Teachers. Most people like to think kind thoughts about teachers.
On those occasions when they think of teachers they picture a favorite teacher of long past or a teacher that their kids tell them “they love.” We are constantly drilled with stuff like this…
Doesn’t that make you all warm and fuzzy?
Well, it turns out that, if you’re planning on your city, county, and state doing anything but going bankrupt, some teachers are your worst enemy.
We’ve all heard the whine about how little teachers make and how important they are. We’ll agree they’re important. Good teachers can help kids be successful in school. On the other hand, teachers’ retirement funds are going to break you.
Just look at Nashville, TN for starters. Nashville is a fairly conservative city when you compare it to it’s Northern, Eastern, and Western counterparts. But it’s still run by Democrats who see their role in life as funding teachers unions.
Can Nashville afford the retirement package it offers city employees?
Since 2002, the cost of Metro government’s retirement benefits, much of which are paid for out of the city’s current budget, has grown from 13 percent of the total property tax revenue to 25 percent of property taxes.
The retirement costs now account for 9 percent of the city’s total budget.
Retirement costs have been increasing at an average pace of 9 percent a year during that 12-year span…
True, the article is talking about all city employees, but guess who makes up the bulk of city employees. Teachers. Nashville’s pension plan is in much better shape than most public pensions, it’s funded at about 80%, but only because the city has tripled its contribution to about 19% of payroll cost.
Here’s the bigger problem.
According to a report from the Pew Charitable Trusts, the health care plan, which is funded out of the city’s current budget, faces a long-term shortfall of at least $2.4 billion if the city does not adjust the benefits it offers.
What do you want to bet the City starts looking at dumping retirees into ObamaCare?
Nashville, as we noted, is better off than most places.
Total unfunded teacher pension liabilities in 2014 were a whopping $499 billion dollars, the group found. That amount is surging rapidly; in 2012, the total was just $394 billion, meaning that pension debt is growing by over $50 billion a year.
Get the idea. In ten years, without a drastic change, you’re down $1 trillion on teachers’ pensions. The problem isn’t necessarily spread evenly either.
Some states are in a particularly huge hole. Illinois, for instance, has unfunded liabilities of $55 billion — a debt of over $27,000 for every student currently in its school system. In Alaska, per-student debt is over $25,000. Nationwide, the average burden is about $10,400 per student…
…state governments are sinking towards an abyss. Out of every dollar spent on pensions, 70 cents are paying off pension debt for current retirees rather than preparing for the retirement of current teachers. Eventually, either pension plans are going to go broke or the states themselves will.
This should concern teachers as well as taxpayers. When those pension plans go belly up, retired teachers are going to see their pensions cut and teachers who are looking forward to retirement are going to be looking forward to learning how to say “Welcome to Walmart” with a big fake smile on their faces.
The problem here is teachers unions and their incestuous relationships with elected Democrats. In reality there’s only one state that’s made major moves to get their teachers pension plans under control and that’s Wisconsin, under Governor Scott Walker. Until a lot more states move in that direction, doomsday is on the way.
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