Godshall needs to focus on pension reform, funding
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