Thursday, February 17, 2011
Why is the Retirement Percentage so Important?
I have been sitting in Legislative Committee meetings for four years now and the retirement percentage comes up regularly. I believe I understand it now enough to explain it to others. Under the 1963 constitution when the school aid fund was established and again under Proposal A of 1994, it stated that school districts would be responsible to pay for their employees retirement. This sounds reasonable. The individual school districts are not responsible for their own retirees, however, they receive a percentage from the state that tells them what percentage of every dollar in salary and benefits paid to today's staff have to go to the state pool of retirees. In the early 2000's the percentage was close to 10-12%. This year, it was estimated to be 19.5% but then in October was recalculated to 21.06%. This is a huge amount of money that is calculated to go up for next year to 24-27% of every salary/benefit dollar spent. This is another cut in funding for today's teachers to teach today's students.