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Towanda School District passes resolution to address 'serious problem' of funding teachers' pensions
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Review Photo/JAMES LOEWENSTEIN School Board President Peggi Munkittrick, center, speaks at Monday's Towanda School Board meeting. At left is Superintendent Diane M. Place and at right is board Vice-President Tony Ventello.
BY JAMES LOEWENSTEIN
TOWANDA - The Towanda School Board passed a resolution Monday to address the "very serious problem" of a projected spike in the amount that school districts will have to contribute toward the state teachers' pension fund in 2012, which could result in an increase in the Towanda School District's property tax of more than 5 mils.
By passing the resolution, "we're saying 'Take note!', 'Help!', 'This is a very serious problem!'" Diane M. Place, superintendent of the Towanda School District, said at Monday's school board meeting.
"We really don't see anything happening to help school districts" address the problem, Place said.
The rate at which school districts contribute toward the teachers' retirement fund is set by the state.
During the 2009-10 fiscal year, the Towanda School district is required to contribute the equivalent of 4.78 percent of teachers' salaries toward the state pension fund for teachers. Fifty-four percent of the school district's contribution is reimbursed by the state.
Because of large investment losses in the retirement fund, a large increase in the school district's contribution to the retirement fund is expected in 2012, the resolution states.
In 2012, the school district will have to contribute the equivalent of as much as 28 percent of teachers' salaries toward the retirement fund, the resolution states.
Based on projections for the spike, "the Towanda School District will be unable to fund pension obligations in 2012-13," the resolution states.
In April, Towanda School District Business Manager Doreen Secor had said the school district might have to raise its property tax more than 5 mils to be able to meet the increased contribution rate for 2012.
The resolution calls on the state Legislature to take steps to address the rate spike by amending the Pennsylvania Public School Employees' Retirement Code by "limiting eligibility, funding levels, and/or the extent of benefits so that the (school districts') contribution rate will be substantively reduced," or else provide other sources of revenue for the pension fund.
The school board voted unanimously to pass the resolution, although board member David Rice said that improvements in the stock market will reduce the size of the spike.
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