Findings from TUA’s pension project on Bloomington-Normal, Illinois, are featured in this story from The Pantagraph.
BLOOMINGTON — Jim Tobin, president of Taxpayers United of America, is traveling throughout Illinois, including a stop Tuesday in Bloomington, pitching his ideas for pension reform.
“Illinois is in horrible financial shape and yet taxpayers are still expected to pour their hard-earned money into a failed government pension system,” said Tobin. “The state’s in such bad shape. It can’t sell bonds; it can’t borrow money.”
Taxpayers United of America, which its website says was founded in 1976 as National Taxpayers United of Illinois, suggests, “Without sweeping and immediate reform, Illinois’ pension system will collapse.”
Tobin said reform must include: raising the retirement age to 67; increasing employee contributions by 10 percent; increasing health care contributions to 50 percent; eliminating all cost-of-living adjustments; and replacing the defined benefit system with a defined contribution system for all new hires.
While he used to lobby for reform, Tobin said he’s now “letting taxpayers know” through the media and by direct mail to TUA members and other known “activists.”
Tobin said the results of his organization’s new pension study of government employees in Bloomington, Normal, McLean County, schools and Illinois State University will be available on its website www.taxpayersunited.org.
The Pantagraph also has detailed pension information from a December 2011 series which can be found by clicking here.
Linda Horrell, communications director for the Illinois Municipal Retirement Fund that covers non-contract government employees in nearly 3,000 downstate local governments, said IMRF is not a state-funded pension system so it is not included in the state pension reform discussions.
IMRF is funded by employee and mandated employer contributions as well as investment income. Horrell said IMRF does not include compounded cost-of-living adjustments and doesn’t offer retirees health insurance. Recently adopted guidelines also change benefits for employees hired after Jan. 1, 2011, including raising the full pension age to 67 — up from 60.
Charlie McBarron, director of communications for the Illinois Education Association, said the IEA took part in a summit Monday to discuss the state’s pension problems. He said the organization is bringing numerous ideas to the table to solve the pension problems in a “fair and constitutional” way.
Illinois has a $96 billion pension shortfall.
Findings from TUA’s pension project on Bloomington-Normal, Illinois, are featured in this story from WGLT.
The head of a conservative anti tax group is publishing pension benefit amounts for retired McLean County teachers and government officials.
“And the biggest problem with Illinois’s catastrophic financial system are these lavish gold-plated pensions.”
Jim Tobin, the head of National Taxpayers United, says eliminating defined benefit plans and putting all new government workers into 401k accounts is necessary to rescue the state from fiscal crisis.
But, representatives for workers point out the group’s allegations of pension millionaires assume that retirees will live to age 85. Most don’t. They also accuse NTU of cherry picking data and using only top earners as examples, not the average retiree who receives between $32,000 and $46,000 depending on which union workforce is involved. Larry Alferink heads the ISU Annuitants Association and says state pension costs are not exhorbitant when taken as a portion of total compensation.
The cost of the pension system to the state of Illinois was 9.1%, recognizing that the cost of social security is 6.2%. So the actual cost of the pension system above what every other employer pays is less than 3%.
State employees, Alferink says, do not get Social Security and the state does not pay into that system for its employees. Alferink says private universities average at least 5% retirement costs above the 6.2% of compensation they contribute to Social Security. Alferink also notes the state’s problems stem not from the size of the pensions but from the state’s failure to pay its share of the costs over decades.
During the anti pension campaign stop in Bloomington Tobin said recovery will require Illinois to convert state workers to 401k accounts moving forward.
“They have to stop the government pensions for new government hires. That will eliminate all unfunded liabilities in the long run”
Tobin also wants the retirement age raised to 67 and workers in the current plan to pay 10% of their income toward retirement. Alferink says 401k systems typically do not work out so well.
“One out of every six people outlive their benefits and then they have to fall back on the state. In this case, since the state is paying for the pension system it doesn’t work out so well because they end up paying a second time when those individuals are destitute.”
Tobin’s group likes to claim that only 2% to 4% of lifetime pension benefits are paid by direct state employee contributions. But, Alferink notes that is misleading because nearly 70% of pension payments come from earnings on worker contributions over decades.
Rae Ann McNeilly, Executive Director of Taxpayers United for America, was quoted in the Sun Sentinel on a proposed pay hike for Florida teachers.
After years of frozen wages, pension reforms that ate into their pay and a new accountability system that will base pay on performance, the subject of teacher salaries in Florida is gaining new political attention.
State Rep. Kevin Rader, D-Delray Beach, and state Sen. Joe Abruzzo, D-Wellington, have filed twin bills in the Legislature to give teachers an average $10,000 pay increase, which they say would make them level with their national counterparts.
Gov. Rick Scott, in a separate plan, wants to give all teachers a $2,500 pay raise.
But some taxpayer groups and human resource consultants question the need for the latest proposals.
“[Teachers] are paid real well,” said Rae Ann McNeilly, executive director of Taxpayers of America. “Florida’s been hit harder than many of the states. I can’t see how it would be reasonable to raise anybody’s wages until Florida has more of a recovery.”
Local teachers unions, however, said after several years of cuts to education funding, it’s about time the state prioritizes teacher pay.
“We’ve lost more than salaries in this whole situation; we’ve lost respect for our profession,” said Debra Wilhelm, president of the Classroom Teachers Association in Palm Beach County, which represents more than 12,000 teachers. “They’re working two jobs; some of them are even on food stamps.”
Florida currently ranks 45th in average teacher salary when compared to other states. The estimated average salary last year was $46,232; nationally it was $56,643, according to U.S. Department of Education.
In Palm Beach County, teacher salaries range from $38,000 to $71,000; in Broward it’s $39,180 to $71,250. The pay scale generally assumes a teacher works 37.5 hours a week for 196 days, with summers and holidays off. But the National Education Association found they actually an average 50 hours a week.
According to the Bureau of Labor Statistics, on average, firefighters, police officers and nurses in the Miami metropolitan area who work year-round make more than teachers, averaging in the high $60,000 range. Social workers and retail supervisors, on average, make less — between $42,000 and $44,000 a year.
“I’m not sure that [teachers] are worse off than anybody else,” said Sara McAuley, board member of WorldatWork, a nonprofit human resource association. “Everybody is taking a hit right now.”
Dominic Calabro, president and CEO of Florida TaxWatch, however, said teachers deserve more compensation.
“We need to pay them to the point where they are esteemed again,” he said. He cautioned, though, that additional money should be tied to classroom impact and student achievement, not just longevity.
Teacher salary scales are based on experience, but Broward froze its wages for four years, Palm Beach County for five.
This year, both the Broward and Palm Beach county districts gave raises. In Palm Beach County, they averaged about a 3 percent raise; in Broward, it was slightly less than 2 percent.
Toni Freeborn, 51, a teacher at Coral Glades High School in Coral Springs, makes $39,000 a year, just $300 more than when she started six years ago.
Every day, she teaches seven classes, with a half-hour lunch break. She arrives 10 minutes before 7 a.m. but usually doesn’t leave until after 5 p.m. — often dragging home assignments to grade.
“We don’t get paid for the extra hours that we work,” Wilhelm said. “You have professions where you stay longer and you get paid overtime. Teachers don’t get overtime.”
Instead, many take second jobs.
Nicole Di Dio, 33, has been teaching at Westpine Middle School in Sunrise for three years. She works an additional 20 hours as an assistant manager at a massage therapy office to help pay off student loans.
“It’s hard to keep up with rent and car payments,” she said.
Gary Itzkowitz, of the 14,000-member Broward Teachers Union, said at least half his members have two jobs, “particularly some of our younger teachers that have been stuck on the lower range.”
McAuley said teachers make less than others with comparable college degrees. “Teachers start off with a lower base than someone in human resources or marketing,” she said.
But McNeilly claims that when you factor in pensions, health benefits and tenure, teacher compensation exceeds other jobs.
While the Florida Supreme Court ruled last month that public employees must pay 3 percent of their salaries toward their pension, McNeilly said those in the private sector pay about 7.5 percent toward Social Security.
“They’re one of the best-paid professions with the greatest job security … they’re guaranteed full coverage on their health care, guaranteed retirement benefits,” she said.
But better benefits doesn’t justify lower pay, McAuley said. “It’s just a slight offset.”
Rader, the state House member, said it was time teachers in Florida get a fair wage and respect for their work — in the form of a $10,000 raise.
He said teachers often deal with issues that extend beyond the classroom — such as the social, mental and economic problems of students — and don’t get compensated for it.
“In reality, when you go through all the facts, with the time they put in during the year, and the money they make, it’s not nearly as much time off in the summer that people think,” he said. “Our teachers severely have been making under the national average for many, many years.
“I realize it’s a substantial amount of money,” he said. But he remained hopeful the governor was starting to shift his focus toward education
.
“The Legislature, when it makes priorities, it always finds the resources,” Rader said. “I would say let’s cut back in FCAT testing.”
Scott, meanwhile, said there was “no better investment” than giving teachers a $2,500 pay hike. He called teachers the “heart of our success” as schools have continued to perform well on standardized tests despite recent cuts. The $480 million salary increase for teachers is part of his latest pitch to boost education funding by $1.25 billion next year.
Freeborn says until teachers get good news from Tallahassee, she will continue to bring a brown-bag lunch to school every day.
“I don’t go out,” she said. “There’s no extra money.”
“In reality, when you go through all the facts, with the time they put in during the year, and the money they make, it’s not nearly as much time off in the summer that people think,” he said. “Our teachers severely have been making under the national average for many, many years.
“I realize it’s a substantial amount of money,” he said. But he remained hopeful the governor was starting to shift his focus toward education
.“The Legislature, when it makes priorities, it always finds the resources,” Rader said. “I would say let’s cut back in FCAT testing.”
Scott, meanwhile, said there was “no better investment” than giving teachers a $2,500 pay hike. He called teachers the “heart of our success” as schools have continued to perform well on standardized tests despite recent cuts. The $480 million salary increase for teachers is part of his latest pitch to boost education funding by $1.25 billion next year.
Freeborn says until teachers get good news from Tallahassee, she will continue to bring a brown-bag lunch to school every day.
“I don’t go out,” she said. “There’s no extra money.”
