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Public Pensions and Health Coverage

When I went to the University of Dayton, one of my housemates was studying Elementary Ed., and he majored in what he called "Kiddy Lit" or Children's Literature. This friend of mine was the butt of many jokes because a degree in Elementary Ed was a ticket to what we thought was a lifetime of poor paying jobs. Were we wrong! Over the past few decades, government jobs, and I include teachers and police in this broad category have gone on to outdistance the private sector, not only in pay, but in benefits, notably retirement benefits and health coverage. Who could have predicted the salaries and pensions that are available in some of these fields and while we the taxpayers helped to create the systems and scenarios that educate our children and protect our communities, the continued funding of these salaries and benefits is unsustainable. Education is a critical component of the development of our children and society yet in some locales the high cost of public education is driving property taxes up annually. How can we as a society continue to fund and pay for systems that seemingly cost us more than we as a group can afford. The Unions will decry heresy when they read this, and they must do so to stay in business and protect their members. Unions were never created to allow one side to have an advantage over another. Unions came into prominence in the early and mid 20th Century to level the playing field in labor relations not to put the Unions and members in positions of dominance as some are. American society has some tough choices ahead. The fiscal tightrope act that all levels of government are walking can not continue. What happens to America if the European Union falters? What happens to the free world if Iran or North Korea start acting up with their nuclear weapons? We Americans must once again recreate ourselves into a financially sustainable society. Tough decisions must be quickly and with great wisdom. All sides and all levels of America will be forced to compromise for us to survive and grow and move forward. This will take courageous leaders, in government, labor and society. Anyone interested?

Bill O'Neill

7:05 am on Saturday, February 11, 2012

Well put. When these people retire, sometimes after only 20 years, it is like winning the lottery that the rest of us are paying for. We have no choice but to change the pension system and everyone knows.

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Anne

8:26 am on Saturday, February 11, 2012

When will the rest of "our board members" and politicians stop sweeping this under the rug!

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JSC

10:10 am on Saturday, February 11, 2012

And I was going to say, this is just old news rehashed! We've all heard about this over and over so I was curious as to why it's being brought up again as if we don't all know about it.

Regardless, at least when it comes to teachers in NY, local school boards have nothing to do with how the pension system is set up. The only factor they have a hand in is how much they pay their own teachers - and even in that regard, they only have partial control. Negotiations are two-sided and not in the district's favor.

No teacher retires after just 20 years unless they are fine with getting a highly penalized pension! A minimum of age 55 and 30 years is required for teachers in Tier 2. Not sure about the exact requirements of the 3,4 and 5 tiers, but more years on the job, more years before being vested and an older age before retirement at full pension have been enacted. The state is now talking about a Tier 6 with even stricter rules and a different type of pension.

So outside of the older Tier 1 and 2 teachers, pensions aren't as "cushy" as they used to be. Most districts are also trying to cut any salary increases in new contracts - you probably won't be seeing any 3,4% type increases as in the past. New hires will be working longer and contributing to their pensions their whole careers from now on.

As to the rest of the blog I'd say, sure, public pensions have some effect on our economy, but they sure aren't the only problem in this country!

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Patricia

10:58 am on Saturday, February 11, 2012

It time for the Board of Education to educate themselves to the reality of business. The model they wish to create for themselves needs to be derivative of the private sector, which is not wrapped in a securithy blanket of constantly increased revenue. We experience pay cuts, complete loss of retirement accounts [no safety net here], taking on the work load of those who used to work along side us and were laid off, and the constant threat of the companies we work for folding. The only alternative to tolerating what is the current market value of our employnment is to be without a job completely; take it or find the door. Does the BOE understand any of this? And finally, how many of us taxpayers have our eyes on a move OUT of this hi-tax area? My child will never afford to live in Northport anyway. Educators, eductate yourselves. Please.

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Free 2B Me

11:33 am on Saturday, February 11, 2012

@Patricia... if you think that your local Board of Education controls the pension system, I think that you are shining the "educate themselves to the reality" spotlight in the wrong direction.

BOE's are not the problem... it is your NYS legislators that need to reject campaign contributions from the New York State United Teachers and propose legislation that will relieve the burden placed on taxpayers.

Nick Folger

11:53 am on Saturday, February 11, 2012

the boe controls who they hire and at what salary which is directly tied to the amount of pension an employee receives when they retire. The first door to the pension nightmare opens at the local level
blaming Albany for the cost of employees is kicking the can down the road

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Concerned Citizen

12:51 pm on Saturday, February 11, 2012

@ Nick
Are you kidding?! The pension system was set up by legislation and has been under the direction of the NYS Comptroller, the Governor, and NY Legislators from a time that are grandparents were in school. You frustration with the BOE is like screaming at the rain. It is this type of thinking that is standing in the way of the progress you seek.

Nick Folger

1:37 pm on Saturday, February 11, 2012

Reality check....yes the pension benefits etc are determined by the state..but who gets on the payroll is NOT determined by the state. That was my statement. As an example, why is it necessary to have maitenance, security, food services to be on the payroll? (and please don't say that it is for the sake of the kids because any outsourced service would be out in a flash if the services do not meet expectations). How much in benefits (all benefits, not just pension) would be saved if some of these services were outsourced? Is this such a foreign concept to grasp?

How does this thinking, or my statement, for that matter, is "standing in the way of the progress...."

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Jerry Hannon

3:26 pm on Saturday, February 11, 2012

In your post about possibly outsourcing several functions, Nick, you apparently don't realize that services which are presently subject to collective bargaining agreements with a school district, Northport's included, CANNOT be arbitrarily or unilaterally outsourced by the district.

You and I can agree that districts should be able to outsource function "X" or function "Y", but only the State Legislature and the Governor, together, can change the law in NY State, which is what it would take in order for school districts to do what you propose.

I think that you don't really understand all that the State has done to unmercifully burden school districts and their BOE's.

It almost seems as if your own frustrations with the Northport BOE have blinded you to numerous truths, and you would rather blame the messenger than actually fix the State-imposed problems.

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Nick Folger

12:07 am on Sunday, February 12, 2012

Jerry,
I am very aware of the collective bargaining rights and the handcuffs it places on organizations But I am sure you know how the payroll could be trimmed to slow the pension bleeding. HHH has done it and businesses with unions have done it too. If it not through a layoff it is done with a buy out

But it still comes to who first decides to put these services on the payroll and that decision did not rest with NYS. School districts outsource many professionals such as speech, physical, therapists (who have direct contact with children) on a regular basis. Why couldn't the same decision be made for other support services?

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Jerry Hannon

12:48 pm on Sunday, February 12, 2012

Nick, it's perfectly fine to outsource things that are not already done, within a district, under a collective bargaining agreement. I don't know of any district around here that has a union of speech therapists or occupational therapists or physical therapists, so, yes those could be outsourced, and effectively they already are with independent contractors.

But, your current BOE, and even the one prior to that, and the one prior to that, etc etc etc -- until you get to maybe twenty or thirty or more years ago -- are not the ones who engaged a particular segment of professionals or paraprofessionals or skilled workers etc, for your district.

But, your current BOE are the ones who are hamstrung by NY State laws and regulations as to whether, or not, they can outsource a function currently subject to a collective bargaining agreement.

Please, please, please, try to understand where the big CURRENT problems really are, namely the restrictions enabled by the State Legislature and the Governor, and don't blame a current BOE, or a current Superintendent, for things put into place twenty or thirty or more years ago.

The BOE and the Superintendent can't change them, due to State laws and regulations; the Legislature and the Governor can.

Concerned Citizen

3:54 pm on Saturday, February 11, 2012

Because you do not take time to learn the law or the facts. You think it, therefore it should be. The conspiracy theory you imagine is beyond reason and divisive; hence, no progress!

Fact - food service is, by law, expected to be self-contained and of no consequence to the taxpayer. Expenses and revenues of your school lunch program are independent of your budget. There are areas that could potentially be outsourced, but making those changes must be a result of collective bargaining. If your BOE and administration were to simply announce that some of these services would be outsourced, there would certainly be an improper practices challenge filed with PERB (Public Employee Review Board) and the district would be stopped from outsourcing the work. It has been tried many times before in many districts and the result was always the same. This is law my friend and if you want to suggest change I would lobby our state senator and assemblyman, not the BOE.

And besides, how do you know these services would be cheaper and well managed if they were outsourced? Or is that just another idea you did not research?

Look, your thinking is not necessarily flawed; however, the way you continue to shoot from the hip and say things, while not taking the time to really know the facts surrounding what you’re talking about is extremely frustrating.

The pensions are too big because schools hire people to prepare and serve lunch and maintain school buildings – come on man!

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Nick Folger

12:12 am on Sunday, February 12, 2012

So who funds the lunch service when it operates at a loss because the food service employees' benefits exceed any profits that come from selling food? Does the money come from a tree? I think some facts have to checked on that one,

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Concerned Citizen

10:29 am on Sunday, February 12, 2012

Nick... If the lunch program operates at a loss it must be fixed... Don't stretch facts fo make a point. You beginning to sound like the angy social outcast that stands on the street corner of 5th avenue and screams at the rain.

JSC

9:24 pm on Saturday, February 11, 2012

In addition, people like the food service workers, buildings and grounds, nurses, secretaries and such are not in the teachers pension system, they are part of what is called the Employees Retirement System.

Yes, BOE's control who they hire, but contracts in place dictate how much that person is paid. Negotiations set what benefits are given and how much the employee contributes to them, so the boards do have some say on this, but precedent doesn't allow them much leeway.

Outsourcing is impossible when there are already district employees doing that particular job. However, something like who provides the food that the district's food service workers cook and serve can be outsourced - our district does this.

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Nick Folger

1:03 pm on Sunday, February 12, 2012

JSC
school districts negotiate the contracts and establish contracts. I believe, in general, it is the attorney and management that does the negotiating and the board votes on it. So, I agree with you, the board really doesn't have much leeway. the heavy lifting is done by management.

Which district are you referring to that outscources the food service?

Nick Folger

12:56 pm on Sunday, February 12, 2012

cc
according to northport's website, the school lunch fund operated at a loss last year. profit from sales and cost of food was $100K. The employee benefits were $300K, which produces a loss of $200K. of course that loss has to be covered by the general fund as you mentioned, which is what is voted on. Those are the facts. I recall reading in the local papers that a point of sale system was put in place. If that system recovers a $200K loss, well there may be a bigger problem than just operating at a loss. Frankly, I think that a small portion of the loss could be recovered but the employee benefits are just growing at a faster pace than the profit from the food service. It is a no win scenario until it entire service is outsourced.

Please don't shoot the messenger if you don't like the message, so I will not respond to the shouting at the rain comment.

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Free 2B Me

4:08 pm on Sunday, February 12, 2012

Nick, no need for any messenger shooting. School lunch programs are run on their own budget and keep their own reserves. It is the only element of public education that you pay to play, That is why kids pay for lunch. Low income children may qualify for free or reduced lunch and that money is provided by the government, not your r/e taxes or connected to the annual school budget.

If your district operated its school lunch program at a loss, the difference would have been charged to the school lunch fund reserve which is seperate and distinct from the general fund.

The price of chicken nuggets quadrupled tomorrow, it will NOT increase your real estate tax bill, but your kids may need to pay another quarter for lunch. If the cafeteria workers negoitate a better contract, it will NOT increase your tax bill, but the cost of milk may go up a nickel.

Take it from me cause I'm Free 2B...

Me

Nick Folger

1:15 pm on Sunday, February 12, 2012

Jerry...
Blaming Albany for all the woes is no excuse for not doing the due diligence, as I saw you suggest in another blog here or there..
I totally get the handcuffed position school districts are in. But I simultaneously applaud districts like Elwood and HHH whose governance structure promotes transparency, community involvement, and due diligence in spite of the handcuffs and thus does not polorize a community.

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Jerry Hannon

3:27 pm on Sunday, February 12, 2012

You & I are not in dispute, Nick, about the value of both transparency & citizen involvement; that is a message I had been trying to make, privately, to some Northport trustees.

When Arlene Munson was BOE president, at one BOE meeting there was a heated discussion relating to whether there could be a whistleblower provision that went outside the BOE. As a charter member of Elwood's Audit Committee, & as a member of our predecessor entity (i.e., before NY State required audit committees) the Financial Oversight Advisory Committee, and reasonably familiar with relevant provisions of both Education Law & the Public Officers Law, I tried to suggest that Northport's Audit Committee could serve in such an interface capacity, but her response -- while polite -- was rather curt & dismissive.

That attitude, on her part that night & on the part of a few Northport trustees I observed other nights, contributes to a perception of conflicts between the BOE & any citizen who is not considered friendly to the BOE & the district administration.

On the other hand, there are a few people in Northport, some longstanding and some of more recent vintage, whose frequent hostility without sufficient restraint may be another part of the reason for a majority of the BOE to circle their wagons in defense, without sufficiently opening their minds.

My perception of Steve Waldenberg, until I basically ceased attending Northport BOE meetings in 2009, is that there may be hope for change.

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Phil Dalton

6:57 am on Monday, February 13, 2012

I think it's about time a local millionaire told working class people how much they should be making in their jobs. Nobody should know better how much the working class is struggling than an aloof rich person. EVERYONE should know that in three years, the value of ALL US STOCKS has nearly doubled. The stock market is worth $9 trillion more than at the start of the Obama administration. At the same time, take-home pay has gone up 2%.

That's why I wince when Daddy Warbucks here starts telling people how unsustainable livable salaries are. This is a transparent war on working people.

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Robert W

1:44 pm on Monday, February 13, 2012

Finally someone who gets it!

Nick Folger

8:52 am on Monday, February 13, 2012

@Free 2B Me

A few points to your response.
1.School districts are not permitted to establish reserves for food service. See
http://www.osc.state.ny.us/localgov/pubs/lgmg/reservefunds.pdf
However they are permitted to establish reserves for employees retirement (not teachers) and workers comp and unemployment and a limited list of others, but not lunch.
2. In order to create a reserve the entity has to be profitable. As indicated previously, according to Northport's website, the food service operates at a loss which is driven by the cost of food service employee's benefits, not the cost of its sales, including the cost of chicken nuggets sold. In other words, the food service was profitable from selling food to the kids, but employee benefits wiped out that profit and more.
3. If the Northport website was searched , their board had to approve a resolution that transfers money from the general fund to the food service fund to cover the loss. therefore the general fund would include a budgeted amount for that transfer. A community votes on the general fund.
4. Whether the content of your blog was a joke or not, either way it is disturbing if it is included as a basis for voting on a school budget

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Free 2B Me

10:42 am on Monday, February 13, 2012

http://www.osc.state.ny.us/localgov/pubs/arm_schools.pdf

Page 17 (link above)... don't need to be profitable per se, it is a special revenue fund. If Northport is not running the school lunch fund on its own p&l that sounds problematic. Northport also tends to have plenty of excess money at the end to the year, so they may be spreading the wealth (I don't know that for sure).

I'm on the Elwood side of the fence and know that Elwood's school lunch program runs as a separate entity. As to you considering my blog entry to be a joke, my husband will appreciate that... he thinks I'm always as serious as heart attack, but I am Free 2B Me.

JSC

9:53 am on Monday, February 13, 2012

This company serves several districts in food service.

http://www.whitsons.com/school_nutrition.html

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N'prtr

12:00 pm on Monday, February 13, 2012

I would venture to guess that 98% or more of the food service workers in Northport are our neighbors, primarily women that supplementing their family income. They also pay school taxes and contribute to our community by providing our children with a level of service and care you will not receive from an outsourced company. Let's not forget outside companies are there only to maximize profit. They will not care for our kids and provide the same levels of "motherly" concern we have now. Food service costs are minimal at best. There are much bigger fish to fry including state mandates, ineffective and costly programs directed at extremely select populations, out of control special education costs, excessive administrative personnel that generate tons of paperwork, little of which has to do with bettering classroom instruction.

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JSC

12:35 pm on Tuesday, February 14, 2012

In my district the food service workers are the same people we've always had, local women. The company, Whitson's, provides the new menus, foods and brought in several new kitchen serving centers etc when our high school cafeteria kitchen was redone many years ago. The company included kids and parents in the process to create new menus. And yes, cafeterias must be self-sustaining.

kptree

1:58 pm on Monday, February 13, 2012

So let me see if I can understand. Mr. Kehoe would like to return to a past where choosing to teach or work for the government is a "ticket to poor paying jobs". Where he and his friends can continue to make someone who chooses to educate our children the butt of their jokes? Righhhhttt... While I support pension reform for educators and all public servants- the time has come for them to structure and pay for their own retirement- the suggestion that public employees return to salaries that amount to "workfare" is patently ridiculous. There are so many things need to be reformed- 1. health insurance costs 2. unfair taxation of the middle class and poor 3. an inefficient, redundant duplication of services over many school districts
- that to paint the salaries and benefits of public employees as cause of our current economic woes is like claiming that bogeymen really do exist.

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Jerry Hannon

4:46 pm on Monday, February 13, 2012

Now, here is a statement, by kptree, that I find basically on target and reasonable: "There are so many things need to be reformed- 1. health insurance costs 2. unfair taxation of the middle class and poor 3. an inefficient, redundant duplication of services over many school districts - that to paint the salaries and benefits of public employees as cause of our current economic woes is like claiming that bogeymen really do exist."

Yes, we need to right-size the compensation of public sector workers, because it is currently mostly paid for by people who have suffered much more, economically. But, that is not the only fix to be sought, and those who pretend that those compensation (pay and benefits) reductions, or else much greater cost-sharing by the same public sector employees, are the only necessary part of a system-wide solution are either ignorant, or despicably selfish.

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