There’s corruption – and then there’s Illinois.
As more light is being shed on the abuse of Chicago’s public pension systems through the process known as “double dipping,” taxpayer and public employee outrage has reached new heights, and understandably so.
A recent Chicago Tribune piece describes how eight Chicago labor leaders will soon be eligible to draw upon multiple pension systems simultaneously, and by doing so, collect retirement benefits of $400,000 to $500,000 annually. All told, each of these double dippers stands to collect nine to ten million dollars in total pension benefits throughout the course their retirement.
The practice of drawing upon multiple pensions is theoretically prohibited by Illinois state law. But as these eight union leaders argue, the statute banning double dipping is vague and certain exceptions exist which legally allow for double dipping. To them, they’re just following the law. To taxpayers, just because it’s legal doesn’t make it right.
Understandably, public outrage has been tremendous. The average Chicago public employee receives a yearly retirement benefit of only $29,000 and does not have the luxury of legislative loopholes engineered by their union. Taxpayers are equally upset. As city pension funds approach insolvency, taxpayers are forced to prop up the failing systems while union leaders shave off hundreds of thousands of dollars in personal benefits. As Illinois State Rep. Tom Cross put it, “Even by our standards here in Illinois, it’s beyond belief. It’s insane.”
Unfortunately for Ohioans, the practice of double dipping is not an Illinois phenomenon alone. A growing number of Ohio double dippers partake in the “retire/rehire” process, where public employees retire, begin to collect their pension, and then are rehired back at their previous position only days later at the same or even an increased level of pay.
A 2010 report by the Ohio Newspaper Organization found that over 25 percent of Ohio’s public school superintendents are double dippers, with many drawing annual pension benefits of over $80,000 while continuing to collect salaries in excess of $100,000. At a time when the State Teachers Retirement System is begging for a taxpayer bailout and countless local school districts have tax levy increases on the ballot, it is obvious that the practice of double dipping must end immediately.
As public pension reform is debated in the upcoming months, halting the practice of double dipping is just one of many issues that must be addressed.
Let’s not let Ohio become Illinois.
Regarding “double dipping”
It may be true that school district superintendents are retiring with large pensions, but that doesn’t mean teachers are.
Local school boards are responsible for negotiating salary scales for school district employees. You cannot praise an ideology of “local control is best” and then gripe about the results when that same “local control” chooses to pay superintendents and other administrative workers very high salaries while skimping on priority educational needs. If Ohio tax payers don’t want to pay superintendents and district CEOs high salaries and higher benefits and supergenerous pensions, then they must vote the board members out of office and vote others in who will reduce the outlays and take the consequences.
Or the local voters can insist on a forced grouping of small school districts into larger ones, asking superintendents and chief financial officers and those self-same school board members to willingly risk their own jobs by recommendinhg a district merge.
Good luck on that issue.
Merging many small districts into one larger one, requiring only one Superintendent, one Director of Personnel, one Chief Financial Officer, one Superintendent of Plants (actual school building and property management) can make the running of districts more efficient and permit more time and money to be spent on teaching. Although large school districts have drawbacks, the amount of small one or two school districts, each of which must have superintendents and a district office staffed with district specific employees can be insanely large and largely inefficient. But again, that’s a “local control” issue. Republican Governors who buck the desire of each small community to have its own district office, giving work only to local employees, have a hard time praising the ideology of local control even when that concept is provably wasting a lot of tax payer monies through an unnecessary duplication of work.
Kasich will not take on the material issue of duplication of effort from the overuse of too-small-to-thrive districts, and instead has given these same districts permission to continue inefficiencies by removing bargaininbg rights of the only really necessary component of education – good instruction from good teachers.
The benefit packages extended to local school district board members are often better than those given to teachers, and are often provided free of charge to board members. Members might be paid very little salary, but they do get other forms of district-supplied benefits, not just taxpayer paid for medical, dental and vision insurance programs. Sometimes they are given conference monies or “education grants” for in-state and out-of-state or even out-of-country travel. They may be extended pension rights or access to a 403b deferred compensation plan.
The salaries and benefits for superintendents, financial officers, heads of personnel and board members are not the result of any union activity. None of these jobs are governed by teacher union contracts and all of the costs for salaries, benefits and “other” are paid by the tax payers, the real losers.
Teachers, unlike administrative employees, are compensated by salary, benefits and sometimes certain high end working conditions. (To a teacher just having a supply of paper clips constitutes a “high end” working condition!)
Repeat: teachers are paid on an entirely different salary scale and that fact has nothing to do with union activity. Union-busting will have no effect on the use of a salary scale. In addition to the changes that a stabilized salary scale might call for, bargaining has also resulted in teachers volunteering to take a salary decrease, or to add “frozen zones” in the salary matrix, or to drop any extra stipend for teachers who go back to school, at their own expense, for a Master’s Degree or a Doctorate. Teachers have also agreed to permit the district they work for to increase tenure requirements, to hire long term substitutes for very small wages, to agree to loss of a supplies budget, work more days for the same salary or to forego any planned salary increases that have already been agreed to.
Teacher salary scales are usually based on:
1. the actual number of years of teaching experience as a full time, certified, vetted public school teacher in the subject area covered by the job contract offering:
2. the actual amount of college/university training that the applicant has already completed, exclusive of the actual state granted teacher certification – usually measured by the degrees held (minimum is BA which equals four full years of successfully completed coursework but can include a Masters degree or even a PhD degree);
3. the actual years of experience of successful teaching which that specific school district chooses to credit. That might differ widely from district to district. One district may choose to credit only three years while another might credit ten. The more years of successfully completed teaching experience that a district decides to credit usually results in a higher placement on the salary scale.
For example, a new college graduate might apply for a job opening to teach a second grade class. That applicant must already have completed the coursework required by the State’s Board of Education for an Elementary School Teaching Certificate. The tax payers do not pay for the applicant’s training. The tax payers do not pay for any additional coursework that the State requires in order for the applicant to retain a valid teaching certificate. The applicant must also provide certified copies of college/university transcripts amd certificates – again at her/his own expense. These certified copies are not cheap to get, but the tax payers do not pay for them. The applicant might also be required to provide proof of certain medical tests proving disease free status from communicalble diseases (such as TB). Initial state certification may have already required that fingerprints be taken by the local police and then submitted to the FBI and checked by the FBI as part of a criminal background check. If the state has waived on this, the applicant can be required by the local district to go through the FBI finger print criminal background check anyway. Whether state or locally required, the cost of taking finger prints and having an FBI check is paid by the applicant, not the district and certainly not the tax payers.
Now after all of that – the expense of the training, the expense of providing whatever information the state and local district wants, the time spent on a resume and on completing a job application, the applicant can actually be considered for the job.
That means interviews with the district personnel office, interviews with the superintendent and members of the local board, the school principal and usually an interview conducted by teachers and/or parents with children who will be attending the school.
IF HIRED, the salary scale that has been adopted by the local board is the controling factor on what the newly hired teacher will be paid.
If this is the first year of teaching, then the teacher will be paid the amount cited for a year one teacher, with a BA (or whatever degree the local school board has voted to regard as part of the salary scale) – in this case the newly hired applicant will have zero years, and will have to complete one full year of contract days to be credited for placement on the year one slot.
Those “double dipping” claims that anger folks are affected by the state teacher retirement pension plan rules. For every dollar earned by returning to any school system covered by the pension plan the state pension plan has provisions that limit the total amount that can be earned before the annual pension amount enters a deduction phase. At that point the teacher’s pension amount suffers a dollar for dollar deduction.
What private business has the right to tell its retired employees that any work the retired person is hired to perform anywhere in the private business sector will result in a potential decrease dollar for dollar from their private pension plan?
Also, the prior amounts of contributions to Social Security by a teacher who has retired are completely nullified. State pensions are governed by both the “windfall profits” exclusion and the “government offset” exclusion. That means the payments made by the retired teacher to Social Security, in past, current or future jobs, will result in any eligible pension amount from Social Security being withheld from the retired teacher’s state pension.
And that’s dollar for dollar. Any election that sets aside state pension amounts for spouses or other persons will have the same treatment, a fact that surviving spouses often learn about when their own social security pension is reduced when their husband or wife passes away and their status as a surviving spouse suddenly changes their own Social Security pension amounts.
And that series of burdensome restrictions explains the difference between what teachers pay into their pensions and what districts pay. The “extra” is the amount that the federal government believes it owes to the teachers and surviving beneficiaries because of previous payments into Social Security.
That “difference” represents contributions already made by TEACHERS, not tax payers. The fact that the payments are made to the State Government, which is supposed to apply them via district paid contributions to the teacher pension fund is just one of the dirty little secrets that Governor Kasich will not tell the voters.
Anyone usuing the difference between teacher paid pension contributions and district paid contributions as a “double dipping” is just wrong. It isn’t double dipping for teachers who paid into Social Security during their work life that had nothing to do with public employment to be cheated out of the benefits that were agreed to by the Federal Government before the teacher ever worked for a state or local government.
In fact, if a teacher wishes to continue in Social Security contributions, she must pay both the employee and employer portions. And the offsets and windfall profits exclusions will still apply!
Anyone interested in doing some research can always check out the Trust Fund web information. As for the transparency of State or local governments – just try and see for yourself. Nothing is murkier than State and local governments, especially when finances are the topic.
All of this information can be verified. Any government employee commenting on teacher pay, pay scales, union activity or state restrictions on collective bargaining rights should know all about these material points. If they talk as though these material points don’t exist then consider them too stupid, or too lazy, or too self-serving or too corrupted by ideology of the special interests to remain in power.
All elected public officials and each and every one of the Ohio public employees who have the power to disenfranchise public workers of their bargaining rights must be held to this high standard: absolute honesty, first time, every time, all of the time. If this isn’t enforced by the voters then the voters need to insist on having complete autonomy on where assessed tax receipts, of whatever name, on whatever item or service, charged by whoever and applied anywhere in the process from beginning to the end point of payment can go. Let the government assess taxes, but let the tax payers choose which of those costs they want to pay for first.
That is a tax plan that any tax payer can support. It allows those elements that the community believes are essential to be treated as essential. As a “voting” right it is not open to any “non-person” large corporation or union. And it puts elected officials on notice that any assessment of taxes doesn’t just have a “pay-go” requirement. Tax payers must have the right to vote with their dollars, as this seems to be the only way the people can really give or withhold consent.
Offer to moderate is declined. Please delete my email. Suggest you post your requirements at the beginning and in real time rather than waste time of site visitors.
If you don’t want opinions and information that differ from yours, just say so. But please, right at the beginning. That is just common sense, right?
Double dipping is wrong and legislation needs to be instituted to correct this drastic problem before PERI goes broke.