God­shall needs to fo­cus on pen­sion re­form, fund­ing

Souderton Independent - - OPINION -

To the Ed­i­tor:

Many of you read­ers in the 53rd dis­trict re­cently re­ceived a nice glossy “cam­paign” brochure from Rep. Robert God­shall ex­tolling the ac­com­plish­ment of pass­ing a state bud­get on time that does not raise taxes. Con­grat­u­la­tions but no big deal for any sin­gle rep­re­sen­ta­tive. Mr. God­shall is only one of 201 rep­re­sen­ta­tives in the House and there were no nay votes by ei­ther Republicans or Democrats for pas­sage of the bud­get. That said, there are sev­eral er­rors or mis­state­ments in this brochure.

The brochure claims “Soud­er­ton and North Penn school dis­tricts will see an in­crease in ba­sic ed­u­ca­tion fund­ing.” It ap­pears that Mr. God­shall is mix­ing the wHOO-GHfinHG WHUPs RI EDsLF ed­u­ca­tion and ac­count­abil­ity block grants with the unGHfinHG WHUP RI HGuFDWLRn fund­ing. A chart in­cluded in this brochure ti­tled “Ed­u­ca­tion Fund­ing” presents the fol­low­ing data”

North Penn Dis­trict — $20,728,534; $23,873,038; $3,144,504

Soud­er­ton Area School Dis­trict — 2011-12: $15,006,749; 2012-13: $16,470,356; In­crease: $1,463,607

The claim that Soud­er­ton will see an in­crease in ba­sic ed­u­ca­tion fund­ing of $1,463,607 is in­cor­rect. Ba­sic ed­u­ca­tion is bud­geted ex­actly the same for most school dis­tricts this year (2012-13) com­pared to last year (2011-12). Soud­er­ton ac­tu­ally re­ceived a $4,099

School 2011-12: 2012-13: In­crease: in­crease; prob­a­bly a cler­i­cal er­ror. Sim­i­larly the claim that “restora­tion of $100 mil­lion in Ac­count­abil­ity Block Grants will pro­vide most school dis­tricts in Penn­syl­va­nia with an in­crease in over­all fund­ing in the new aca­demic year” is also in­cor­rect. The leg­isla­tive in­tent was to also level fund the AGB pro­gram. Soud­er­ton will re­ceive $163,572 in 2012-13 — ex­actly the same as in the pre­vi­ous year. Bot­tom line: both the ba­sic ed­u­ca­tion sub­sidy and the Ac­coun­tDELOLWy BORFN DUH flDW IunGHG this year com­pared to last year. There is no in­creased state sub­sidy for ei­ther of these pro­grams as claimed in the brochure. I am sure the same sit­u­a­tion ex­ists for the North Penn School Dis­trict as well as for all school dis­tricts in Penn­syl­va­nia.

Ex­ac­er­bat­ing the claims made in this brochure, The Re­porter on July 3 stated Bob God­shall said, “He would like the school boards to re­open their bud­gets and re­duce the real es­tate taxes that they’ve im­posed on area res­i­dents.” Ap­par­ently he based this on the nonex­is­tent year-over-year in­creases in ba­sic ed­u­ca­tion fund­ing and Ac­count­abil­ity Block Grants.

So where is the in­creased fund­ing claimed by Mr. God­shall? There are sev­eral ad­di­tional ed­u­ca­tion sub­si­dies that are largely de­ter­mined by on­go­ing well unGHUsWRRG fixHG IRUPuODH such as em­ploy­ees’ So­cial Se­cu­rity, stu­dent trans­porta­tion and em­ploy­ees pen­sions. Of these, the em­ployee pen­sion sub­sidy is the real prob­lem given the woe­fully un­der­funded pen­sion fund. Pen­sions are funded ap­prox­i­mately 50 per­cent by school dis­tricts and 50 per­cent di­rectly by the state. The state must in­crease the sub­sidy to school dis­tricts in or­der to meet its share of the pen­sion obli­ga­tion. For Soud­er­ton, the pen­sion ex­pen­di­tures for teach­ers and non-teach­ers will in­crease $1,731,794 to a to­tal of al­most $6 mil­lion for 201213, com­pared to about $4.3 mil­lion the pre­vi­ous year (2011-12). This means the state must in­crease its sub­sidy by al­most $867,000. The cost of pen­sions for Soud­er­ton is al­most 5.6 per­cent of the to­tal bud­get and it will continue to in­crease next year and for many years to come.

As I have stated on pre­vi­ous oc­ca­sions — and it bears re­peat­ing — the bulk of this in­crease is due to leg­isla­tive tam­per­ing. It be­gan in 2001, when the Leg­is­la­ture in its wis­dom voted to in­crease their pen­sions by 50 per­cent and to in­crease pub­lic school em­ploy­ees’ pen­sions by 25 per­cent. The fol­low­ing year, due to an out­cry from cur­rently re­tired em­ploy­ees, the Leg­is­la­ture re­sponded by pass­ing leg­is­la­tion that gen­er­ously in­creased pen­sions for re­tired em­ploy­ees. Both of these im­pru­dent ac­tions added sLJnL­fiFDnW IuWuUH SHn­sLRn OLa­bil­ity far greater than could be met by the fund bal­ance. The ob­vi­ous rem­edy would have been to in­crease pay­ments into the fund by both the em­ploy­ees and school dis­tricts. Again in its “wis­dom” and ig­nor­ing ac­tu­ar­ial data that re­quired in­creased con­tri­bu­tions to re­store the pen­sion fund, the Leg­is­la­ture “kicked the can down the road” for a 10-year pe­riod by ac­tu­ally re­duc­ing school dis­trict’s con­tri­bu­tions. Adding to these se­ri­ous leg­isla­tive mis­steps, in­vest­ment re­turn on in­vest­ments was im­paired due to the eco­nomic re­ces­sion. Bot­tom line, ab­sent prompt and se­ri­ous pen­sion re­form, tax­pay­ers are on the hook for se­ri­ous pub­lic school tax in­creases for years to come Ln DGGLWLRn WR nRUPDO Ln­flD­tion just to meet pen­sion obli­ga­tions.

Not only is Mr. God­shall a for­mer Soud­er­ton Area School Board mem­ber, he has now served 30 years as our state rep­re­sen­ta­tive. As such he holds a spe­cial re­spon­si­bil­ity for en­act­ing leg­is­la­tion im­pact­ing the FRsW DnG finDnFLnJ RI SuEOLF ed­u­ca­tion over that pe­riod of time in­clud­ing the cur­rent pen­sion crises. As a for­mer school board mem­ber my­self, I am well aware of the costly “un­funded man­dates” that have been loaded into pub­lic ed­u­ca­tion by our Leg­is­la­ture over the years that con­trib­ute noth­ing to ed­u­ca­tional out­comes but do con­trib­ute sLJnL­fiFDnWOy WR WKH FRsW RI pub­lic ed­u­ca­tion. I hope that Mr. God­shall would turn his leg­isla­tive lead­er­ship to much needed pen­sion re­form and re­moval of these costly man­dates as the real an­swer to en­abling school boards to re­duce the real es­tate taxes. R. Paul Baum­gart­ner


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