School officials skeptical of pension reform plan

Northwest suburban school officials greeted Rep. David Harris’ outline for attacking the state’s pension problems with skepticism Saturday, but said they know they must be part of a solution.

The Arlington Heights Republican hosted board members and administrators from the school districts in both his current House District 66, and District 53, the redrawn one he represents after Jan. 9.

Harris is one of only two Republican co-sponsors of a bill whose features include shifting some funding of teachers’ pensions from the state to the school districts. Democrats Elaine Nekritz of Northbrook and Daniel Biss of Evanston are lead authors.

“There’s a lot of feeling among Republicans that this has merit,” Harris said. “We need action and cannot continue on the path we are on right now. This can be a platform for whatever occurs.”

However, Harris is not willing to predict whether the House will vote on the bill during the Jan. 6-8 lame-duck session.

Actuaries say it would cost school districts only about half of one percent of their salary budgets if the pension responsibilities were shifted to them, Harris said. Both Harris and school officials expressed surprise that this figure is so low, and the representative reported downstate legislators say, “We don’t believe you.”

Daniel Schuler, assistant superintendent in Wheeling Elementary District 21, said that figure applies only to people hired before Jan. 1, 2011, and the cost to districts would be a higher percentage for those hired later. He also asked whether the low cost for school districts means the bill requires contributions that are too steep from employees.

Harris said the rules for the group of teachers hired after January 2011 are unfair and need to be changed. These include the requirement raising retirement age to 67.

The 3 percent annual compounded increase in pension payments is causing much of the problem with the pension obligation, Harris said. Among other things, the bill limits any cost of living adjustments to only the first $25,000 of an employees’ pension.

Harris made it clear districts would not be responsible for the unfunded debt already in the Teachers’ Retirement System.

Joseph Leane, a member of the Mount Prospect Elementary District 57 board, said any increased pension costs would hurt that financially struggling district.

School officials also expressed concern that the legislature will continue to push more and more costs toward them. They asked whether districts might be allowed to increase property taxes to pay for pensions. Harris said that was unlikely unless the cost became more onerous.

Representatives of the following districts attended the meeting: Palatine Township Elementary District 15; Wheeling Elementary District 21; Prospect Heights Elementary District 23; Arlington Heights Elementary District 25; River Trails Elementary District 26; Mount Prospect Elementary District 57; Elk Grove Township elementary District 59; Des Plaines Elementary District 62; and Northwest Suburban High School District 214.