What If We Just Refused To Pay PSERS?

January 23, 2012

The January 15 headline in the Intel read "Pension costs a big worry for Pa. public schools". The Associated Press story that followed explained that "A spike in pension obligations could hardly come at a worse time for Pennsylvania's public schools....The Corbett administration is projecting that its school employee pension obligations (PSERS ) will rise by $320 million next year - or more than 50 percent - after more than doubling in this fiscal year.... Meanwhile, public schools are suffering through cuts of more than 10 percent to state aid."

And "Rising pension obligations are being driven, in part, by lackluster investment performance on the money being paid into the system and a 2001 law under then-Gov. Tom Ridge that guaranteed 50 percent pension increases for most legislators and 25 percent increases for more than 300,000 state workers and teachers."

The story concluded "Because of the Legislature's efforts to blunt the spike, some districts may have a little surplus cash to help absorb more losses in state aid next year. 'The good thing is they have that cash to weather this storm a little bit,' said Jim Buckheit, the executive director of the Pennsylvania Association of School Administrators. 'At least, many have it'."

QCSD has it - about $1 million of your tax money, collected and saved over the past few years, to soften the blow somewhat when the hammer finally drops. But even that substantial amount may soon seem like a drop in the bucket. The school employees' retirement system estimates that the cost to the state and school districts will triple in four years, and then stay at that level until 2035.

The sad fact is that our taxes are literally going to skyrocket, long into the future. We are living on short-term fixes which will some day run out. And no one in authority at any level is doing anything about it. Why? Because it's their pensions, of course!!!

QCSD board member Paul Stepanoff has a solution. It will likely be dismissed as radical and unworkable. Civil Disobedience often is. But he suggests that overburdened taxpayers might be heard if school boards across the state stood up for them:

"The legislature is forcing the school boards to do their dirty work. We should not be helping. If we make those outrageous PSERS payments less of a shock to the public, we are only enabling the legislators to get away with the self-serving laws they passed, and their current behavior of doing nothing about it.

"In fact, we should do just the opposite. Not only should QCSD not have saved up for PSERS, but we shouldn't even make the payments! I acknowledge this is against the law, and would not have any effect if we're the only district that refuses. But it is against the law for PA legislators not to pass a budget on time, yet they just did it for the first time in eight years. I did not see our previous governor being taken away in handcuffs. Likewise, on the federal level, Congress has not passed a budget since President Obama took office, even though it is constitutionally mandated. Nancy Pelosi and Harry Reid are still walking the streets.

"I don't expect any school administrators, or legislators, to help. They are all in a conflict of interest situation regarding PSERS, since it is their pensions. And, of course, the only recommendation that school superintendents are going to make to their boards is to pay PSERS. In fact, they just love to see those million-dollar, pre-pay nest-eggs. Make sure they are well funded, so school retirees will be guaranteed plenty of money!

"The system is absolutely corrupt. I stated in a school board meeting that I did not want to hear the recommendation of what to do with PSERS from anyone in a conflict situation. Superintendent Andrejko was 'outraged', and forced us into an executive session, where I was told that using the term 'conflict of interest' was an offensive thing to say to her.

"In response, I pointed out that Dr Andrejko's hurt feelings was not a legal subject for an executive session, and if they wanted to continue the conversation it would have to be in the public meeting. I then walked out of the executive session, and the majority of the board followed. Incidentally, no one said anything publicly."

Because no one who actually has the authority and power to solve the problem will do anything about it, Stepanoff suggests that the only solution is to create a crisis. There are several options:

"Raise taxes above the ACT 1 index and force a public referendum. What are the chances that our community would support higher taxes to pay PSERS? I suggest the public would vote this down resoundly, and that would force the legislators to do something.

"Or, we could just not pay it, based on QCSD's mission statement. Our gospel is to educate students, and prepare them for life after graduation, not to divert taxpayer money to support an insanely lucrative retirement for educators who no longer help our kids. Rather than cut any of the student programs, we should cut PSERS, which in no way helps our system.

"Of course, if just one of 500 districts doesn't pay PSERS, the state will simply deduct the money from our education subsidy, and no one will take notice. However, imagine if 100 or 200 school districts across PA did the same thing!! The press would go wild, and the situation would put the blame and pressure exactly where it belongs - the legislators in Harrisburg who created this whole mess in the first place.

"This is why I oppose putting money aside for PSERS. The legislators passed a law that they knew would force school districts to raise taxes. Then they went even further and created a PSERS exception in ACT 1, so school boards could bypass a public referendum. And no one in the general public understood the ramifications until it was too late. The whole system is corrupt, isn't it?"

The bigwigs in Harrisburg are crowing about having reduced Act 1 exceptions from 10 to four. But with the huge cost of PSERS lasting far into the future, it won't matter. Eventually, all districts will rely solely on that exception. So until taxpayers become outraged, how will anything change? Until we are mad as hell, and not going to take it any more, there is no incentive for any of our school administrators to speak up, or legislators to act.

Until then, the only course of action is civil disobedience at the district level.

If it worked for Gandhi, worked for King, worked for Mandela, worked for Sophocles, Thoreau, and Shelley, worked in Egypt, Hungary, Czechoslovokia, East Germany, Georgia, Ukraine, the Arab Spring, Vietnam War protesters, and our own Boston Tea Party, maybe it will work in PA.

And it has to start somewhere. QCSD budget discussions begin in February....