Friday, April 16, 2010

NJ Education Unions Predict Gloom and Doom From Budget Mess

New Jersey has no money, and yet the NJEA continues to claim that it's Gov. Christie's fault and that the budget situation is such that 30,000 teachers might retire next year.
The state teachers union warned of chaos in the classroom and “irreparable damage to every school system in the state” following news that the administration is working out the details of a plan to change the rules for those who receive medical benefits and pensions through the state.

School employees and retirees make up the largest group in the system, and Education Commissioner Bret Schundler said it was hoped the changes could coax enough retirements to avoid layoffs next year. Nearly every district in the state is grappling with staff cuts as steep reductions in state aid are planned under the Christie budget.

“It’s conceivable you could have more retirements than you need so districts could have to do more hiring,” said Schundler. He said salary and benefits for new hires cost 83 percent less than those for veteran teachers.

Under the tentative plan, outlined by Schundler, employees and retirees would pay more toward their medical benefits; an amount has not yet been settled upon, but it could be a percentage of any increases in premiums. Employees who retire before August 1 would still be eligible for free lifetime medical benefits.

The calculation of pension at retirement, now based on the salary during the last three years of employment, would be changed to include the last five years of service, Schundler said. The change could mean a reduction of several thousand dollars annually in pension payments for teachers at the top of the pay scale, said Passaic’s Robert Holster, one of the state’s longest serving schools chiefs.

Holster estimates that 25 percent of his staff could be “packing their bags” if the proposals are enacted. That number represents veteran teachers in range of retirement, whose salaries average $109,000. A large number of administrators would likely retire as well, he said.

That's complete and utter nonsense. There's no way that many teachers will retire, let alone the dire results that the union claims will occur as a result of belt-tightening that demands that school districts do more with the same amount of money as they had last year.

Why would so many teachers retire when they need the money from their current salaries to continue living in the state? It makes no sense at all. All those teachers aren't going to leave anytime soon in the kinds of numbers being claimed.

Moreover, if a large number of administrators leave, that isn't necessarily going to affect classroom performance. It means that more money can be devoted to classroom activities rather than bureaucracy that doesn't actually improve classroom performance and the education of students. So, if administrators want to make this a threat - by all means - just don't consider replacing all those positions.

The union is busy complaining that teachers would leave because they're being asked to do things that the private sector already does on a regular basis, including contribute to their own medical benefits and pension calculation adjustments are long overdue.

Defined benefit contributions - pensions - are a costly drain on the localities and state, and New Jersey is billions in the hole for failing to properly contribute to the funds. Shifting new employees into 401(k) systems with employer match is preferable and less costly to the state than the current system, which puts the state on the hook for billions of dollars. The pensions also base their final payment calculations on the last three years of service, and allows them to inflate their final pension figures. We've seen similar actions when police and firefighters take massive amounts of overtime to boost their final year of service to maximize their pension figures. Under the current rules, those are quite legal and legitimate, but the days where government and taxpayers can afford those benefits are long gone.

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