Proposed teachers’ pension cost shift
He’s at it again. Just a few days after Governor Malloy publicly stated that he wanted to stop the unfunded mandates being passed down to towns and cities, he announced what might be the largest unfunded mandate of them all. In his budget presentation, Gov. Malloy proposed to pass on to the towns and cities of Connecticut almost $408 million in cost for the Teachers’ Pension fund.
Because of Hartford’s inability to balance a budget, and facing another large billion dollar deficit, moving this large burden on to the towns and cities does nothing but shift state responsibility to others. K-12 education cost is the responsibility of the State according to the Connecticut Constitution.
Providing retirement benefits to our teachers is one of those costs. Municipalities do not have the ability to negotiate these benefits as they are provided by State Law. When we have no say in the benefits or how they are negotiated, why are we being asked to fund the Pension Fund at such a large cost? Imposing mandates without giving municipalities the ability to change the law is tantamount to taxation without representation.
Private industry converted almost universally from defined benefit pension plans to 401k defined contribution plans. The state lawmakers insist on providing a deferred benefit plan that is unsustainable. If this benefit cost is unsustainable for the state, what makes anyone think it is sustainable for municipalities who have even less ability to raise revenue.
The state legislature created an enormous teacher pension fund deficit by not funding it as recommended by the actuaries, kicking the can down the road and now the Governor wants to kick it to the municipalities. He is not suggesting reducing the teacher pension deficit. Instead, he proposes to use the $408 million saved by the state to reduce the state budget deficit thereby forcing Connecticut residents, already the highest taxpayers in the nation, to pay more.
Residents can expect that this unfunded state mandate will lead to reduced education budgets or higher taxes at the local level. How else can municipalities fund it? Why has the state created the teacher pension benefit while leaving all other teacher benefits to the local negotiation process? Simple! Because they fund it! If they now refuse to fund it, they should freeze the benefit as is and turn over this benefit to the local negotiation process for future teachers.
The Governor asks municipalities to “partner” with the state. Municipalities should only do so when they are an equal participant … not one where the rules are made by one “partner” and paid by the other. If the state will not consider a change of course despite its $1.4 billion deficit, these costs will continue to escalate and our teachers will not realize their expected benefits when they retire. This is just not fair to anyone.
Teachers have the right to expect that the state will keep its commitments and live by the laws they make. This fiscal dilemma is not fair to CT residents who rely on the state to provide a good education for their children. Our state lawmakers have for too long neglected their funding responsibility.