“The words being used to describe this year’s omnibus pension bill are more dramatic than those from previous legislative sessions. Legislators and lobbyists are referring to it as “shared sacrifice,” and one GOP state representative even used the term “bailout.” The rhetoric isn’t all that overblown, unfortunately. The three major pension plans face billions of dollars in funding shortfalls and are on an actuarial track to go broke in the early 2030s if no action is taken.”
Using the RW school district as an example, there is about $20 million in payroll covered by either TRA or PERA. Under the proposed Omnibus Pension Bill, starting next year, employer contributions (think tax increase) would increase .5% each of the next for years.
2011- .5% = $100,000
2012 – 1.0% = $200,000
2013 -1.5% = $300,000
2014 – 2.0% = $400,000
That’s a tidy amount of $1,000,000. The latest two year teacher contract added $600,000, and add that same number for the two years after that for $1,200,000. Put together, employer contributions and salary increases over the next four years, $2,200,000, either in tax increases, more layoffs, or a combination. Where does it end?
Of course, we haven’t talked yet about City and County employer pension contributions. The mind wobbles. Add in a cool $million for them. So, $2 million total for either more budget cuts or more taxes.
By the way, how is your 401K and I.R.A. doing? Click the chalkboard to go to the article.
Update: The Legislature sent this bill to the Governor, which he signed. He didn’t want to because he felt it included little reform, yet to not sign it would further swell the deficit. 5/16/2010