The unreality around here is .... harrowing. You hear people say that "we" ("we" as in the school district) don't pay pensions (the state does), and the state should begin paying for mandates, too.
Of course, if the state were to begin paying for mandates, we'd be spending more on mandates, not less, because we'd be paying for mandates in Yonkers as well. Yonkers is broke, but they've still got mandates.
Nobody understands retiree benefits, either, including me. The Irvington school district, population roughly 7000, has a liability of $101 million for retiree health care. A friend of mine, an accountant, says that we are "fundamentally bankrupt."
What I don't understand is: when does the shoe drop?
Does it have to drop?
Or can we just go on like this forever, paying health care for all current teachers and all retired teachers as we go?
If we can't go on like this forever, when do we end up like Stockton?
Stockton: 292,000 citizens; $400 million retiree health care liability
Irvington: 7000 citizens; $100 million retiree health care liability for the school district alone
"Stockton officials awarded [retiree health care benefits] to city employees in a series of votes in the 1990s but made no effort to fund them, intending simply to pay costs out of their budget as workers retired. As hundreds did just that over the years, the costs grew. Next year, the city's fiscal documents project, retiree health costs will surpass those of the city's regular work force. At last count the city's unfunded liabilities for retiree health care are above $400 million.I gather we've got at least one current board member who thinks retiree health care costs are nothing to worry about; that $101 million is a paper liability, not a real one.
Stockton Mayor Ann Johnston voted for these expensive measures when she served on the city council. "We didn't have projections into the future what the costs might be," she told the Record, a Stockton newspaper, earlier this month. She added, "I learned that you don't make decisions without looking into the future."
Council votes to approve ever-greater benefits were often unanimous, according to Record columnist Michael Fitzgerald. "Nobody gave thought to how it was eventually going to be paid for," says Mr. Deis, the city manager."
How Stockton, California Went Broke in Plain Sight by Steven Malanga
I fear we've also got at least one person running for school board who has told parents that 'we don't pay pensions,' and another who told me personally, when she was serving on the board two years ago: "We're parents. We can't deal with unions."
My accountant friend tells me that when he ran the figures he found that Irvington teachers in the first 17 years of their careers receive average 5% raises each year, not counting "grid increases." ("Grid increases" are the across-the-board increases in everyone's pay the union negotiates every 3 years when the contract expires.) Add in the grid increases and teachers have been averaging something in the neighborhood of 7%, I think. Year in, year out. With inflation running at 2% until the crash, below 2% since.
I gather, too, that NY has some kind of law forbidding local school boards from working together with other boards in union negotiations. The union has national backing and expertise to draw upon; the volunteers who serve on local boards are on their own.