Pension proposal unfair to districts

A portion of Gov. Pat Quinn's solution to the state's pension problem calls for shifting a part or all of the cost of the Teachers' Retirement System from the state too local school districts, saying he honestly doesn't believe it will necessitate a tax increase. What? Either the governor is willfully attempting to mislead or he is ignorant of school financing.

He made two points: districts could use their reserve funds or they will have to budget for the increased cost. Neither suggestion is financially valid. School districts are essentially paid twice a year, when property taxes are collected, and the so-called reserve funds are to cover outlays between payments. If these fund balances fall below about one-fourth of the annual budget, there is a distinct possibility of being unable to meet financial obligations like the paychecks for employees, which constitute 80 percent of outlays. For example if Districts 15 and 211 assumed one-third of the state's payment to TRS, it would add $5.6 million and $8.4 million, respectively, to their budgets.

Bleeding down district cash balances doesn't solve the problem. When the governor opines that districts will just have to budget for payments to TRS, he is really saying that they will have to cut programs, which would be teachers, or increase taxes. With a cap on levy increases set at CPI, how does he expect districts to fund these increased cost? If personnel costs increase at or even slightly below CPI, there is just no room for districts to fund TRS contributions short of reducing staff.

Does expect us to act like the federal government and crank up the printing presses to meet the shortfall? Come on, Gov. Quinn, crank up your honesty quotient.

Joe H. Heater

Palatine