Scott Shafer, veteran business manager of the Lower Merion School District, following on Sunday's PhillyDeals column on Pennsylvania's projected jump in the school-pension subsidy and the property taxes that fund it, sent us more data supporting his claim this is a made-in-Harrisburg problem.
Last year, he noted, school districts paid the pension fund $7.13 on every $100 in school payroll to fund future pensions. This year, that rate was cut to around $4.76. But in 2012-13, the rate is scheduled to jump to $16.40 per $100. (That totals $2.6 billion, up from $595 million last year.
If they'd just kept the rate around $7.13 - as the Department of Education recommended, and the General Assembly "unfortunately" refused - the increase "could have been avoided," Shafer says.
To put the increase in context, Shafer also sent a table of historic school pension contribution rates. These varied from 8%-12% in 1961-76, rose above 20% by 1986, back down to 15% in 1992, below 10% in 1997, and nearly to 1% percent in 2002, before rising again.
Shafer says this shows Pennsylvanians have been underfunding the pension, compared to past years. But I reminded him the other public pension subsidy -- the "employee contribution" school workers pay -- rose steadily during that period. And school worker pay has been going up faster than inflation. They're all factors in higher pension costs, and property taxes.
Posted: December 16, 2008 - 3:14 PM
Joseph N. DiStefano
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