Retiree Chapter Chair's Message: ‘Everybody Wants Ta Get Inta Da Act!’
by Neil Lefkowitz
One of the late Jimmy Durante’s catch phrases when interrupted was “Everybody wants ta get inta da act!” We could well be crying that as we hear more and more “expert” testimony on every aspect of school financing, from pension reform to how much teachers should earn and whether organized labor is good for education.
An article in the March 3 Wall Street Journal states that the billionaire Bill Gates believes that the present funding for pensions and health care is stifling funding for public education.
"These budgets are way out of whack," Mr. Gates told the WSJ. "They've used accounting gimmicks and … things that are truly extreme.”
Mr. Gates urged that states must change how they calculate employee pension funding and health care benefits. Mr. Gates blames states for creating pension fund shortfalls because they used a higher rate of return on investments to calculate their own obligations. The higher the rate, known as the discount rate, the smaller is the state’s assumed obligation to contribute to the pension fund. This calculation, in light of poor investment returns since the mortgage debacle and the Wall Street meltdown, has led to widespread funding shortfalls for pension funds across the nation.
The upshot, plain and simple, is states are reducing funding for classrooms, and politicians are falling all over themselves to point fingers at teachers and their outrageous pay and benefits. (Haven’t heard any of our state elected officials offering to reduce the pensions they’ll receive.)
On March 6, Newsday reported that various public agencies failed to make the necessary contributions to the pension
funds when stocks plunged in 2007-8, and showed poor judgment when they decided to drop employer contribution rates to near zero when investment returns were considerably higher.
Suffolk County Executive Steve Levy wants to replace the defined pension system for county employees with a 401K savings plan similar to those in the private sector.
Our main concern is this: businessmen and government officials, including Mayor Bloomberg, are creating a public relations nightmare for us because they are threatening tax increases to pay for years of improperly funding the various public employee pension systems.
I am afraid the attack on collective bargaining rights by the governors of Ohio, Indiana and Wisconsin, to name just a few, is merely the beginning of a national trend. What we have today in pensions as well as in health care benefits is a result of years of contract negotiations between the city and municipal unions.
They are not union rules or union pensions or union health benefits. They were benefits that the city’s mayors agreed to over many years only after very capable city lawyers and negotiators worked out details with union negotiators. That seems to have been forgotten in the scuffle to point fingers at unions.
