For the kids,

As posted previously.

Recap of 2007 income in millions.

Teachers 826
School Dist 116
State of Ill 738
Investment income 6,831

The investment returns are what really makes the system work. I remember reading on average the system has returned 8.5% annually. This is not guaranteed but shows the power of professional money managers. I dispute the characterization that the teacher contribution and investment income can only fund 20-30% and the rest is tax dollars.

Remember, per the TRS the $728 million is an elevated payment into the fund.

Your pension figures on Ms. McGuire are wrong and mine are right. In 2006 when she retired she had 27 years under her belt as a teacher.

Gotta love the teachers union. I love how they are always working for the kids. See the article below from today's Chicago Sun Times.

Must be rough working as a union hack.

http://www.suntimes.com/news/education/1001907,CST-NWS-teachers12.article

Bubo,
Are the best teachers the most highly compensated? Why not?

In all honesty in education you have lots of different levels; High, above average, average, low average and children who struggle. If you started compensating teachers for their work everyone would want the high or above average, and average kids who would make gains. It is fact that some learn slower and need more interventions and proceeded at a different rate. So a teacher who enjoys helping the lower kids and would like a cluster in their mix would not show the gain of a teacher who had a different mix. So, the logical answer would be to spread them all out. While these students work more with RI teachers and interventionists they are best to be clustered together so they could be pulled at the same time. 204 also has data to show how fluent students can read. They meet several times a year to check growth and in all honesty, every classroom has growth. All teachers deliver the same curriculum.

Anonymous at 11:05 AM
That is Chicago Public Schools! I have never been invited to a Union event. That is ridiculous! Almost all unions do not have social activities!

To;

Anonymous on June 12, 2008 11:05 AM

Regarding this;

Your pension figures on Ms. McGuire are wrong and mine are right. In 2006 when she retired she had 27 years under her belt as a teacher.

As I got the same results you offer from the Champion websites pension calculator I will assume that is what you are using.

I refer you to these comments regarding the Champion calculators assumptions;

Pension Calculator Information
Pension calculated assuming member is 55 years old with 34 years service with current salary history. Those with less than 34 years who continue to work will, in most cases, have higher pensions than those calculated. Those members who retire with less than 34 years may have lower pensions than those calculated.

If in fact we are talking about only 27 years service, and as the program only calculates based on 35 years service, by definition, your number is wrong as benefits are based on years of service, and of course increase with longer service. I haven't had the time to back into my calculations based on the lower service number.

It would be interesting to contact Mr. Zettler and ask for the formulas used in his calculations. Regardless, the calculator should have a place for the teachers age and years of service.

I don't know if you made the second post regarding the Chicago Teacher Union, but my comment is yes, they are human and do all the stupid, illegal, unethical things that others do. If they are guilty they should be punished, just as anyone in any other profession.

By Dan D on June 10, 2008 6:02 PM "As to Kevin's comments on unions, let's look at the auto companies and airlines, the unions did well, eh?"

Dan D, can you show me where I said the comments you mentioned above? I have not even written an entry on this thread until now. I am confused as to why you would just throw me into this debate. Please explain. Thanks!

I just want to add that I know some teachers, and thechampion.org doesn't tell the whole story. One teacher I know is listed as the highest paid teacher in his district, but he gets stipends for doing extra work: directing plays, coaching tennis and track, moderating the speech team. If a teacher gets stipends of $2K or $3K or $5K per activity for this extra work, I believe that's fair--it takes extra time, they're earning that, and it benefits kids. thechampion.org reports a figure that includes these stipends, and it's sort of misleading--I just want people to know that.

I'm still very much against end-of-career salary bumps to boost pensions. That's just wrong.

As long as we are talking about the champion.org I though I would offer the following that was sent to me by the Assistant Superintendent of Finance for 203 in early 2008. I've removed the names for privacy purposes.

"The website “thechampion.org” has recently published some tables purporting to be a longitudinal schedule of teacher and administrator salaries for school districts. Several individuals have quoted figures from these tables and I have been asked about the information in the tables."

"A closer look at the listing for District 203 shows, at best, only 80% of the teachers are on the list. A closer look shows that many received increases of 10%, 20%, 50%, even 200%. How can that be? Because some teachers take an unpaid maternity leave in the base year, and then come back for the full year the next – the difference in salary is counted as an increase. Some teachers were hired at half time the first year, and full time the next – all counted as an increase. Some teachers started after the beginning of the school year and worked the whole next year – all counted as an increase. Some teachers became a coach or taught extra classes – all counted as an increase. In fact, given these circumstances, you would expect there to be a decrease in pay for those teachers that worked a full year in the base year and only a part of the next year due to maternity leave, or were a coach in the base year and gave up the position the next. Why not? Because the list only reports increases – not decreases – in the overall payroll – anyone with a decrease in pay was excluded from the list. And those increases are reported without regard for time worked, extra days worked, extra jobs, or full school year versus partial school year worked. In fact, in the same year the list reports an 8.3% average increase in pay for teachers, the Illinois State Board of Education reports the average teacher pay went up 3.7% for Naperville District 203. The ISBE computes this figure by dividing the total reported salaries by the total reported days worked for teachers and comparing that to the prior year."

"Some examples of specific errors in the tables:"

2003-2004 salary $20,319
2004-2005 salary $67,448
Increase 231.9%

I suspect that the author simply made a mistake on this one

2003-2004 salary $49,652
2004-2005 salary $68,441
Increase 37.8%

E was a 183 day contract teacher in 03-04 and a 193 day contract Assistant Principal (not a teacher) in 2004-05

2003-2004 salary $47,829
2004-2005 salary $91,172
Increase 90.6%

D was on Leave of Absence for part of the year in 2003-04 and worked 103 days, in 2004-05 she worked the full 183 day contract)

Comment by TH; There were more, but you get the idea.

"The six-year table (indicating salary increases from 2000 to 2006) has the same issues as the individual year tables. The names indicated are a mix of administrators and teachers, and individual staff have different contract lengths. Any “conversion” to a “full work year” does not take this into account."

Some very good posts--interesting info. At the airport.

To Thom

1. This is not a game, rather an exchange of ideas. I express my views and you bluster. I know you are disappointed that the smoking gun does not support the teachers. Worst yet, when it is pointed out that the teachers are getting a good deal, more steam. Rather, put your ideas on paper, let the readers decide. No need to be a Bully and these demeaning antics. My part of Naperville is civil, not an alley.

2. I'm glad you finally acknowledge my point about the $2.2 billion. Now go back and look at despite significant funding in the last five years (including $4.3 billion in 2003), how there were also increases in the unfunded liability. I think there is more of the $2.2 billion AND the full impact of the generous pension increases in the 90's. The legislators could not keep up with the funding needs due to generous benefit increases. The teachers should not complain (the point of this blog), but should be grateful even if they get 75%.

3. You paste how gobs of details from the TRS site relating to the 2.2% and early retirement. I would suggest we go back to my point. Engage an actuary and determine if these benefits are excessive compared to the private sector and now that public sector people are no longer "underpaid". I have stayed away from trying to opine on these issues due to their complexity.

If I read your info on early retirement, people with 35 years of service do not get penalized. Also, the penalty goes away at age 65. True? I do not think you will find these provisions in private sector pensions. But I do not know. Most people I know cash out their pensions in a lump sum and fend for themselves. This is not an option at the state.

One proposal I heard (from Chicago Democrats, no less) would be to freeze all benefits earned to date and cancel the plans. They are concerned that these pensions (along with Medicaid) are bankrupting state and local government. Then they would set up defined contribution plans going forward with funding limited to 20% of salary (employee and employer) (also excluding the amount needed to fund the remaining shortfall for the �frozen� benefits). I suspect this would lower the unfunded liability dramatically. I again note that IBM did this 25 years ago.

Finally, it is not just myself or the other bloggers who are concerned about the higher benefits. It is others including the Chicago Democrats (do you think they will protect teachers in Republican areas?).

4. For your information, WDTA asked Leis to provide the detailed salary information so we would not have to rely on the Champion. He refused. Instead, they snipe at a couple of the teachers. If they REALLY BELIEVED in transparency, they would provide the full details of teacher salary increases and reasons there could be a better policy debate. In general, the number is over 7% (not 5%), do they have a complete explanation of the extra 2%? Doesn't the Board require this information as they negotiate contracts?

KEVIN

You said that the private sector was worst off because they did not have unions. My point to you was look at the private sector for the unionized airlines and steel workers. Except for American and Southwest, the airline workers have all had their pensions substantially reduced.

FOR THE KIDS

1. Thanks for your polite recent posts. A democracy will fail if people are not civil.

2. Check the numbers, I know Thom has.

3. Your quote:

"All teachers deliver the same curriculum." "So, the logical answer would be to spread them (students) all out (based on ability)."

You are absolutely correct on both accounts. That is why I did not send my children to Naperville grade schools (high school was their choice). When I went to public schools in a blue collar, inner ring suburb, nowhere near as affluent as Naperville, the elementary district eliminated the "spread out by ability" and grouped students by ability. Part of it was financial, they could not afford the EXTRA (by the way, more union teacher jobs) pullout teachers. Process was disruptive as well. Everyone did better and students progressed at their own pace.

Rather than focusing on my children when I looked at Naperville public schools, let's look at Mike Jaensch's comments when he moved into District 203. His children (educated in the German school system) were TWO YEARS ahead of the students in their class. What did they do for two years?

Since both 203 and 204 are large districts, why not provide STUDENT CHOICE where students can opt to attend a school with students of all abilities are evenly distributed (as is the current practice) and another where they are grouped by their abilities as is done in many other districts. No more cost. Would the unions oppose such as situation (they AVOID accountability)? By the way, Chicago does this with their magnet schools. But not in Naperville (Except for 1% of the junior high students). The groupings do not need to be limited to the top students (1 to 30%).

4. My writing. I only began to be challenged (writing in particular) when my school "tracked" students. I would have been deplorable had the old system been maintained, like many people I encounter in the business world. I thank the administrators who did not hold me back. More importantly, I had to relearn writing during my work career. It turned out that the private sector wants to train people their own way.

BYE NOW. While Thom keeps reading the materials and posting them here, I think teachers should be grateful rather than complain. They know they have a good deal, now they are trying to protect it

Found this AP article. I think this summarizes the options better than Mr. Higgins.

Ways to deal with Illinois' huge pension debt problem
By RYAN KEITH,AP
Posted: 2008-05-19 16:44:39
SPRINGFIELD, Ill. (AP) - Illinois has the nation's worst pension debt problem, and everyone involved agrees a solution is needed now.

But there are myriad ways to deal with it and no easy choices. A look at the pros and cons of the most-talked about ideas:

1. PENSION BOND: Under this plan pushed by Gov. Rod Blagojevich, the state would borrow $16 billion in lower-interest debt and pump the money into the pension systems.

PROS: The administration says the state could save $55 billion over the next 33 years by essentially trading the 8.5 percent interest pension debt for lower interest debt. This would lower the massive $42 billion debt and make the systems 75 percent funded, providing retirees more certainty about the future.

The state made the same move in 2003, borrowing $10 billion and bringing the systems from 48 percent to 61 percent funded. Blagojevich officials say market conditions are right for another pension bond.

"Something's got to be done," said John Filan, Blagojevich's top budget adviser. "The current situation is just not tolerable."

CONS: Critics, including business groups and Republicans, say borrowing to pay off old debt, even if it's at a lower interest rate, isn't wise. It just puts off the problem.

They say there's also too much risk in a pension bond. It only works if the invested proceeds from the bond get a better return than the interest rate on the amount borrowed, which could be 5 percent a year. In a shaky stock market, critics warn, nothing is guaranteed and the state's pension debt could get even worse.

"This is a craps game, and you shouldn't operate the state's finances based on taking those kinds of risks," said Eden Martin of the civic committee of the Commercial Club of Chicago.

2. INCOME TAX INCREASE: Under this idea backed by some Democratic lawmakers, the state would raise its income tax rate by a couple of percentage points to raise several billion dollars to spend on needs, including paying down pension debt.

PROS: Backers, including some state employee unions, say the pension debt and other budget problems were caused because Illinois simply didn't have enough revenue to cover its bills for many years.

Raising the income tax would bring in enough cash to significantly pay down the pension debt, allowing lawmakers to possibly restructure yearly pension payments and free up cash for more school funding, paying off health care bills and making other needed improvements. Illinois' income tax is low compared to other states, they argue, and citizens would support an increase if the proceeds went to the right priorities.

"We've got to do all those things, and we've got the capacity to do it," said Ralph Martire of the taxpayer watchdog Center on Tax and Budget Accountability.

CONS: A big obstacle is Blagojevich, who has repeatedly vowed to veto any general income or sales tax increase because it's unfair to working people.

Other opponents include Republican lawmakers who argue the state's tax burden is already too high, and raising taxes in a slow economy is foolish. They fear the extra money will go to create new state obligations rather than paying off existing ones.

3. NEW BENEFIT SYSTEM: Under this plan backed by business groups and Republicans, Illinois would switch to a 401(k)-style retirement program that requires the state to pay a defined contribution each year rather than providing employees set benefits.

PROS: Advocates say it would be cheaper to run in the long run because benefit packages could be slimmer. It would ensure the state pays its share of retirement costs each year and give employees more say over their invested money. It would also provide more flexibility for universities to attract out-of-state professors and for employees to take their pensions with them if they leave state employment.

"People get really afraid when you talk about a defined contribution system, but they really shouldn't be," said Sen. Bill Brady, R-Bloomington. "I can't see frankly a downside to it if you do it right."

CONS: Critics, led by teacher and state employee unions, say a contribution system would be more expensive because the state would have two tiers - one for current employees and retirees in the existing system and a new system for new hires.

They contend employees would get worse benefits and would be more vulnerable to poor investment performance. They say it could hurt recruiting into state employment and would do nothing to reduce the current $42 billion debt.

"I just think we're putting people in jeopardy and our economy at stake," said Cinda Klickna, secretary-treasurer of the Illinois Education Association.

Copyright 2008 The Associated Press

to all you teacher, police, and fire bashers: first of all,
just go ahead and home school the little anklebiters, they're probably not the brightest or the most well-behaved if they're chips off your knuckled heads.

Then, when you smell smoke in the house, someone is coming through the window, or you're laying along the side of the road bleeding, just deal with it yourself, ok, instead of calling one of the overpaid, tax sucking hacks. Or, better yet, try calling Social Security or 1-800-FIDELITY, since you think they're so great.

Arthur Andersen
Springfield, IL
Proud Product of the Illinois Public Schools
Active Member FOP

Artie,

Many people already take you up on this. Home schoolers are out performing traditional schools significantly. Is the explanation that the smartest people know the traditional schools are inferior?

Look at California, the teachers union is trying to force people to send their children to such inferior schools. They are trying to take away liberty and choice.

I think you have to wait for the firemen to finish their dinners and the police their lunch breaks. Do we have to overpay people to get the services? A wall street journal article from six years ago point out that fires are down 60 to 70%. They say we can eliminate at least half of the firemen due to better construction materials and techniques and safety awareness.

The REAL Arthur Andersen was vigilent against waste. I doubt that he would support your comments. I said it earlier on this page, pigs get fat, hogs get slaughtered. I doubt if anyone would be complaining if these costs were reasonable. Thank Marshall, Peterson and McGuire.

To Thom Higgins of 11:14 this morning:

To for the sake of being clear and logical, I have to say that picking and choosing a few extreme samples from the Champion data does not invalidate the entire data set.

Another reason I'm not persuaded by your post is that I have lost trust in the administration and school board because of several decisions they have made over the last few years:
1. Rushing through an extension to the teacher's contract right before the SB election in March 2007.
2. When subsequently replacing Jim Caulfield on the SB, no one who actually made the effort to run in the election was even in the top three considered.
3. The last two referendums have cynically manipulated the voter's emotions by threatening music, art, foreign language and sports programs when 80% of the budget goes to salaries.
4. Hiring the pro-union firm, Unicom-Arc, to conduct the "statistically significant" survey to generate biased data in support of the last referendum.

I think for many people, the issue is not that teachers (or police or firefighters) are paid too much. It is that all decisions about how much they should be paid are controlled by unions and their allies. It is not possible to have an honest discussion about the shifting landscape in society in general and education in particular because the union has a stranglehold on the process. The attitude on the part of many that teachers are on the side of the angels and can do no wrong doesn't help, either. The system is out of balance.

By Dan D on June 13, 2008 11:07 AM "KEVIN You said that the private sector was worst off because they did not have unions. My point to you was look at the private sector for the unionized airlines and steel workers. Except for American and Southwest, the airline workers have all had their pensions substantially reduced."

Dan D, I think you have me mixed up with Ken as I have never said that statement above nor have I ever talked about unions on this thread or any thread on this blog. Ken had an entry commenting on unions above and not me. Please make sure you quote the right person before you write your entries, that is how rumors start here. This has happened in the past where people just read the first two letters of Ken's name and then direct their response at me thinking I said it. Please read more carefully in the future. Thank you.

Dan,

Home school children out perform because it is one on one instruction, that is why class size is so important.

To Dan Denys regarding this in your post of June 13, 1107AM

1. This is not a game, rather an exchange of ideas. I express my views and you bluster. I know you are disappointed that the smoking gun does not support the teachers. Worst yet, when it is pointed out that the teachers are getting a good deal, more steam. Rather, put your ideas on paper, let the readers decide. No need to be a Bully and these demeaning antics. My part of Naperville is civil, not an alley.

I suppose you can continually accuse me of bullying and bluster and whatever other adjectives you choose, but I will continue to post responses when you willfully try to mislead readers. To whit;

Your statement;

In 2007 alone, the consultants are noting a net $2.4 BILLION CORRECTION in the $22 billion unfunded liability--a 10% error (page 43 of the report). This could never be funded.

You've made this statement THREE TIMES! In fact, “The $2.4 billion is the actuarial adjustment looking back 5 years to the assumptions then and what actually occurred, and projecting them forward. It is not a one-year adjustment as you have stated rather it is an adjustment of the long-term total obligation of the fund. I believe the $2.4 Billion is part of the $22 Billion total liability. The annual impact on the state is $97 million per year or 1.1% of the $8.8 Billion payroll. Not good, but hardly the same as ongoing $2.4 Billion increases every year.”

Your statement;

1. Teachers in many districts (including 203) have negotiated that their pension contribution of 9.4% is paid by the school district, not as a deduction from their wages like Social Security.

D203 categorically does not pay the 9.4% pension contribution. If a teacher’s salary is $50,000, then 9.4% of that is deducted from $50,000. I cannot speak for other districts in Illinois.

Here’s a great example of realizing you’re caught and trying to change the subject.

1. I never disputed the 9.4% contribution. Rather, the District as a tax scam pays that amount. If you pulled the teachers W-2, a teacher making a $60,000 salary will pay $5,640 to the state pension and retiree health plan. Their W-2 will show a gross TAXABLE salary of $54,360. At a 28% tax bracket, that results in tax savings to the teacher of $1,579.20. If that was a social security employee, the deduction would be $4,590. The W-2 gross TAXABLE income would be $60,000. No tax savings for the regular Joe.

So as a way to slide away from your first misstatement, you make a second one, now it’s a tax scam. Readers understand there is a fundamental difference between claiming that teachers pension contributions are paid for by the district on top of their salaries, and pointing out that the contributions are pre-tax contributions, just like a 401K program with no taxes withheld upon contribution, but requiring you to you pay regular federal income tax when collecting the pension or 401K. So, Dan, are all 401K’s a tax scam too as they operate the same way for tax purposes?

Additionally, if what you are saying was true then your example is wrong. If the district "paid" (your word) the contribution then you would have a $60K salary with an additional $5640 paid out by the district. Tax consequence be damned in that case I guess.

Here are three different issues where you have misstated the facts.

You are free to post whatever you like, you can respond by calling me a bully for calling you on it, but I will not sit back and let you willfully mislead readers. I will, to the best of my ability, and time, refute your untruths.

Want to shut me up? Simple. Then please tell me and the readers here how I am wrong. How the $2.4 billion is just for the year 2007, that in fact D03 does pay the 9.4% pension contribution in addition to the teacher’s salaries. And lastly, please explain how the teacher’s pension and 401K contributions are a tax scam.

Enquiring minds want to know.

Dan D, it was Ken, not Kevin, who spoke in favor of unions. I think his post was spot on. It was management's focus on short term profits rather than improving the quality of their product that led to the current state of the U.S. auto industry. And 9/11, rising fuel prices, and competition from other unionized airlines has led to the current trouble at United, et. al.

Regarding a post on June 13, 2008 @3:47 PM

I have absolute respect for the honesty and professionalism of the new Asst. Supt. of Finance. His point is they have some problems with how they present the data. Many, if not most of the individuals listed are correct. but the following is a problem

Because the list only reports increases – not decreases – in the overall payroll – anyone with a decrease in pay was excluded from the list. And those increases are reported without regard for time worked, extra days worked, extra jobs, or full school year versus partial school year worked. In fact, in the same year the list reports an 8.3% average increase in pay for teachers, the Illinois State Board of Education reports the average teacher pay went up 3.7% for Naperville District 203. The ISBE computes this figure by dividing the total reported salaries by the total reported days worked for teachers and comparing that to the prior year."

Perhaps the question is who do you want to believe the Champion or D203 and ISBE? Hey, do some investigative reporting look at the data from the two sites, call the champion and ISBE and see what they say.

As far as your other comments, God Bless. If you feel they gave away the store to the teachers then you have a reason to be mad I guess. But I strongly feel that the voters made the right decision removing Davitt.

I will always remember his comment on this blog earlier this year where he said "He didn't hate teachers he despised them" Persons that represent that sentiment do not deserve to be on a school board.

As far as Caulfield replacement, I couldn't see either of Davitt's running mates being embraced by the sb if for no other reason than they ran as a ticket to take over the school board. Didn't Deutsch make the top three? He was in the running I remember. A number of QE203.org members wrote letters to the board supporting him. Not a bad guy.

Thom,

I kinda know who Dan D is in terms of the debate, but I don't know where you are coming from.

Are you an employee of the schools or union or something else?

Thanks,

Bubo

Here is some additional information on teachers pension and retirement contributions based on conversations with a teacher and my accountant who does a few teachers returns.

Teachers have the ability to make contributions to a 403B fund that operates in a similar fashion to a 401K program in the private sector.This contribution is before tax just as a 401K contribution. This is taxable upon retirement just as a 401K is. Looks like if you stay an Illinois resident after retiring you do not pay state taxes. However, it does not seem that the district does any kind of matching as is typical on a 401K. I am not 100% sure on this point.

All of the above is separate from the 9.4% they contribute to the TRS system. Remember this contribution is in lieu of Soc. Sec. which teachers do not pay into. The 9.4% is again before taxes, If you look at a pay stub it will show both deductions, assuming the teacher contributes into the 401B too. Morgan Stanley operates the 403B program for D203. Again, as with the 403B program, the Pension amounts received are federally taxable. Illinois does not tax pensions.

If you go to a teachers W-2. Box 5 which is their Medicare wages. it is higher than Box 1, Federal taxable wage. The difference is their contribution to these two funds.

Bubo,

I'm something else.

I am not a teacher, administrator, union person, or vendor to the district. I do have a two friends who are teachers. One in Chicago, one in Wisconsin.

I am a satisfied customer of D203 with two children attending currently.

It was that satisfaction with the education my children are receiving coupled with my alarm at how Mr. Denys and Davitt were attempting to, in my mind, dishonestly frame the debate in order to take over the school board, that led me to become involved in the 2007 sb election and that commitment continues.

I am one of the founding members of QE203.org that formed to oppose the Taxpayers Ticket. If you click my name you will go to our website

By Ken on June 10, 2008 12:31 PM
We pay our cops 20k above the national average and you want us to top it off by giving them an additional 21% towards their pensions.
Check out what Diana posted about cop salaries and benefits on the Ombudsman Thread!

While you are there, check out the area average, which is a little more pertinent. Also check the part where posted information shows Diana's research to be wrong.

____________________________________________________________________

Ken,

I was surprised to find you hiding here. Diana's research has been verified to be very accurate on both the Ombudsmen Thread and the Bailey Rd Bridge Threads. Web Sites of police departments have been copied and pasted on those threads to show Diana was telling the truth and you were misinforming. You could not even get the Naperville starting salary right on those threads, Ken!

I guess you want us to believe the average salary of a Naperville Cop is only $52,000 as you posted, when the Naperville Police Web Site is offering brand new cops nearly 60k for a STARTING SALARY!Your numbers make absolutely no sense. Diana's numbers have stood any test by any blogger so far!

I can't believe you have taken your baloney and posted it on this teacher's thread. As many bloggers noted before me, it seemed like you copied embellished numbers that police unions used to negotiate for higher salaries. That is a well known practice of police unions. Every unions persuades their city council that other police depts. make more money as a tactic to obtain more money. And the cycle never ends with the taxpayers being screwed royally over and over again from town to town!

The starting salary of a Naperville Cop now exceeds that of a starting attorney with 4 years of graduate work. And he gets a 75% pension, gets full health and life benefits, and gets to retire at 52 if he started at 22. Age 51 if he stared at 21! This is a complete failure of our city council.

And the Naperville Firemen are 23.5 million in the hole on their pension fund while the Naperville Police are 27 million in the hole. You could build the 3 new parking decks downtown with that kind of money and have left over money to rebuild all the bridges in town.

I have never seen a City Council who has lost touch with reality. Where is Mr. Dick Furstenau lately to shed some light on this massive failure of his fellow city council members? Why is he not speaking? Did someone muzzle him? Where is Councilman Bob...I thought he was going to help us a little more on this issue? Where is the Mayor to shed some light? Forget the City Manager Marshall, he is not going against his 85k pension while he earns another 179k from the city that pays his pension with mostly taxpayer funds.

Please speak up, CM Dick Furstenau! We have defended you on these blog sites, and we expect you to give us a hand with this police and fire pension mess!

Thank You!

--------------------------------------------------------------------

Host Ted,

Since this issue has become very hot and taken over at least 3 of your threads, could you run an article in your print edition and tie it into its own thread. It seems like it would be a winner!

Regarding Thom Higgins response on June 14, 2008 1:52 AM to my post of June 13, 2008 @3:47 PM:

Perhaps the question is who do you want to believe the Champion or D203 and ISBE? Hey, do some investigative reporting look at the data from the two sites, call the champion and ISBE and see what they say.

It is a little difficult to evaluate the Champion data since I don’t have access to work schedule, stipend, continuing education and retirement information. Nor do I really want to know – teacher’s deserve some privacy! I have looked at the data for a few of those whose schedule, etc I am more familiar with, and the raises are much more than 3.7% per year.

As far as your other comments, God Bless. If you feel they gave away the store to the teachers then you have a reason to be mad I guess. But I strongly feel that the voters made the right decision removing Davitt.

I didn’t say anything about giving away the store or Mike Davitt. My concern is that the contract negotiation in 2005 took at least 6-8 months, and we rushed through the extension in 3 weeks in spite of requests from the community and school board candidates to wait until after the election.

I will always remember his comment on this blog earlier this year where he said "He didn't hate teachers he despised them" Persons that represent that sentiment do not deserve to be on a school board.

Sigh. We know you'll always remember it. However, I didn’t mention anything about Mike Davitt nor am I associated with him in any way.

As far as Caulfield replacement, I couldn't see either of Davitt's running mates being embraced by the sb if for no other reason than they ran as a ticket to take over the school board. Didn't Deutsch make the top three? He was in the running I remember. A number of QE203.org members wrote letters to the board supporting him. Not a bad guy.

I agree, Steve Deutsch earned my vote. Unfortunately, when the SB was choosing a replacement, he didn’t even make the top 8. They were Shane Beard, Michael Cho, Jeff Couch, Nancy Drapalik, Karl Fry, Lynn Hodak, Patti Mathewson and Jackie Romberg.

I find it funny that you disparage the people who “ran as a ticket to take over the school board” when the winners, Suzyn Price, Michael Janesch, and Terry Fielden also ran as a ticket. I received campaign literature promoting all three together that was paid for by a “group” operating out of an apartment near 87th and Washington.

And to be very clear, I am not associated with any of the recent candidates for school board so please don’t try to tar me with the brush you use for them. All of the concerns I have raised are clear, verifiable, non-emotionalized facts. And yes, I noticed that you didn’t comment on the Unicom-Arc survey, probably because there is no defense for it.

We see reams of mostly irrelevant information from Thom. Before I respond to his comments, let me restate my comments to this post.

1. END CURRENT PLAN if the pension benefits are too lucrative (I am assuming they are, but that should be evaluated.) There are many ways to deal with transition ranging from IBM's lump sum payments in lieu of defined benefits to the two tier pension plan currently advocated by the Republicans.

2. ESTABLISH NEW PLAN based on appropriate benefits.

3. FUND ADEQUATELY the above and adjust taxes accordingly.

My over all point is to be FAIR not GENEROUS to employees with out TAX DOLLARS>

Again, Tom points out three obscure comments (NEVER ADDRESSES THE BASIC POINTS ABOVE, you will notice) that "prove" that ANYTHING I or any other person representing taxpayers are wrong. I hate to stoop to his level, but I will attempt to address these comments. I think these are the three concepts.

1. District pays for teachers pensions. My comment is that these payments are "technically" funded by the school districts, so the teacher is "technically" paying nothing to the pension.

The following is a direct quote for St. Charles schools that use this method (from the Chicago Tribune, June 11, 2008)

School officials said the new base salary for a first-year teacher is $40,000, which includes board PAYMENT into the Teachers' Retirement System.

Just a technicality that really does not affect the discussion. But Thom, as I said before, discuss this directly with Zager.

2. For the FOURTH time regarding the $2.4 BILLLION pension liability "adjustment." How could the state pay this bill when they did not know it existed until that report was done? Further, the unfunded liability was ballooning despite massive cash infusions. My point has been that IN RETROSPECT the costs of the benefits were not known, so people could not fund. Imagine getting a "special" electric bill for an extra $5,000 for service from the past five years because the provider did not accurately estimate costs. But again, my point was that the costs are a moving, UPWARD target.

3. The tax scam. Teachers get to "pay" for their 9.4% with pretax dollars. For a $60,000 per year teacher, that results in $1,748 of tax savings (combined 31% state and federal benefit). As Thom recently posted, they also have the option to participate in an equivalent of a 401 k. Private citizens get Social Security plus some type of pension. But private citizens CANNOT get their employer to treat the 7.65% Social Security deduction as tax free income. I advocate that the state tax at least 7.65% of the pension payment to put teachers on the same level as the rest of us. I call all of this the "TAX SCAM." My generalization. It does not appear that Thom understands, but this comment also does not affect my basic plan. Thonm and his accountant should discuss this with Zager.

Finally, Thom again criticizes the information from the Champion.org. He questions. "Perhaps the question is who do you want to believe the Champion or D203 and ISBE?"

Thom, HOW CAN WE BELIEVE D203 WHEN THEY REFUSE TO PROVIDE THE DATA? Again, notice he ignored that comment. Leis and D203 would not provide the same information (public by the way) that the Champion.org does so we can really see the trend in teachers' salaries (AND THE INCREASES IN PENSIONS LATER!!!!!)

. TOTAL LACK OF TRANSPARENCY.

To Kevin, sorry for the wrong reference, should have been Ken. And thanks to those who corrected. Notice that Ken never responded.

Dan,
YOU SAID!!!!!
The District pays for teachers pensions. My comment is that these payments are "technically" funded by the school districts, so the teacher is "technically" paying nothing to the pension
__________________________________________________________________
I am a teacher I PAY $624 a month to teacher retirement!!!!!!!!!!!!!! OUT OF MY CHECK, MY MONEY!!!!!!!!!!!!!!!!!!!!!!!!!! That is my pension!!!!!!!!!! I have no choice that is what they take by law to put in my pension.

GET THE FACTS STRAIGHT!!!!!!!!!!!!!!!!!!!!!!!!!!!!

To By For the Kids

First, you lost your civility. Too much QE203!!!!!!!

Second, it depends on the District. It has been represented to me that only 50% give their teachers preferential tax treatment for pension contributions.

Check your W-2 for the year. If you take your pay over 12 months, your gorss salary would be $79,650 (contract plus stipends, other pay). However, your TAXABLE WAGES would be $72,162 (if you got this benefit). If it is $79,650, you are not getting this benefit. You must have a lousy union representative. However, pension contributions of many teachers (or part of them) are not TAXED!!!!
My point is that if you were in social security in the private sector, the equivalent 7.65% (or $6,093) CANNOT be "paid" by the employer and exempted from tax. For those teachers making $79,650 with that benefit (again you need to check with your union steward or business manager on your situation), they save almost $1,900 in state and Federal taxes, more than the stimulus package.

By the way, who pays those taxes? EVERYONE ELSE!!!!!!!!!!! And teachers do not pay Illinois taxes on that money when they retire. THIS IS COMMONLY REFERRED TO AS A TAX LOOPHOLE!!!!!!!!!!!!

But again, go check with your union. I thought that both 203 and 204 had this benefit.

Dan,
Sorry for the loss of civility.

A sure sign the apocalypse is approaching. Dan Denys and I agree about something?

Dan’s comment earlier;

1. END CURRENT PLAN if the pension benefits are too lucrative (I am assuming they are, but that should be evaluated.) There are many ways to deal with transition ranging from IBM's lump sum payments in lieu of defined benefits to the two tier pension plan currently advocated by the Republicans.

2. ESTABLISH NEW PLAN based on appropriate benefits.

3. FUND ADEQUATELY the above and adjust taxes accordingly.

I agree that if the benefits are too lucrative, they have to be adjusted. I agree that the fund has to be adequately funded. I will say that these words surprise me after all Dan has written above, but no matter. We probably disagree regarding establishing a new plan vs. making adjustments to the existing plan.

Let’s recap a bit.

Teachers currently pay 9.4% of their income to pay for retirement benefits. The deduction is a pre-tax deduction. Part of the contribution is for health benefits and disability. Teachers also pay the same 1.45% into Medicare that we do. These payments are deducted from the teacher’s paycheck. (Denys disagrees) The district pays in a tiny amount too.

The state is currently paying 8-9% of payroll into the fund. This is an elevated amount based on a 15 year plan passed in 1994-95 to “ramp up” payments. This is to help make up for payments the state previously didn’t make over a 15-20 year time span. This is part of a 50-year plan to get funding levels up to 90% of obligations I believe. Payments are supposed to come down in 2011. I would be absolutely willing to say that if it took more than 6.2% to fund the states side of the fund, (assuming no past due payments), I would agree that it should be limited to that amount.

The unfunded liability is $22 Billion. 80+% is from the lack of the state making their payments plus lost investment income. Say 10% is from the change in the long-term actuarial assumptions. (which Dan and I have been arguing over). I don’t know what the rest is.

The system derives significant investment income from professional money managers who invest all contributions. Here are the stats from 2007, in billions.

Teachers 826
school Dist 116
State of Ill 738
Investment income 6,831

So here’s my question. Do we agree that the state owes its back payments, assuming that they would be no higher than the corresponding SS employer contribution of 6.2%? They gotta pay the interest too.

In the same vein, if, going forward the state’s percentage is at or below the 6.2% and, because of the ability to invest the amounts, the teachers get a better deal than we do on SS, is that unfair?

I will make the statement that if the above is true. I have zero problems with the TRS. If, using the same percentage, or less, than an employer would pay into SS on my behalf, based on their contributing more, and investing it all using professional money managers they make more than I will on SS, I say bully for them.

Mr. Denys, what say you? as long as the states contributions are no more than 6.2% are you OK?

Regarding Dan Denys post on June 14, 2008 4:42 PM

Regarding this, 1. District pays for teacher’s pensions. My comment is that these payments are "technically" funded by the school districts, so the teacher is "technically" paying nothing to the pension.

Technically, Smecknically………. As “For the kids” stated it’s deducted from their paycheck, Real deduction, real money, withdrawn.

As far as this, School officials said the new base salary for a first-year teacher is $40,000, which includes board PAYMENT into the Teachers' Retirement System.

So, are you saying the 9.4% is on top of the $40,000? If so, then indeed, the board would be actually making the payment, and the teacher would in essense be getting 9.4% more real income than what their stated salary was. But, only if it is additional dollars above the $40,000.00. If what the article is saying is the 9.4% is included in the $40,000, then I say it is being deducted from the teachers paycheck.

Regarding this 2. For the FOURTH time regarding the $2.4 BILLLION pension liability "adjustment." How could the state pay this bill when they did not know it existed until that report was done?

Slip sliding away, Dan, slip sliding away. Here, once again, are your three original quotes;

f you skim the TRS actuaries reports I linked (I look for key points and did not read them in detail do to time, so I qualify my comments accordingly), you will note that "events" (essentially actions by local school districts on salary increases, severence packages, sick pay credits, etc.) caused a $2 billion INCREASE in the unfunded liability in 2007 ALONE.

…Now it is the explosion in benefits. In 2007, and extra $2.2 billion ALONE!!!!

In 2007 alone, the consultants are noting a net $2.4 BILLION CORRECTION in the $22 billion unfunded liability--a 10% error (page 43 of the report). This could never be funded..

It’s the use of the word Alone, and the clear attempt to make the reader believe that only one year’s increase in costs caused the deficit to increase $2.4 Billion, that gets you in trouble. Clearly as I have indicated, it was an actuarial adjustment to the assumptions going forward. Costs are not rising $2.4 billon annually as you are implying and hope the reader believes.

Regarding this, 3. The tax scam. Teachers get to "pay" for their 9.4% with pretax dollars……But private citizens CANNOT get their employer to treat the 7.65% Social Security deduction as tax free income.(TH here, if you want to characterize this correctly you have to say llinois state income tax free, they do pay federal taxes on it) I advocate that the state tax at least 7.65% of the pension payment to put teachers on the same level as the rest of us.

And I’ll throw this in from a later post. Second, it depends on the District. It has been represented to me that only 50% give their teachers preferential tax treatment for pension contributions.

What Mr. Denys conveniently forgets to mention is that the teachers pension works just like a 401K, (you get to fund with pre-tax dollars, but when you receive the pension you pay regular Federal taxes on it), with SS you are taxed on the contribution, but your payments are not taxed. I know there are some caveats to that if you work over a certain amount.

It would be good if Mr. Denys would confirm that what he is saying is because the pension payments upon retirement are Illinois Sate income tax free, then they should pay Illinois taxes up front. If so, then I’m OK with that, I'd just like it spelled out more clearly.

The comment that only 50% give their teachers preferential tax treatment confuses me. They have to follow IRS and Ill Regs. If they way the SD structures the contribution payment, can cause a change in the tax status of the payment, then what about at the other end? Is he telling us that a teacher could, 50% of the time, actually pay taxes on the contribution, and then have to pay again after retiring? Can’t believe that. And I can’t believe that fed’s would allow the ambiguity.

Lastly this, Thom, HOW CAN WE BELIEVE D203 WHEN THEY REFUSE TO PROVIDE THE DATA? Again, notice he ignored that comment. Leis and D203 would not provide the same information (public by the way) that the Champion.org does so we can really see the trend in teachers' salaries (AND THE INCREASES IN PENSIONS LATER!!!!!)

Will you please give us the whole story in detail? Did you ask verbally? In writing? When? What was Dr. Leis’ response? Do you have it in writing?

For Anonymous on June 14, 2008 4:16 PM

Regarding this, I have looked at the data for a few of those whose schedule, etc I am more familiar with, and the raises are much more than 3.7% per year.

It's the totality that matters, and if the Champion is not taking into account properly the issues raised by Zager, then it's "garbage in garbage out" Again, someone ask the Champion people to comment on this, otherwise it's only you and me, and we don't know.

Regarding this, My concern is that the contract negotiation in 2005 took at least 6-8 months, and we rushed through the extension in 3 weeks in spite of requests from the community and school board candidates to wait until after the election.

This sounds like damned if you do, damned if you don't. You want it to take longer and be more contentious? If the district had decided that they needed to slip in some big increases in order to get them done before a new board was seated, Yeah, that's wrong, and I'd be screaming about it.

It's no secret that Davitt wanted to re-open the teachers contract and force salary reductions on the teachers, and yes certain residents might have wanted to see what Davitt and the rest could negotiate, but I have to be true to my bedrock belief that had they succeeded it would have been chaos, and the residents would have gone crazy.

Regarding this, I find it funny that you disparage the people who “ran as a ticket to take over the school board” when the winners, Suzyn Price, Michael Janesch, and Terry Fielden also ran as a ticket. I received campaign literature promoting all three together that was paid for by a “group” operating out of an apartment near 87th and Washington.

They did not run as a ticket. There were never any joint signs with all three names on them, or joint advertising paid for by the three collectivelly. They ran individually, had separate campaigns, with separate funding, and separate campaign reporting to the state. That makes them separate. The TT had joint everything including reporting to the state.

QE203.org and the PURE group endorsed Price, etc., and ran ads with the three names, not the candidates. And yeah, I have a problem with any group wanting to take over the SB and take an exceptional school district and gut it so they can save a few bucks on their taxes, and because they don't believe in the premise of public education.

Lastly this,

And to be very clear, I am not associated with any of the recent candidates for school board so please don’t try to tar me with the brush you use for them. All of the concerns I have raised are clear, verifiable, non-emotionalized facts. And yes, I noticed that you didn’t comment on the Unicom-Arc survey, probably because there is no defense for it.

I never said you were associated with, or tried to tar you in that manner. Although I like the verb as it relates to them.

As far as Unicom. I get it, they do work for people you probably don't like too much. To you, that makes the results invalid. As I said initially, God bless.

To all posters who direct posts my way. Not responding does not mean I necessarily agree with your point. I could spend my life parsing all the things I disagree with. You have to pick you battles. I also like to be sure of my facts before I respond.

Where does this anger toward teachers come from? NOTHING in life is free. Teacher or not, everyone has to spend wisely and save even more wisely. It's not always at the expense of the state or taxpayer.

Thom - I appreciate your efforts in trying to sort all this out. As you said, we have to pick our battles. The poor horse has been beaten beyond recognition here. There is much misinformation, as you've stated with facts and clarity. Some people will never get it because they choose not to. They need to have the last word, and be right. Nothing we can do. On to other business. Thanks for trying and being supportive of the schools. You are a rare breed around here.

For the Kids - People will always think that they know exactly what the teachers' pay, benefits, job, retirement, etc., entails. There isn't anything teachers, can say or do to convince them otherwise because as taxpayers, they can't see past the tax bill and the portion that goes to the schools. In their minds, public servancy is akin to slavery, indentured or otherwise. They truly believe those who work for the public do not deserve a paycheck, and they are angry. Public servants don't have a right to defend themselves. Plain and simple, nothing to be done about it. On to other things. Thank you, too. After all, when it comes to education, it is all about the children, or at least it should be. I don't even know how anyone can quantify that.

It's curious to me, why no one has answered the question: If the job of teaching is such a cakewalk, why aren't you out there being a one (or a police officer, fireperson, any public servant for that matter)? Really, it's just glorified baby-sitting, isn't that what you all think? I can guarantee some of you who posted above would stab your eyeballs out by lunch, and run screaming from the building never to return if you made it further in the day than that. Until you've walked a mile.......you have no right. NONE.

One last time, teachers in Illinois contribute to TRS with 9.4% of their OWN pretax salary dollars, just like any other pension fund. This is not a paycheck deduction. The 9.4% is taken off the top,from the start, and then, a teacher lives 12 months (not 9!) of the year on that taxable salary. Just like any other pension/retirement account, when the recipient begins to draw from it, they pay taxes on those monies. IF a district contributes, AND THAT IS AN IF - not a given - it is grouped into the total, negotiated salary package. It is not a separate, or on top of, benefit or perk. Usually, if the district offers to make contributins to the pension fund - something most employers do in industry, which I bet some of you enjoy as part of your own salary packages - it goes along with freezing the pay scale for the duration of the contract, which could be anywhere from 1-5 years, or more. How many of you would agree to no raise for "x" amount of time? You'd go look for another job! Unless you sit at the negotiating table, you have NO IDEA what goes on in a bargaining session. If some of you had to go through that process, you'd most likely be sitting in a corner now, sucking your thumb. Quit thinking that whatever the paper quotes as the "offer" is fact. The "whatever" percentage reported as raise money is a TOTAL PACKAGE percentage (insurance, retirement, etc.). IT'S NOT ALL PURE DOLLAR MONEY, AND IT DOESN'T APPLY TO EVERY TEACHER ON THE PAY SCALE. If you are fond of statistics, grab a copy of the pay scales (they are available) and do the math. You just might have your eyes opened.

On a side note, teachers are taxpayers too. If they live in the district where they teach, they are in essence, paying part of their own salary. Hmmmm.

Further, TRS does not allow for those who have pensions with the system to decide how their own pension dollars are allocated . Those of you who have 401k have that right and luxury. Quit blaming the teachers if the state is in the hole. The state did the math, it's coming up wrong, and people who dedicated their lives to a career they believed in are going to be the ones who suffer for it. Currently, active teachers are required to pay into a healthcare fund for retired teachers because the state screwed up so badly. Do you even know or care about that? Those retired teachers earned the benefit (just like Lucent people, or United Airlines, etc.), and there isn't enough money to go around. Do you people really think that the teachers screwed themselves? Current teachers won't have a prayer when it comes to a retirement healthcare benefit. Medicare doesn't pay for everything you know. Start saving now for hearing aids ($4000 -not a typo) because you, your parents/grandparents are all on your own if you need them later.

As far as Social Security, teachers do not pay into it. Nor are they able to collect it, unless they earned it through working other jobs and paid into that system. Furthermore, if you think that a retired teacher can sit back and collect the SS benefits of his/her spouse, your brain cells haven't met in quite some time. Why do you think 70+ retired teachers re-enter the work force? Because they collect a teacher's pension, they are no longer entitled to the SS benefits of their dead spouse. Their dead husband or wife's SURVIVOR BENEFITS. You'd think they'd be entitled to that, wouldn't you? Some of you really need to go talk to retirees. God help you all when your parents/grandparents reach their golden years. You obviously have no idea what's coming.

Oh, keep reading The Champion though, that might help you when your parents are trying to decide between generic or name brand cat food for their meals.

Instead of compaining about education/educators, why don't you at the very least, get one or thank one. Maybe, just maybe, your children might not in live your basements as adults because of the people along the way who decided they could, and did

The Thom Higgins saga continues!!!!!!!!!!

Let’s briefly summarize.

HE AGREES WITH MY THREE STEPS.

We should just stop there and stop our keyboards. He goes on to say, maybe not all of the details. I (and all of us) should have no problem with this. That is why this is America.

Too bad Thom does not address the issues rather than attacking the writer.

*************

Thom does go on to address some specific points. I will give my reaction.

1. “ Do we agree that the state owes its back payments, assuming that they would be no higher than the corresponding SS employer contribution of 6.2%? They gotta pay the interest too.”

This whole funding issue is VERY complex. That is why I call on the experts to outline alternatives.

I tried to review the numbers and it is unusual. There was a plan to increase funding to the pension plans. In fact, the last year of Republican leadership (2004 budget year), funding for TRS was over $1 billion (page 94 of the TRS annual report) or 13.98% of salaries (page 96). Had we stayed with this plan, consistent with 1995 legislation, there would not be issues (except maybe in the inadequate actuarial estimation of costs).

Blago issued pension bonds and provided the system with additional funding of $4.3 billion in his first elected year. The tradeoff was lower subsequent contributions. Even at these lower levels, the contributions exceeds your 6.2% (11.76 in 2005, 6.75% in 2006 and 9.26% in 2007) (page 96).

But I will not “bully” here. The key is that TRS is MORE than social security, the benefits are substantially more. So the payments have to be more if benefits are to be maintained. I am concerned that the 2009 budget is out of balance by $2 billion. I think we need to reign in costs particularly Medicaid rather than increasing spending.

2. “as long as the states contributions are no more than 6.2% are you OK?”

As noted above, this is not realistic.

3. “ with SS you are taxed on the contribution, but your payments are not taxed.”

Thom, a dirty little secret. If your income when you retire including social security is over $35,000 ($25,000 for single people), social security will also be taxed. I have not calculated future benefits, but I suspect that 70% of the middle class (and 100% of the upper class) will be paying taxes on money they were taxed before.

4. “The pension payments upon retirement are Illinois Sate income tax free, then they should pay Illinois taxes up front. If so, then I am OK with that.”

This whole topic is a peripheral issue. But that is one solution that I offered. The extra taxes could be set aside to fund the liability. And again, technically, the District is paying the benefit. I think he is finally following my point after numerous belligerent attacks.

5. “Is he telling us that a teacher could, 50% of the time, actually pay taxes on the contribution?”

No, not all school districts have this option (I guessed at 50%, the actual number really does not matter). This was started in the 80’s in Chicago. They gave this benefit instead of a salary increase. The tax savings funded the salary increase with no increase to the Chicago taxpayers. I do not think that all suburban districts participate. If they do, then 100% of their teachers must select the option.

6. “Will you please give us the whole story in detail? Did you ask verbally? In writing? When? What was Dr. Leis’s response? Do you have it in writing?”

This matter came up during the election. One teachers wife complained that we annualized his salary even though it included summer pay. I forwarded the e-mail and asked Leis to provide this information. Remember, the Champion.org compiles this information from information that the District sends ISBE and TRS. He ignored. I also asked Albus before, his comment is that this information should remain private and would not provide. All of this notwithstanding the fact that teachers expose themselves to public disclosure by taking taxpayer money. Others have asked as well.

If the District cared about transparency, they would provide this information unilaterally rather than criticizing a couple of details. Maybe you would want to get this information rather than perpetuating confusing information.

7. “It’s no secret that Davitt wanted to re-open the teachers contract and force salary reductions on the teachers”

A revisionist view on the election. This was NEVER part of Mike’s or the Taxpayer Ticket policy. It was never written, PERIOD. Instead, we advocated the following:

a. Transparency in all future teachers negotiations. Maintain the elimination of the severance policies in the 2003 contract (instead, the benefit was EXTENDED at the midnight hour BEFORE THE ELECTION!!!!!!!). Balance salary increases (does this sound like a reduction) to that of the private sector.

b. Return the excess tax collections THAT WERE NOT SPENT. Unfortunately, we could not reinstate the District’s $511 pledge (articulated 50 times by District employee Allen Albus) since it was a LIE. (By the way, the District covered this low moment in its history with the Capital Program.)

c. Improve education, extend the elementary school day, immediately implement foreign language for all students, eliminate wasted time at the high school level.

d. Implement process for immediate feedback to further improve schools. Parents provide teacher evaluations, process for recommendations, etc.

8. “ QE203.org and the PURE group endorsed Price, etc., and ran ads with the three names, not the candidates. And to be very clear, I am not associated with any of the recent candidates for school board so please don’t try to tar me with the brush you use for them.”

In an earlier blog, you said you were QE203. What post is correct?

Regarding Dan Denys comments of June 15, 2008 2:31 PM

Regarding this;

HE AGREES WITH MY THREE STEPS.

Well, not entirely, but it would be nice if we truly were close. You missed this “We probably disagree regarding establishing a new plan vs. making adjustments to the existing plan. And it has to be established that the pension benefits are too generous after the state kicks in an amount equivalent to the 6.2 SS contribution and any past due amounts plus interest, for me to agree to benefit cuts.

Regarding this;

The key is that TRS is MORE than social security, the benefits are substantially more. So the payments have to be more if benefits are to be maintained.

For someone who makes his living in finance how can you forget the fact that the TRS uses professional money managers to invest all contribution? By definition they can pay far, far, more generous benefits, than SS.

As I said before if the system can offer more generous benefits based on investment income and larger teacher contributions, after we kick in 6.2%, bully for them. You are being more than a little disingenuous by ignoring investment income.

Regarding this,

3. “ With SS you are taxed on the contribution, but your payments are not taxed.”

You are quoting me here. It would be nice if you didn’t selectively edit my paragraphs. Here is the entire thought

What Mr. Denys conveniently forgets to mention is that the teachers pension works just like a 401K, (you get to fund with pre-tax dollars, but when you receive the pension you pay regular Federal taxes on it), with SS you are taxed on the contribution, but your payments are not taxed. I know there are some caveats to that if you work over a certain amount.

Regarding your response to my comment here;

“The pension payments upon retirement are Illinois Sate income tax free, then they should pay Illinois taxes up front. If so, then I am OK with that.”

Your response:

This whole topic is a peripheral issue. But that is one solution that I offered. The extra taxes could be set aside to fund the liability. And again, technically, the District is paying the benefit. I think he is finally following my point after numerous belligerent attacks.

Belligerent attacks? All I was doing is pointing out your misleading statements such as the following;

Rather, that amount is paid by the District as a tax scam. If you pulled the teachers W-2, a teacher making a $60,000 salary will pay $5,640 to the state pension and retiree health plan. Their W-2 will show a gross TAXABLE salary of $54,360. At a 28% tax bracket, that results in tax savings to the teacher of $1,579.20. If that was a social security employee, the deduction would be $4,590. The W-2 gross TAXABLE income would be $60,000. No tax savings for the regular Joe.

3. The tax scam. Teachers get to "pay" for their 9.4% with pretax dollars……But private citizens CANNOT get their employer to treat the 7.65% Social Security deduction as tax free income.(TH here, what you should really say is "as pre tax deduction" not "tax free income".) I advocate that the state tax at least 7.65% of the pension payment (you mean deduction not payment) to put teachers on the same level as the rest of us.

“Tax scam” your words. And why all this angst? Because the pension contribution is treated the same as a 401K. It is a pre-tax deduction that they pay federal income tax on when collecting, but they get a 3% break on Illinois taxes.

At least here below you’re down to calling it a tax loophole, and admitting it’s only state income tax exempt.

.By the way, who pays those taxes? EVERYONE ELSE!!!!!!!!!!! And teachers do not pay Illinois taxes on that money when they retire. THIS IS COMMONLY REFERRED TO AS A TAX LOOPHOLE!!!!!!!!!!!!

You could have saved us a lot of time and aggravation if you simply said, “I think it’s unfair that teachers pensions get favorable tax treatment by the state of Illinois as they are exempt on Illinois state income taxes”. Fine, OK. I agree. But instead you make these long hopelessly convoluted statements with adjectives like “tax scam” and insert phrases that imply that the teachers pension is completely tax free, with the hope, that people will believe you that the teachers are getting to good a deal. Same for all the angst because it's pre tax up front.

Also, all the BS regarding how some districts "pay" the teachers contribution. It's meaningless to the discussion except for your hope that the casual reader will think that means teachers get a 9.4% freebie on top of their salaries.

Regarding this about your e-mail to Dr. Leis;

.This matter came up during the election. One teachers wife complained that we annualized his salary even though it included summer pay. I forwarded the e-mail and asked Leis to provide this information. Remember, the Champion.org compiles this information from information that the District sends ISBE and TRS. He ignored. I also asked Albus before, his comment is that this information should remain private and would not provide. All of this notwithstanding the fact that teachers expose themselves to public disclosure by taking taxpayer money. Others have asked as well.

Did you send the e-mail only once? Do you still have it? Then please post it. You must have had phone conversations or face-to-face meeting with Dr.Leis after you sent the e-mail. Did you never follow up then? Do the others you mention have any written responses they can provide?

Regarding this;

.7. “It’s no secret that Davitt wanted to re-open the teachers contract and force salary reductions on the teachers”
A revisionist view on the election. This was NEVER part of Mike’s or the Taxpayer Ticket policy. It was never written, PERIOD. Instead, we advocated the following.......

I don’t know if I could get anyone to go on the record who heard that statement, so allow me to revise the comment to say “based on conversations with people who talked to the Taxpayers Ticket candidates, it was relayed to us that Davitt wanted to re-open the contract and force salary reductions on teachers”. While I agree this was never put in writing, the antipathy for teachers and the school district was on full display during the campaign.

For anyone who’s interested we archived the taxpayers ticket website here;
http://www.qualityeducation203.org/taxpayersticket/tt_intro.shtml
Also, http://www.mikedavitt.com/ is still alive, and you might want to click on http://hold203accountable.org/ . This is an anonymous website, which is also registered anonymously. If you read the other two sites I think you can make an informed guess as to who operates this last one.

Lastly this;

.8. “ QE203.org and the PURE group endorsed Price, etc., and ran ads with the three names, not the candidates. And to be very clear, I am not associated with any of the recent candidates for school board so please don’t try to tar me with the brush you use for them.”

In an earlier blog, you said you were QE203. What post is correct?

Well first, let’s be very, very, clear that you have placed two sentences together from two separate paragraphs. They do not belong together. For some reason the HTML tags didn’t take, so the italics I typically use to show another persons comment did not appear “To be clear I am not associated with any of the recent candidates for school board so please don’t try to tar me with the brush you use for them.” was a statement from another poster, who I was responding to. If you read the post carefully at all I would expect you should have understood that. I am of course part of QE203.org.

Mr. Higgins,

Don't forget to post the response from Councilman Bob regarding City Pensions. Taxpayer contributions for police and fire are 21.16%.

Those pensions are 50.5 million dollars in the red just for the City of Naperville. Employees can retire at age 51 with 30 years of service and get 75% of their final salary as a retirement pension.

The situation is much worse than the schools...the salaries are much higher than those of the teachers.

I think you are missing the boat if you want to save us taxpayers money! The teachers' pensions are baby pensions compared to police and firemen pensions.

Thank you!

Mr. Higgins,

Don't forget to post the response from Councilman Bob regarding City Pensions. Taxpayer contributions for police and fire are 21.16%.

Those pensions are 50.5 million dollars in the red just for the City of Naperville. Employees can retire at age 51 with 30 years of service and get 75% of their final salary as a retirement pension.

The situation is much worse than the schools...the salaries are much higher than those of the teachers.

I think you are missing the boat if you want to save us taxpayers money! The teachers' pensions are baby pensions compared to police and firemen pensions.

Thank you!

To all,

As to this post, I said that Thom agreed with my three points in general, but not all the detials. That is the most important point. All the rest is really irrelevant.

These are just comments on the rest of his comments that should be considered.

1. He totally missed my comment on social security. But again, many people are NOT aware of this provision. So I will repeat this.

Thom refers to the time from 65 (to be 68) until age 72 (?) where you lose some of your social security benefits if you have earnings. Agreed.

I was refering to the TAXATION of Social Security earnings (refer to page 25 of the 2007 Form 1040 instructions--Thom's accoutant should have that). If a retirees income from interest and dividends, pensions, 401ks, AND SOCIAL SECURITY exceeds $25,000 ($32,000 for a married couple), the Social Security benefits are taxed. Today, even a retiree with modest assets and income gets hit by this tax. All of us will be hit by this tax as we retire. This was someone's plan to help bail out the social security system. And this provision has not been indexed for inflation.

For most retirees with pension plans (and 401ks), this provision will make 85% of social security benefits subject to tax. If you are at the border line, this tax results in retirees paying the highest marginal tax rate--almost 50%.

2. I thought Thom was getting the tax deduction issue. Thom, just ask your accountant one question.

"Is there any action that a private company can take so an employee would not have to pay Federal and state income taxes on the employee 7.65% FICA contribution?"

If he knows of a way, send me his contact info since I will pay him to implement that procedure for my company (would love to save $3,000 in taxes. However, the teachers pre tax treatment of their contribution is NOT the same as a 401k contribution. A 401K contribution comes out AFTER the 7.65% FICA payment.

3. I do not find anything on either of the two web sites that advocate teacher salary reductions. Instead, both web sites criticize excessive spending. I do not mind if you do not agree with another's position, but do not misrepresent the position.

While most people are lucky to keep their job and if they do, barely get CPI, teachers have exceeded these amounts. I agree that teachers were underpaid through the 80's. But not now. The most authoritative site is the Bureau of Labor Statistics that indicate that teachers are one of the highest paid white collar professions.

To all of those posts about others having to become teachers, I did not do so primarily because there were NO teaching jobs in the late 70's and early 80's coupled with the low pay and that you had to join a UNION. A job that forces you to be in a union is against my beliefs. That is why business shuns Illinois since it is not a right to work state.

4. I will send Leis another e-mail to see if he will provide the information.

Missed one point. TRS can pay more since they "invest" their money.

Social Security was designed as a "pension plan". Originally, when the plan was set for benefits at age 65, the life expectancy of a worker at age 40 was 63. Social security was structured to pay little.

We can all look to history (we lived through much of it) and note that as people lived longer, the social security age was not increased. The government saw the huge accumulation of funds in social security and substantially increased benefits particularly in the 60's.

Then people realized we would not be able to sustain the system. The actuaries calculated that the old pay as you go plan would not work. Just like in Germany in the late 1800's and Japan in the 1990's. ACTUARIALLY, something had to be changed, either benefits decreased or taxes increased.

To date, benefits have been decreased (only modestly) by delaying the retirement age (in progress) and increasing taxes particularly the benefits that I keep referring to. The benefits that Social Security provides are much more than what people paid in, just like a pension plan, including TRS.

But with Social Security, the MAXIMUM BENEFIT is $26,220. This benefit is based on the current payroll deduction of 12.4% that funds the payments (the balance funds Medicare) and is based on $98,000 of salary income. We established that TRS is being funded at a rate between 16% and 20% (depending on the year, the pension bonds, etc). From page 59 of the actuarial report, the average TRS benefit was $43,171. And this is probably based on a salary level lower than the maximum FICA amounts (not all teachers are paid like Naperville).

The point is that the benefits from TRS are SUPERIOR. Using the actuarial numbers, the contribution percentages have to be significantly more. At least two if not three times more than Social Security (24 to 36%).

By the way, this also illustrates that if Americans could invest their own funds rather than be forced into a government welfare plan, they would be better off. But that is another blog.

For all of you who think thechampion.org is a valid source of information, please take a look at this link.
http://www.thechampion.org/article.asp?id=1071

The writer is attempting to state that teachers are overpaid. The problem is he inflates the teachers salary 40%. He starts out saying the teacher makes $54,00 a year and thats not enough so we will base our example on $75,000. He then goes on to state that this particular teacher is over paid at $75,000. Yet the teacher only makes $54,000. Unfortunately if you want to be considered a valid source of information you must present the truth...

Thom,

Mike Davitt never told anyone he would reopen the contracts. His concern is how to RATIONALLY deal with a union that stops negotiating from June 1 until the day before school and holds the District hostage. (By the way, he was also concerned about the sweetheart agreement that extended the contract and reinstated the retirement benefit the union had agreed to stop in return for an above average salary increase).

His thought that the only option would be to take a strike. However, we found a great example in Salt Creek school district where our former school board President was a UNION MILITANT. When he tried to use the same tactics, that school board (historically a blue collar area of Villa Park, Oak Brook Terrace and unincorporated areas) stood up to his antics. The union refused to negotiate. In fact, the school board put a contract on the table with 9% increases for teachers with less than 10 years experience, 3% above 10 years, no retirement and the union would not allow the membership to vote--since the young teachers in the majority would have approved it.

So Salt Creek, in accordance with FEDERAL LABOR LAWS declared and impasse and invoked their contract. No pay cuts, no firing of teachers, only a reasonable contract with pay increases to the teachers who most needed them. The teachers only recourse would be to ask for new negotiations. If they went on strike, they FEDERAL LAW would deem that action to violate labor laws and they would lose their jobs.

By the way, the District's contract was subsequently put to a vote and received 75% approval.

Is this the only road map for 203? No, but NEVER did Mike Davitt say he would fire the teachers or CUT their salaries. He wanted a reasonable negotiation. PERIOD.

And Leis made a comment to the WDTA that he could not aggressively negotiate with the teachers since he had to work with them. Fine. Have an outside party do the work just like the teachers. The school board went after the bus drivers, I thought that a salary freeze was in order, they cut their salary 16%. If there is a will there is a way.

To Annonymous June 15 4:31 AM

First, I am concerned about you and Thom, you should be sleeping at these times.

Second, this blog is about TEACHERS PENSIONS, not police pensions.

Third, notwithstanding the point of the blog, I think that BOTH pensions will kill the taxpayer. You are concerned about a $51 million deficit for 140,000 ($364 per resident), we have a $22 BILLION deficit for 11 million people ($2,000 per resident). And there are far fewer taxpayers than residents.

Fourth, the causes are identical. Benefits are approved by the state without adequate funding. The solutions are the same for both.

Anonymous on June 16, 2008 9:31 AM,

Your analysis is off because you fail to read, or comprehend this: "Let's assume that Mr. Husband would agree that a 40 percent increase, to $75,000 a year, would put his wife at or near "private industry salaries." That would put her $300-a-day teacher salary just slightly lower than her $312-a-day private industry salary because in the real world people work 12 months or 240 days a year not nine months or 180 days a year."

In this statement, he is comparing a private industry salary where someone would even 75K. However, in this example, the author is also using this to show that a teacher does not work a full year and therefore makes an adjustment to the salary figure based on that fact.

aren't you all done with this by now

He/She says it perfectly! Everyone go back and read that post !

Dan -

Teachers are NOT forced to join a union. Never have been. Are you for real? There were plenty of teaching jobs in the late 70s/80s. Districts couldn't find enough teachers. When was the last time you saw the sun?

Regarding this;

Don't forget to post the response from Councilman Bob regarding City Pensions. Taxpayer contributions for police and fire are 21.16%.

As soon as I receive a response I will post it verbatim.

Response to Thom Higgins on June 15, 2008 1:39 AM

Regarding this, My concern is that the contract negotiation in 2005 took at least 6-8 months, and we rushed through the extension in 3 weeks in spite of requests from the community and school board candidates to wait until after the election. This sounds like damned if you do, damned if you don't. You want it to take longer and be more contentious? If the district had decided that they needed to slip in some big increases in order to get them done before a new board was seated, Yeah, that's wrong, and I'd be screaming about it.
Why are you assuming that negotiating the contract when it ended this year would be more contentious than rushing through an extension right before the election? Why is there this implicit assumption on the part of many that the School Board is the only one responsible for making the process less contentious?

QE203.org and the PURE group endorsed Price, etc., and ran ads with the three names, not the candidates.
So does that mean you didn’t check with the three candidates before you mailed out literature with their names on it? And they had no input into what you said about them? If it walks like a duck and quacks like a duck…

I never said you were associated with, or tried to tar you in that manner. Although I like the verb as it relates to them.
And yet, you inserted Mike Davitt’s name numerous times in irrelevant ways in response to a post that never mentioned him. If that’s not an attempt at guilt by association, I don’t know what is.

To aren't you all done with this by now?:
Asking questions about how decisions are made in an organization spending $200 million a year of the public’s money does not make one anti-teacher.

Regarding Dan Denys posts earlier today.

The only substantive comment that Dan has made is that when teachers receive their pension payments after retiring, they do not pay Illinois state income tax.

The income tax provisions on SS are not very taxpayer friendly. We all know that. But the fact remains that a teachers pension functions, on the contribution side, just like a 401K and a 403B, in that it is pre tax dollars, and once retired, teachers pay federal income taxes, just like a 401K and 403B plan. As mentioned above they get the benefit on not paying Illinois state income taxes on the retirement benefit. If the state elected to tax the pension payments I’d be OK with that.

But all this Sturm und Drang, paragraph after paragraph, ranting about TAX SCAMS and TAX LOOPHOLES!!!!!!, Districts making the teachers pension contribution for them, and gee I really, really, wish I could get this tax benefit for my SS contribution is just silly, and profoundly misleading. As is complaining that SS benefits are inferior to the teachers pension, so let’s chuck the system. As I’ve said countless times before, and Dan somewhat acknowledged today, they have professional money managers investing the funds. If they can make the numbers work, based on the higher teacher contribution, investment income, and a state payment no more than the equivalent 6.2% employers pay into our accounts then bully for them. And before Denys replies, I mean 6.2% assuming no need to make up for payments missed in the past.

Ultimately there are two questions that need to be answered. Actuarially, can the TRS make it’s payments with the 9.4% the teachers pay, their investment income, and no more than 6.2% from the state. I’ll bet the answer is yes.

The second question is the tough one. Even if the teachers and other state pension holders are well and truly entitled to the $42 billion the system is under funded, will the state be able to cough up the dough? This is the $42 billion dollar question.

Davitt? It’s getting to be ancient history a bit, but for someone such as myself who reads the various websites, and his LTE’s and stared in amazement his comment about how “he didn’t hate teachers, he despised them”, well, I have to question how “RATIONALLY”, your word, he would have conducted negotiations with them.

As far as the salary data, I will ask for it also..

To Anonymous on June 16, 2008 5:28 PM:

I don't think anyone said anything about being "anti-teacher" in that post because people are asking questions.

To Anonymous on June 16, 2008 5:28 PM

Regarding this

Why is there this implicit assumption on the part of many that the School Board is the only one responsible for making the process less contentious?

I do not see where you are getting this from my comments directly or implied.

Regarding this.

So does that mean you didn’t check with the three candidates before you mailed out literature with their names on it? And they had no input into what you said about them? If it walks like a duck and quacks like a duck…

Qe203.org had a website, ran newspaper ads, and I think we also handed things out at the train station and no, we didn't clear it with the three. Frankly we were more focused on the Taxpayers ticket than lauding the three. We formed not to support the three but to make people aware of the danger the TT represented. Look at our website it's still up.

Regarding this,

And yet, you inserted Mike Davitt’s name numerous times in irrelevant ways in response to a post that never mentioned him. If that’s not an attempt at guilt by association, I don’t know what is.

Sincerely, if you think I'm trying to tie you to Davitt in my comments, I don't see it, and I certainly was not. You were talking about your dis-satisfaction with the School Board agreeing to a contract extension, you also expressed general distrust for the board. Davitt was on that very board, and my point was, although you are unhappy with that board, I approve it's actions, even though, as I remember it, Davitt voted against the extension, and strenuously complained about it. So to me the thought flowed and made sense. Regardless, I was unconditionally not tying you to him.

Your analysis is off because you fail to read, or comprehend this: "Let's assume that Mr. Husband would agree that a 40 percent increase, to $75,000 a year, would put his wife at or near "private industry salaries." That would put her $300-a-day teacher salary just slightly lower than her $312-a-day private industry salary because in the real world people work 12 months or 240 days a year not nine months or 180 days a year."

Its still flawed, there are assumptions made that are not based in fact. Here is my analysis; teachers work almost as much as a year round employee. For example Teachers do not get vacation days. So lets subtract 4 weeks of vacation from the year round workers hours, so that worker is now working 220 days a year. My wife is a teacher at the high school level in another district. They've been out of school for 2 weeks, she is not getting paid and is still going into work for at least 4 hours a day. She is not out of the norm. This will continue for most of the summer. If it does not things will not be ready for next school year. So lets tack on half time for the rest of the summer (this will also cover the non-paid conferences, concerts, chaperoning, open houses, etc). Thats another 30 days worth of work. So the teacher is working 210 days a year. Ok, lets now take the salaries and look at the real numbers. 75K a year worker makes $340 a day. 54K teacher makes $257 a day. See, you can skew the numbers in very different ways depending on the assumptions you make.

Observation

I think Thom gets my point about the teachers contributions. To call me silly because they get a benefit I cannot get seems irrelevant. My point was only that they GET A BENEFIT that the rest of us cannot access.

I am seeing Thom's other comment about the unfunded liability. The assumption of his argument (and the Illinois teacher's lobby) is that they should only be responsible for the "Current Cost", no responsbility whatsoever for the amortization of the unfunded liability.

I am analyzing this for other clients since pension costs are causing financial issues for all local governments. My take is this. If you were to freeze the pension liability today, in other words, end the plans and fund what has been accrued, the accrued liability would decrease significantly (both the total and unfunded). The reason, the teachers pension benefit would be their most recent best five years, not the projected best five years. Example. For a teacher with ten years of experience earning say $60,000 (203 does not post the actual contract), the pension benefit would be 9,900 (lower for actual salaries). Since that would not be paid out until age 65 (say the teacher was 35), the liability today would be $20,000. If you assume that this teacher works for 30 years (20 more), the benefit would be 66% (30 years @2.2% per year) of a $175,000 salary. The liabiity is $412,000 today, $1.3 million at age 65. To date, the District should have funded $150,000 of this liability or $130,000 more than if the plan was frozen.

The actuary then calls some of this cost "normal" and some "unfunded". Since the actuary is hired by the teachers, guess what bucket most costs go into?

So my two points. First, these calculations are daunting and depend on MANY assumptions. I think that the appearance that the entire problem is based on not funding the prior liability is not totally valid. I think that when the benefits were increased, the funding (from both parties) was NOT increased proportionally. Accordingly, some of the unfunded liability relates to the teachers.

Second, I think that over time, the appropriate funding for this plan should be 30% of salary, not the 17% that was provided. So the threshold question is should the state pay the entire 13% shortfall compounded? Or should they adjust the benefits (such as freezing the plans and funding only what has been earned) and starting a new plan that is either a defined contribution plan of 16% (the employees 8% and the states 8%) or reduce the benefits for what 16% can afford? Some would argue the teachers (or their school districts) should pay the entire cost over 7.65%.

I do not think we should just hold the current benefits if the previous plan was not economically viable.

But again, this is a VERY complex issue that should be analyzed by the best and the brightest. Let's send it to the top 5 MBA schools to get some alternatives.

Or we can do what the Federal government is doing with our FICA benefits. Reduce them by deferring the retirement age and taxing the benefits that have been funded with after tax dollars. However, I do not like FICA and I would not want to impose an inferior political solution on the teachers. They should only get what is fair.

I think we get back to the basic three steps.

1. Evaluate benefits

2. Adjust benefits (or increase employee contributions for higher benefits)

3. Create a stable funding plan, not one that is based on increases that cannot be sustained from the states economic base.

By Anonymous on June 17, 2008 9:05 AM
Its still flawed, there are assumptions made that are not based in fact. Here is my analysis; teachers work almost as much as a year round employee. For example Teachers do not get vacation days. So lets subtract 4 weeks of vacation from the year round workers hours, so that worker is now working 220 days a year. My wife is a teacher at the high school level in another district. They've been out of school for 2 weeks, she is not getting paid and is still going into work for at least 4 hours a day. She is not out of the norm. This will continue for most of the summer. If it does not things will not be ready for next school year. So lets tack on half time for the rest of the summer (this will also cover the non-paid conferences, concerts, chaperoning, open houses, etc). Thats another 30 days worth of work. So the teacher is working 210 days a year. Ok, lets now take the salaries and look at the real numbers. 75K a year worker makes $340 a day. 54K teacher makes $257 a day. See, you can skew the numbers in very different ways depending on the assumptions you make.

You just can't make these "back-of-a-napkin" assertions and expect them to hold water. If your wife is spending time at the school this summer, that is her choice. When she was hired, she signed a very detailed contract that spelled out the hours she was expected to work and how much she would be paid for them. You can't say that just because she is volunteering to work extra, she should be compensated. "She is not out of the norm." How do you know? Has anyone counted the number of teachers working over the summer? Are they punching a time clock?

The other side of the coin is, teachers do not have a monopoly on working extra hours. What about the person who has to fly cross country? Their hours on airplanes and in airports aren't compensated. What about the conference calls with people overseas at 9 PM or 6 AM? To be fair, if you are going to count the extra time that teachers work in the summer and through the school year, you have to count the extra time many other people work, as well.

Teachers do work extra hours in the summer or else school can not open and start on time. When the school year ends, everything is put away and taken down. Curriculum can not be copied till the following fall and lesson plans can not be written until you have a schedule. I agree with the man who’s wife is a teacher. Teachers don't get paid for any overtime or extra work. Comparing them to the employee who has to fly out of the country, please! I am sure that employee is making more than a teacher, probably triple. Let us lay off the teachers. They work hard all year long and are totally under paid, and most work for the love of the job and to have to be bashed here on this blog about the retirement they receive, that is ridiculous! I think most of the bloggers here have tried to get a job and were not successful or maybe a board seat or an administration job and have a chip on their shoulder from that and take it out on our poor teachers! They have a nice retirement and I am proud that after they put in long hours, long days , long years of teaching, OUR children that there is something nice at the end of the road for them.

To R&R

You said:

You just can't make these "back-of-a-napkin" assertions and expect them to hold water. If your wife is spending time at the school this summer, that is her choice. When she was hired, she signed a very detailed contract that spelled out the hours she was expected to work and how much she would be paid for them.

My reply:
Yes, they do work over the summer. The hours are spelled out but teachers realize that all the work that needs to get done can not, during the "DETAILED HOURS" in the contract. Bullentin boards, lesson plans and curriculum all need to be done by opening day.

My solution,
Pay teachers overtime for those hours not specified in the "DETAILED CONTRACT!"

Hey, anonymous. Regarding your post about thechampion.org being a bad source of information. I just want to say, I sure hope you aren't a teacher, because if you are your comprehension level is terrible.

Regarding this from Dan Denys

I think Thom gets my point about the teachers contributions. To call me silly because they get a benefit I cannot get seems irrelevant. My point was only that they GET A BENEFIT that the rest of us cannot access.

All of your hyperbole over the fact that the teachers do not pay Ill. state income tax was pretty silly.

I am seeing Thom's other comment about the unfunded liability. The assumption of his argument (and the Illinois teacher's lobby) is that they should only be responsible for the "Current Cost", no responsbility whatsoever for the amortization of the unfunded liability.

Well I'm not speaking for the teachers, and I have no idea what their position is. My personal comments regarding the unfunded liability is that if the state hasn't ponnyed up for their share in the past, then yeah, the TRS deserves those payments plus interest. This amounts to 80+% of the liability. The remaining 20% or less is where the hard questions come in, and I don't have the information.

As Dan used "I think" a number of times in the rest of his comments I'll accept it as his opinion which he has a every right to have. It is a very complex issue.

Some of the things I want to find out is exactly what share of the $22 Billion deficit is due to the state not making timely payments vs other issues, what % of salary those past payments were, and what payments will be required in the future to get to 90% funding in 2045 as is the plan currently. As I have time I'm going to try to find those answers.

Ted,

After all of this information (including source information), you would think that the Sun would run more than an AP story that only promotes the pension bond affair. Madigan is concerned about pensions and borrowing to fix them does not matter. I know plenty of people that would provide quotes to address this matter, got to the Republicancs for their proposal.

To Anonymous on June 17, 2008 5:06 PM

I never said teachers don't work hard, I said they are not the only ones. You can't just say things like the people traveling probably make triple what teachers do without any basis for it. I know for a fact that there are many people traveling (within the country) who are not compensated for their traveling time, even when they arrive at a hotel at 11:30 pm and have a meeting at 7 am the next morning. I also can't think of any college-educated professionals who receive OT.

The reason I mentioned the detailed, specific contract is that teachers, or their union reps, are often quick to file grievances or complain about any extra time worked. I have heard teacher's comment about how they aren't supposed to stay after school for a meeting or to wait for kids to be picked up from an extracurricular. I have seen how empty the school parking lots are at 4:00 pm. I have been in the schools at 4:30 and heard teachers congratulate themselves on working so late, knowing my spouse won't be home for another 2 hours at best.

Most teachers are dedicated and work hard like many other people. I just don't think they deserve to be elevated to sainthood, especially when their actions at contract negotiation time make them look like bullies. There are lots of good things we could be doing for teachers (and kids!) but we can't even start talking about them because we're mired in emotionalism and the union won't hear of it.

To all,

On withholding, people who complain (in this case teachers), open up their entire financial affairs to scrutiny.

The information you are looking for is in the following document:

http://trs.illinois.gov/subsections/general/Buck%202007%20Valuation%20Report.pdf

Look at Schedule XIV

In the current year, the pension contribution including debt service on the 2003 pension bond (that the state cannot afford) is slightly more than $1 billion. This reflects a state (employer) payment of 17% (22% with the pension bond). This is way over your 6.45%.

In two years, this number almost DOUBLES to $1.9 billion or 28% of teacher salary.

So the deal, teachers pay 8% (other 1.4 is for medical and other insurance) and state pays 22% going to 28%. This is a very lucrative play. Again, I think that the true cost is disguised by the "unfunded" notion. The plan is that by 2020 (12 years from now), the plan will have a $38 BILLION deficit. When they get to 90% funding in 2045, the deficit will be $37 billion.

I think that controlling benefits is a MUST--we cannont afford this foolhardy plan that was created in the 90's.

R & R

Parking lots are empty because they take the work home! Notice the big bags teachers carry?

RR on June 18, 2008 8:39 AM

RR, I have three family members who are teachers and I learned early on to never, ever, ever get into a discussion with them about teaching. It is a no win situation. It does not matter what you do, or how many hours you work, or how often you spend time away from your family(In my case it is management, 60+, and 50%). Their job will always be higher stress, more demanding and grossly underpaid compared to most everyone else with the same education level.

The implication by some (many?) teachers is that they could easily make 2-3X their current salary, have less stress, and work far fewer hours than they do now. The attached link is an interesting study showing that median teacher salaries exceed those of many professions with the same education level.

http://www.alleducationschools.com/faqs/teacher-salary.php

I'm sure this will be discounted because it dare's to say that teachers work on average 36.5 hours per week during the school year, and on average work 200 days a year. Some will claim that taking work home is unfair to them and should count as hours worked. The problem with this thinking is that they are not unique to this as most business people also take work home after leaving their office's at 6:00.

The good teachers are certainly underpaid, but it is more a result of the unions desire to pay based only on education level and years of experience rather than merit.

I'm with you RR, I truly appreciate teachers and have had many good one's over the years. It would be nice, however, to occasionally hear a teacher acknowledge that others can work just as hard, and some even work harder.

anon 2

The last line of your linked article reads this:
By supplementing your teacher salary with these additional teaching opportunities, you can make a good living in many areas. Depending on your teaching degree, experience and job placement research, you can have a very rewarding and well-paying career in the teaching profession

That says it.......... with the extra money from coaching you can earn a good living!

Although I do AGREE other people work just as hard it is always teachers having to defend what they make because salaries and pensions are published and you have blogs like this that allow people to make incorrect statements.
We all chose the career that we hold today. So, if you don't like how much a teacher makes or what they get at the end of the road, go back and get a teaching degree and make a difference in a child's life.

How about Dan D posts his yearly income and the 401 K that he puts his money into, I would like to see that!

Grow up, everyone! Who works harder - who cares!!?? What did you think would happen when you became an adult?? You wouldn't have to work? Mommy and Daddy would still pay all the bills?? Get over it already. And you bet, I support teachers, the police - anyone who works those thankless jobs - and has to put up with a^^hats like some of the people here. I don't have the stomach to do it, and most of you don't either. But go ahead and waste more time whining about it all. How productive.

Ted,
Take this blog down and sart one on that UGLY bridge on 59, did we pay for that????

Response from Ted:

City says bridge cost $2.5 million and that feds paid for 75 percent of that. That would put the city's share of the cost at just over $600,000.

Teacher pensions in Naperville are out of touch with reality - they and all public workers should be on a 401K - Social Security. Teachers should work all year round - the education system is the most bloated in the world. Adminstration staff for each district in Dupage - silly. Teachers should live in real world where performance is rewarded - not tenure.

The whole US education is totally ineffective and costly. Naperville is near top of list. Next time they want to strike - fire them them all - We need innovation/ creativity in our education system not tenure

Oh Please, feel free to stick your head in the sand. I, however, am concerned over the billions in unfunded liabilities at the state level. On the other hand I'm not too worried about, once my kids are out of school I will be moving South and leave the rest of you SUCKERS in Illinois to pay the bill!!! LOL!!!

We have over 100 people in admin, stc in D204 making nearly $100,000. Case closed -- Never vote for another referendum in D204. I think $260 million in tax revenues are enough to run any school district. Unfortunately people, you cannot stop the steady march higher and higher. Expect the revenues to be nearly $300 million per year in the next few years. That's a new high school per year. Now add the 20% bump up on X% of teachers retiring per annum...and for life. Good grief! We are being robbed!

Marshall,

I agree with most of what you said.

What makes this closing unique and different is the following.

1. Both lanes were closed to traffic at the same time and for a very elongated time...months!

2. Pedestrian traffic was closed for a week until a temporary bridge was built and its seems shuts down most of the time for safety since it was built too close to the construction zone.

3.This is a convenience plaza with mostly convenience tenants. It is not a destinatation plaza where consumers wil go out of the way to get something they can't get anywhere else.

4.Once the traffic was halted, the convenience element of the plaza disappeared.

5.I don't see how the City of Naperville expects these businesses to pay electricity, water and real estate taxes after the city cut them off from their source of income.

6. The city chose to close the bridge down completely to get the job done quicker and cheaper.

7. The savings or some of them resulting from a COMPLETER SHUTDOWN as opposed to a PARTIAL SHUTDOWN should be passed to the businesses.

8. As many said before me: Why do we have 6 bike cops riding in downtown Naperville on a Monday night when it is almost deserted. Why not use this money for 6 contruction employees to work on the bridge in the afternoon so we can get this bridge rebuilt quicker?

9. The fact these businesses have contributed to the tax base of Naperville for nearly 4 decades in a positive way should also weigh in heavily for their compensation. Unlike downtown businesses, they are not a tax drain on our tax pool.

10. Finally with taxes rising over 20% for most residents, the last thing we can afford to lose is any part of our business tax base and have 25% residential tax increases the next year.

Naperville needs to protect its business tax base even more so because of its very wasteful habits that led to increases 4-5 times those of most cities in the state. Let us go back to non-home rule and try to limit tax increases to 5% so we can all afford to continue living in Naperville. Would that not be wonderful again?

Ah, yes, the grass is always greener......

Host Ted,

I was reading this post last and began typing about the bridge post not realizing I was on the wrong thread because I never switched back.

At some point I realized my mistake and I CUT and pasted to the right thread and everything worked except the name Marshall was deleted.

I was 100% sure by cutting and pasting instead of copying and pasting it would not appear here on the Teacher's Thread.

I guess I was wrong!

My apologies for posting on the wrong thread.

At least you know why you have more views than posts. Most of us read way more than we post!

Keep up the good work, Host Ted, and don't forget us one day on a police and firemen pension to discuss the 21% in matching funds despite that the 50.5 million dollar shortfall in these pensions.

How about interviewing City Manager Bob Marshall and see if he can explain this fiasco? How he is going to balance the budget without increasing taxes more than 5% as is the normal practice and tradition in the State of Illinios?

If he solves all problems by INCREASING TAXES, well a junior accounting student in high school could plug all the holes in for him to make the budget balance.

I thought a City Manager had duties to keep expenses under control and not to plug deficets with new taxes. We are double paying this manager since he is also getting a pension from us at mostly taxpayer expense so we deserve a bit more for our TAX MONEY!

I also hope someone could simplify the school pension mess as the city pension mess was simplified. We know exactly what the taxpayers contribute to the city and fireman pension funds.

Does anyone know what the taxpayers contribute to the Teacher's Pension Fund? I believe they contribute 9.4% to their own fund.

Maybe Tom Higgins can be simple for once and just give us the percentage as CM BOB gave us the percentage for the police and firemen pensions!

I wonder if Mr. Higgins has heard from CM BOB. CM Bob usually gets back within a day or two. It seems like it has been a week!

Beilen,

I have not heard from him, if I don't hear by Monday, I'll e-mail him again.

State pension contributions for teachers is a moving target and changes seemingly yearly. Briefly, they have been recently in the 8-9% range, look to be in the 18-20% range the next two years and then are supposed to go down in 2011. I'm trying to get the forward percentages, and some information on the unfunded liabilities.

So you see nothing is simple, and for all I know the police and fireman employer contributions also change from year to year.

TO ENOUGH IS ENOUGH:
I can not believe that you would bat your eye that some administrators are making nearly 100,000. Do you realize that a principal manages over 50 people and hundreds of parents. In the business world if you had to manage that many people and had a Master’s Degree you would make that or more. I think it is extremely reasonable.
Also, I feel sad that you will not vote for another referendum. I hope the first week of school you can show up and volunteer in a NON AIR BUILDING! Spend the entire day so you can see what you will be doing when you decide not to vote no to a referendum for air.
Also, I believe 204 does not give that end of the career bump and hasn’t in years.
Being robbed….Please!

To Enough is Enough

I'm having a hard time wth this statement

We have over 100 people in admin, stc in D204 making nearly $100,000.

Per the Illinois State Board of Ed. D204's percentage of income spent on administration is .09% vs 2.6% for the state Average. That's an excellent percentage.

Average teachers salary is $62,000 slightly above the state average of $58,000.

The average administration salary is just under $102,000 which is essentially the state average. So unless they have hundreds of Administrators there, I think you are high on your figure of 100 people in Admin. Are you including teachers also? They do have over 3,000 employees.

Also, I guess the question is what you mean by nearly. If you can give us some back up it would be helpful.

OK, how many teachers, principles and admin people in D204 make over $90,000 per year fully grossed up for benefits?

To Enough,

Now you are asking how many?

Previously you said there were over 100, what did you base that comment on?

I also see that you are now grossing up to include benefits.

Thom,

I think you must have meant "0.9%" percent rather than ".09%". Even a 0.9% figure sounds too low for administration, though. Is that just the figure for the salaries of principals and vice principals?

-JQP

JQP

Yes, my mistake it's .9%. This is per the ISBE Report Card for CUSD204. They show the state average as 2.6%

That is the percentage of expenditures for General Administration. To me that is the people working in the district offices. Don't know about Principals and Asst. Principals for sure but I bet they are lumped into Instruction. If you spend some time on the ISBE website I bet you can find definitions.

Check out this article from today's Sun-Times:
http://www.suntimes.com/news/metro/1018038,CST-NWS-pension22.article Future city workers could lose out on lush pension plan REFORM | Panel may urge shift to 401(k) to solve cash crisis June 22, 2008 Recommend (6) BY FRAN SPIELMAN City Hall Reporter/fspielman@suntimes.com The lavish pensions that City Hall has been known for may become a thing of the past for new city employees. Newly hired employees would shift to the 401(k) plans favored by private industry -- instead of the "defined benefits" enjoyed by their older co-workers -- under a plan being pushed by the head of Mayor Daley's pension reform commission. ....

Ted,

I was well aware of this. Public bodies cannot be paying 20 to 30% of salaries to pension plans and still owing more. (I noticed Higgins is still "digesting" the numbers from TRS that I forwarded to him five days ago, they are more than the 6% that he mentioned).

The WSJ noted that Kentucky was going to lower certain benefits to control their pension costs. It all points that their is the cost of funding these pensions and the funding, they both are contributing to this problem.

What I know about the Teachers Retirement System (TRS), deficit and funding, with comments regarding the larger state pension program of which the TRS is part.

The following mostly per this report by the TRS actuaries.

http://trs.illinois.gov/subsections/general/Buck%202007%20Valuation%20Report.pdf

I will spare everyone the what, and when, regarding all the different bills passed, but where we are today, by statute, is that the state has been increasing the amount it puts into the various pension accounts for the last 15 years. For the year ending 6-30-08, the states contribution to the TRS is equivalent to 13.69% of the teacher’s salary. That raises to 17.66% in 2009 and then levels off at 20.81% from 2010 to 2045, at which point it’s projected to go down to 9.45% which is the percentage projected to fund the program after retiring 90% of the deficit in 2046, BTW as per the Illinois Constitution, Illinois is required to fund the pension programs. The only way out is to amend the Constitution.

So, now you’re really mad it’s not just the police and firemen that we are paying 21% into their retirement funds, it’s also the teachers, and judges, and university profs and the members of the general assembly.

But before you start the revolution you need to break down that number a bit. If you go to Schedule XIII you will see it further broken down. The normal cost percentage (call it 8-9%) is the cost to fund the system with out any un-funded liabilities. Meaning that if the state had kept up it’s part of the bargain and made timely payments, and other adjustments such as larger numbers of people retiring early, or actuarial changes, increase in benefits, etc. hadn’t occurred, then all the state would be kicking in is that 8-9%. No big deal. (national average is 12.5% I assume that’s without financing any deficits)

The amortization percentage (call it 12-13%) is the cost of retiring those un-funded liabilities we keep hearing about (currently $42 billion for the state including $22 billion for the teachers). It is the amount the state hasn’t paid in for the variety of reasons I’ve indicated above, plus interest @ 8.5%. I’m asking for a copy of a report that will I hope give me the amounts in the various categories since the 1970’s that will help tell us just what amount or percentage is due strictly to the state just not paying and what amount is due to other factors for most of the deficit.

Confusing the matter are critics like Dan Denys pointing to the increases in the un-funded liability due to increased expenses for encouraging early retirement. He claims that is to give teachers or state employees a “kiss”. If you talk to the other side they disagree stating that it is done to incentivize older highly paid teacher/employees to retire, thereby getting them off the payrolls in order to get younger cheaper replacements. I don’t have the numbers but I remember having this conversation with D203’s Ast. Supt. of Finance regarding this in 203.

An interesting story (not in the Buck doc.) is that the state did a program called the ERI in 2002 under George Ryan. For the SERS It was expected to garner 7,300 takers instead 11,300 took advantage. The “idea” was to save salary and expenses. However the additional liability for pensions grew $2.3 billion. So, the question is whom do you blame for the increased pension costs? The pension system, or in this case the state for wanting to lower it’s payroll? The report by the way intimates that it was an absolute long term looser, and was done to generate cash needed today and forget the future pension obligations. Blaggo has blood on his hands for taking a “Pension Holliday” for two years; so messing with the pension system is a bi-partisan thing.

Lastly, here’s just some things I've heard. We pay with our property taxes for the various pensions to police firefighters etc. yet I hear they are part of the state SERS pension system with a $9 billion deficit. How can that be? I remember reading somewhere that Naperville has a $51 million deficit. Is that part of the $9 billion? I don’t know. I did hear that a town can borrow the pension funds, so has Naperville not made 100% of the required payments leading to a $51 million deficit?

Making me feel worse is the fact the Illinois pensions aren’t all that great, from Dan Hynes, Ill. Comptroller:

Pension benefits paid to regular state employees in Illinois are low relative to benefits provided by the other states. Illinois ranks in the bottom one-fifth of all states for retirement benefits for an average state worker.

Historically, Illinois was one of the worst states in paying benefits to retired workers. According to the State Employees Retirement System (SERS), Illinois ranked 49th in the nation prior to enacting reforms in 1998 that changed the benefit factor of the retirement formula from a step rate ranging from 1.0% to 1.5% per year of service to a flat rate of 1.67%. However, even with this higher rate, Illinois continues to lag behind other states that use a factor greater than 1.67% per year of service.

As of 2006 the average monthly payment for a state worker was $1,426.00 I assume that is only for the SERS, For teachers it is $3,344.00

A couple of corrections. Previously, I incorrectly stated that the states contribution was .58% of a teacher’s salary, that is the school district’s percentage. I also stated that after 2011 the state’s contributions would fall significantly. A TRS representative made both statements to me, and both are incorrect. I apologize for the error. “Garbage in Garbage out”

A special comment regarding Dan Deny’s post of 6-18

Look at Schedule XIV

In the current year, the pension contribution including debt service on the 2003 pension bond (that the state cannot afford) is slightly more than $1 billion. This reflects a state (employer) payment of 17% (22% with the pension bond). This is way over your 6.45%.

In two years, this number almost DOUBLES to $1.9 billion or 28% of teacher salary.

So the deal, teachers pay 8% (other 1.4 is for medical and other insurance) and state pays 22% going to 28%. This is a very lucrative play. Again, I think that the true cost is disguised by the "un-funded" notion. The plan is that by 2020 (12 years from now), the plan will have a $38 BILLION deficit. When they get to 90% funding in 2045, the deficit will be $37 billion.

And later this

…..Public bodies cannot be paying 20 to 30% of salaries to pension plans and still owing more

I find it troubling that he points you to Schedule XIV, a hypothetical illustrating what the funding requirement would have been if the state hadn’t issued the pension obligation bonds, and even then he inflates the percentages to boot. This is not reality, it’s a hypothetical.

He wants you to believe all our problems are because of a too generous pension plan, without having the integrity to admit that yes, some significant percentage of that is the state not paying what is required, and part is because of the desire to get rid of highly paid employees. He wants people to think that the real costs are 20-30% and that simply isn’t true by a long shot.

.

To All,

I want to repeat my approach.

1. Determine how benefits (all of them) compare to the private sector.

2. Reduce those that are either generous or no longer needed.

3. Fix the funding, no bond gimmicks (even though there could be some benefits), no ramp ups in funding (that the state cannot afford).

Some obervations.

1. WHAT HAPPENED TO FUNDING ONLY AT 6.45%?

Thom seems to be dropping his claims about the 6.45% state funding.

2. Note this comment:

The amortization percentage (call it 12-13%) is the cost of retiring those un-funded liabilities we keep hearing about (currently $42 billion for the state including $22 billion for the teachers). It is the amount the state hasn’t paid in for the variety of reasons I’ve indicated above, plus interest @ 8.5%. I’m asking for a copy of a report that will I hope give me the amounts in the various categories since the 1970’s that will help tell us just what amount or percentage is due strictly to the state just not paying and what amount is due to other factors for most of the deficit.

I AGREE. That was my point 1.

3. EARLY RETIREMENT.

A couple of observations. First, so many people took them and are vigorously defending them because the benefit is WAY TO GENEROUS. For those people in the private sector that retire early, they need to bridge those years. If they want to take their pension (or Social Security) early, they have to take a discount.

We have a teacher shortage, so we no longer need to create incentives for teachers to leave early. Let them work to 65 or take a reduced pension (based on the same actuarial assumptions for the plan funding--8.5% compound reduction--my guess (and Thom, get an actuary to get you the more precise calculation) is that the pension benefit would be cut by at least 30% if a teacher retires at 55. In Naperville 203, we can offset the higher payroll cost with teacher reductions with the current student reductions. The new 203 teachers can move to Chicago where there are the jobs.

4. STATE RETIREES

When I first read Hynes's comments, it threw me for a loop. I think that SERS has the lowest paid employees (and probably too many at that), so they have the lowest pensions. This comment should have been more researched. Look at a jail guard, a judge, etc. The comment is almost irresponsible.

5. HYPOTHETICAL FUNDING

Thom constantly refers to the 1995 plan to fund the pensions to 90% in 2045. This schedule does this. Prior to Blago, it was being followed. He did the pension bonds to "suspend" the schedule until 2010. If you don't follow this schedule, then the plans go bankrupt.

That is why a new plan that people can afford be put forth. If the state did steps 1 and 2 of my plan and the funding (step 3) would require a tax increase that people do not want to pay, then the state should declare bankruptcy and let all of its unsecured creditors including the pensionairs fight for their piece of the pie. If the Democrats (or the Republicans if they were in charge) can't work this out, they should not be allowed to mortgage our children's future.

6. BAD INFORMATION

For the record, I acknowledge Thom's apology. But TRS should simply be a pension plan administrator, not a teachers advocate. Doesn't surprise me that they would lie, but I think I posted that comment earlier.

But that is part of the problem with our state structure. These pension plans do not report to management, they report to the teachers on their board. (And Stuart Levine and Tony Rezko!!!!) The state should set the policy and the pension board administer the plans. And if they make a mistake, their power should be taken away. Can you imagine a Forture 500 company abdicate their authority to employees/retirees without financial training? NEVER.

By now, nobody is reading this blog, but I stand behind my first comment. And Thom, when somebody is really honest to you about the increased costs, please pass it on. I really think it is more complex and muddled. But then again, current retirees are taking home pensions almost double the average. That tells me that something is amiss and needs to be addressed and FIXED!!!!

http://napervilleschools.freeforums.org/blame-taxes-for-baltimore-s-rot-t3.html#3

We should learn a lesson from Baltimore. Check out the article above.

It's been reported that Naperville has one of the highest percentages of households in Illinois with 1) at least one Bachelor's degree, 2) higher than a Bachelor's degree, and 3) two parents with at least a Bachelor's degree. Might these genetic factors have anything to do with 203's success? Any union apologists prepared to refute the impact of genetics upon student achievement? How about if we relocate 203 teachers into the Chicago and gauge their performance a year from now?

Having a college degree is NOT a genetic factor!

Joe taxpayer, or rather shouldn't it be Mike taxpayer?

Couple of questions. Not that I disagree with it but, do you have a source for the three statements? Also are you making the claim that genetics has something to do with getting a college degree, and it has something to do with 203's success? I'd like to hear your rationale.

Also, don't you think using angry rhetoric such as "union apologists" only serves to polarize the discussion? Are we talking about educating kids or engaging in an ideological battle?

Your last question is polarizing too, but I'll take a stab at it. I have alway stated that I consider D203 and its teachers as partners in my children's education. And while D203 is blessed to have a highly educated, high socioeconomic parents, which helps tremendously, D203 also gets to take credit for a large share of its students success. All you have to do is look at the results in D204, Elmhurst, St. Charles and other comparable districts to see that D203 adds value. click on this link for some interesting stats;

http://www.qe203.org/20080205referendum/documents/6%20CUSD's.pdf

and here's some more analysis of comparably performing districts , abet at a much higher cost;

http://www.qe203.org/20080205referendum/documents/top%206%20HSD's.pdf

Put D203 admin. and teachers in Chicago? Yeah they wouldn't do as well as in Naperville. But if you did transfer them to Chicago schools, I say scores go up.

Joe,

Are you kidding? Teachers in Chicago make less than Naperville. And they have no retirement incentives. If the Naperville teachers rejected 4.99%, The IEA should tax the Naperville teachers like baseball taxes the Yankees.

To all teachers, police, firefighters - anybody who gets a pension paid by taxpayers - Look in the mirror. What bankrupted GM, Airlines , etc - greedy CEOS and pension obligations.

Teaching is about students learning, being productive - it is not a system meant to survive to pay pension and medical obligations of teachers and their administration.

When people wake to their senses in Naperville and no longer are willing to pay excessive amounts for education. How many really good teachers are there.

People in 5 to 10 years will be forced to leave their Naperville homes because they cannot afford taxes for public service pensions.

What wrong with the ssn payments receive receive. Oh, teachers don't pay that - some do double dip. What others jobs do you get a 9 month work year - outside of people with exceptional talent - athletes , entertainers and believe me it is much harder to be employed in those fields. No tenure,

I have not seen a creative idea in all responses that addresses the issue of the poor US education system in US. It's all about pensions

People of Naperville - unite - stop letting teachers call the shots - It's like the inmates running the prison.

Anonymous, a couple of comments;

Teachers pay 9.4% of their income into the pension system. School districts pay .58%, and the state of Illinois contributions are confusing but are slated to increase substantially from the low teens to approximately 21% in the next few years as a way to reduce the pension deficit. Of that 21%, pension actuaries indicate that 8-9% is the nominal cost to fund the pension system, the other 12% is largely due to the state not making its required payments in the past, additional costs due to early retirement programs, and to lesser extents improvements to the benefit package, and increased life spans.

Teachers pensions are paid by the state. The only pensions we pay on our property taxes are municipal, and county employees, so the teachers pension has no impact on property taxes.

Teachers do not pay into SS (and neither do police and fire fighters), their pension is the only retirement program they have. If they had a job outside of teaching they would of course then pay SS. Realize the fewer years worked as a teacher, the lower pension though.

Public education is alive and well in this town. When you consider that D203's expenses are only slightly higher than the sate average, despite being in one of Illinois most expensive communities, coupled with our children's superlative academic achievement, D203 is a real bargain. It's one of the reasons why I live, and send my kids to school here.

Here's some unhappy, but not surprising, bit of news. While Illinois is supposed to be ramping up payments in the next few years in order to get to 90% funding in 2045, they failed, once again, to appropriate the necessary amount needed by $255 million, exacerbating the problem further. S.O.P.

The General Assembly adjourned on May 31 after passing House Bill 5701, as amended, that contains the pension
appropriations for the fiscal year 2009 budget. The new fiscal year begins on July 1.
House Bill 5701 provides state appropriations for TRS in the amount of $1,196,488,000, or approximately
$255,301,000 less than the amount the TRS Board of Trustees certified as the required amount under the 50-year
funding plan.

For decades, Naperville has had one of the highest percentages of households with a bachelor's degree; one of the highest percentages of households with both parents having at least a bachelor's degree; and one of the highest percentages of at least one parent with a degree higher than a bachelor's. And the teachers here look in the mirror and take full credit for student performance. The same teachers who threatened the community with a strike in 2005 with an outrageous 4.99% offer already on the table. But these facts don't phase the union apologists. Their unabashed teacher worship will continue to embolden teachers here into thinking no one works harder than them, therefore justifying their 5%-raise-or-else militant ideology. Welcome to Naperville. The same level of service (including education) as 20-30 years ago, but with the privilege of paying 2-3 times more. The Cook Co liberals have found a new home.

Joe Taxpayer, or shall we say Mike Taxpayer since we all know you are Mike Davitt. Why are you so afraid to use your real name?

You go on, and on, and on, endlessly about the 2005 contract. It's getting really old, and no one believes you. That's why voters removed from the school board.

Here are the stats as reported to the ISBE for the last seven years, per the Assistant Superintendent of Finance, Dave Zager. This is the average teacher salary increase the district experienced in real dollars. The contract amounts are higher, but as the teachers are getting younger and hence less expensive, this is the actual increase in cost to the district, and thus, we the taxpayer.


2006-07--3.3%
2005-06--0.1%
2004-05--3.7%
2003-04--4.0%
2002-03--5.8%
2001-02--5.3%
2000-01--3.6%

The average for the seven years is 3.66%. The state average was 3.25%. I have a really hard time getting excited over a 3.66% average increase in teacher salary costs. I will note that the contractual salary increase's for the next two years are 3.80% and 3.73% and again Zager expects that percentage will be reduced approximately .5% due to turnover to younger teachers.

Consider how well D203 does educating our children. When compared to other similar high socioeconomic districts, D203 students excel. It ain't the water that's the difference, It's the teachers and the district. That does not mean that teachers are solely responsible, but the facts show they help our kids get to the next level of excellence.

Considering that D203's costs are just a few hundred dollars greater than the state average, the only fair conclusion to draw is D203 is a bargain. There is not a school district in the Chicagoland area that posts equal or higher scores at a lower cost. Not one. That's something that we all should applaud, instead of complaining about.

Let me see if I can make a point in less than 10,000 words and ten paragraphs. District 203 was founded in 1972 with 9,300 students and a budget of $18M. Since then, the student population doubled and the budget...increased 11-fold to $212M. In light of this fact, union shills argue today's educational product is a value. We're paying $194M more for the same product? Hell of a deal, Mr. Union Apologist, hell of a deal.

http://www.championnews.net/article.php?sid=1115

This is obscene. Remember this when you enter the voting booth and remember to vote FOR Darlene Senger and against Dianne McGuire.

Joe Taxpayer (AKA Mike Davitt)

Serious question. Can you show us a school district in Illinois that has managed to control costs better?

Care to comment on the fact that D203 is only what? $300.00 higher per student that the state average, what's up with that?

How about talking about how education has changed in 36 years? Differences in technology and special ed would be a good place to start.

Thom, the disturbing thing that you are unfailingly defending is that you always want to compare one school district to another school district. That is the problem because all have failed in controlling costs, this is also typical of 99% of government entities, which includes the City of Naperville, The State of Illinois and the Federal Government. They have no incentives to reduce costs because they can keep going back to the well and asking for more money, a business on the other hand if it cannot do the job right it will have to close shop and go out of business. We need to start comparing the schools to well run business and then decide who is really saving money and/or controlling costs!

Anonymous,

If schools were run like businesses, they'd "lay off" kids with below average IQ's, learning disabilities, ADHD, etc. because its not cost effective to educate them.

-JQP

Anonymous,

D203 doesn't have access to unlimited funds, they have to ask for it and we voters have to approve. Business can simply raise prices, school districts can't.

Give some credit to D203. Residents approved the facilities referendum and just a few short months later D203 passed on collecting the first installment. They didn't have to but they did. Don't know too many businesses that do that. And let's remember that we are rebuilding Central for $89 million, not building a new school at a savings of say $30 million. Compare that to New Trier in Winnetka, one of premier school districts in Chicagoland. They are talking about spending something like $350 Million, yes $350 million rebuilding their HS. Can you imagine the response from Dan Denys if he lived up there?

We also have to realize all the additional burdens that are placed on today's school districts. Early childhood (pre-school) centers, far more extensive Special Ed to age 22, ESL, huge advances in technology, etc. all these come with a huge dollar cost attached to them.

The Assistant Superintendent of Finance is one savvy guy. These guy's are spending our tax dollars wisely. People forget the partnering that D203 has done with both the City of Naperville, and D204, with computer systems to cut costs.

Thom,
I just visited Oswego East High School on Sunday. It was so beautiful. I believe it cost less than 89 million to build from scratch.

Are we remodeling or rebuilding Central at a cost of 89 million?

I sure hope we are rebuilding the whole school for that price since the land is already paid for.

OEHS was very breath taking. I was very impressed!

The auditorium with seating for about 700 was world class.

Xtreme Dance performed there to full houses for 4 consecutive days despite a 15 dollar ticket price!

I am sure they were charged a pretty penny by OEHS.

They are a Naperville Dance group but found NC and NN both unsatisfactory.

So if we had better facilities maybe our school can capitalize on making some extra money from such groups as XTREME DANCE from NAPERVILLE.

XTREME DANCE performed in Las Vegas and Ocean City, MD to full houses. I bet they could pack that new performing arts center planned at the train station. Do you know if Omni will be built Thom on that site or is that all hot air talk!

From Thom Higgins on 8/12:

Give some credit to D203. Residents approved the facilities referendum and just a few short months later D203 passed on collecting the first installment. They didn't have to but they did.

Actually, this sounds more odd than commendable to me. It certainly sends a mixed message to voters: "Hey guys, we really need the money, but then again...we don't."

I think this district is good at pinching pennies. Where I think they miss the boat is in managing larger amounts, especially in the situation where spending moderately more up front can save quite a bit of money down the road. Or even lead to earning potential, like the auditorium at OEHS.

Take, for example, the North Pool. The law requiring a deeper pool was passed in 2000-01. The grandfather clause allowing us to keep using the pool expired in 2003-04. If the pool renovation costs $5.5 million now, how much would it have cost in 2003, $2.5-3 million? Was the school district (which has an annual budget of $200 million) being a good steward of our tax dollars in 2003? Why was it so difficult to find the will to take care of the pool in a timely manner?

So extend this to current decisions regarding the pool. The latest plan seems to do a good job of updating the pool to 2001 standards. Why aren't we planning for 2028? Have we considered partnering with the park district to put a 50 meter pool in at North? What would be the earning potential of such a pool? It's this type of visionary, long term thinking that I would like to see more of in D203.

And before you say, "Gee, doesn't the 20 year referendum count as long term planning?" I'll just respond that asking for money may be good fiscal management, but it is not visionary.

Another Anonymous,

Oswego East has received a lot of awards for design, however it was built to a lower quality standard and already is having problems. The plastic roof panels in the Commons are leaking, and the HVAC is inadequate. The New Central will have a similarly styled Commons area. Let's hope they study Oswego's.

If you search through this thread http://blogs.suburbanchicagonews.com/newsblog/2007/12/how_will_you_vote_on_d203s_ref.html

you will find Qswego East and the renovation of Oswego HS discussed.

As to Central, it will essentially be a new school. Both NN and NC have relatively new theaters, I'm surprised neither one was satisfactory.

Omnia? It will never happen unless they can get realistic funding in my opinion.

R.R.

As far as renting out the auditoriums I know that at the very least North's is rented out to Anderson's quite a bit and it's also rented out to local theatrical groups, this from my personal experience. I think you would be pleasantly surprised to see how often they are rented to outside groups.

With respect to the waiver for collecting the first years referendum cost, I think perhaps the reason lies in the fact that D203 uses a 3% CPI inflation assumption in its forward projections. Actual came in at 4.something, which brought in greater funds that projected. It's a good thing, be happy.

To your larger "vision" point I understand your frustration. Unfortunately while you and I might be willing to spend more to get more long term, there are a lot of folks that complain bitterly about any spending. I think you are correct that D203 has been "conservative" in it's outlook, but I think it's based on the feedback the community gives it.

All teachers and government workers need to be on 401K's. Forget the defined benefits pensions. Salary increases for teacher & government are way out of line with reality.

When the pensions for teachers / government go belly up - I don't want my property taxes raised so they can live a comfortable life - while those who worked in private sector worked 50 weeks a year, and funded their own pensions with 401K's and maybe a 6% match by employers.

Teachers/ government workers - wake up - the dream is over