By Bill Zettler
You often hear from teachers and the media how the Illinois State Pensions are under funded because of missed payments by the taxpayers (via the politicians). However the real problem is the unconscionable salaries and raises being paid to teachers and school administrators. These kinds of salaries, raises and pensions are not available in the private sector and should not be available to public employees.
Every year when I send out my Freedom of Information Act requests to the various state agencies requesting salary and pension information for public employees I am hopeful the most egregious examples of taxpayer fleecing will be a thing of the past. Alas, year after year I am disappointed and 2007 proved to be no different.
It's not as if people do not know of the problem. Five years ago I wrote my first letter to the Daily Herald about the problem with teachers' pensions. The editor at the time, Dave Beery, called me and said they would like to publish the letter but they thought it had a typo. Certainly I meant the pension deficit was $23 MILLION not $23 BILLION. When I assured him it was no typo he asked for documentation to substantiate my claim. I referred him to the page and paragraph of the 2002 Teachers Retirement System Comprehensive Financial Statement that detailed the $23 billion. They subsequently published my letter intact.
Well as they say we've come a long way baby. On May 28th 2008 the Herald wrote an editorial espousing what we have been saying for years: the pension system as constituted is unsupportable and all public employees should be on Social Security and 401K plans. From utter disbelief to support for comprehensive reform is real progress.
But it will be slow going. The teachers unions have almost unlimited cash to fight against the needed changes and have many powerful friends in high places. Note Blagojevich's largest contributions from teachers: $300,000, $300,000, $250,000, $225,000, $200,000, $100,000 and $100,000. A total of $1.475 million with just 7 checks. And there's another $30 million plus given to Illinois politicians over the years by the teachers union. A cynic might say the teachers union gives millions in campaign donations and gets $100's of billions back in pension benefits. Hard to beat that return-on-investment.
Well, enough reminiscing about the good old days lets move on to the current House of Horrors. In our first spreadsheet “Top 100 School Administrators Salaries and Pensions” you can see that those salaries range from $214,000 to a mind-boggling $385,000. From those salaries and the years worked we can estimate the pension benefits which are customarily taken after 34 or 35 years service. As you can see by perusing the far right column, most of these people will be receiving in excess of $10 million in pension payments over their expected lifetimes.
In fact these 100 public employees are owed more than $1 billion in total retirement benefits, $888 million in pension and at least another $116 million in state-funded health insurance. So we have 100 school employees taking in $1 billion in retirement benefits and there are 164,000 more public school employees that have not retired yet. That gives you an idea of the magnitude of the problem.
You will also notice a great number of $200,000 plus pensions starting at age 56 or so growing to $500,000 plus at age 85. And keep in mind teachers pay less into their pension plan than you do into your Social Security and 401K. So how do these numbers compare to your retirement income?
Moving on to our next spreadsheet with the catchy title “Administrator Raises Greater Than the Median Full-Time Illinois Taxpayer Salary Of $32,864,” we can see unheard of salary increases of over $100,000. I don't even know what to say except how can these possibly be justified? According to state records the job titles remained the same only the salaries went up by $100K. What happened to the law passed in 2005 that stated no school employee could receive more than a 6% raise in the last 3 years of his employment?
The 40 employees on this spreadsheet averaged 25% increases and every one received a raise greater than the entire year's salary for one-half of Illinois full time workers. Perhaps one of the school board members who approved these $100,000 increases (Winnetka Dist 36 and Wheeling Dist 21) can write to the championews.net and tell us the logic behind these decisions.
It is bad enough that the local school district taxpayers have to pick up the tab for the $100,000 but it is taxation without representation to require the rest of the state's taxpayers to pick up the $3.9 million increase in pension payments for that one employee. I didn't get to vote for their school board so how can they tax me for the cost of the pension via the Teachers Retirement System?
When you hear the suburban schools talk about the lack of funding by the state, ask them what the state pays for the excessive pensions generated by out-of-scale salaries and raises. The number is higher for state pension payouts than it is for school funding by student. In other words, out-of-district taxpayers are paying more for the rich schools pensions than the than the rich schools are losing in General State Aid. So please, stop whining. It's unbecoming of millionaires.
Everyone in Springfield talks about more money for “education” but instead of raising taxes on hard-pressed citizens why not set a $2 million limit on pension payouts to public employees. We can see by the spreadsheet that would save $700 million just for 100 public employees. Think how much it would save if applied to every public employee. We might even be able to cut taxes rather than increase them. And who could argue that $2 million is not enough?
Democrats are supposed to be the party of the poor and the working class but I don't understand how $10 million dollar pensions help the poor or the working class since 27% of state revenue, funds used to pay the $10 million pensions, comes from the unavoidable sales tax, fuel tax and utility tax that every single Illinois citizen pays. Thus a single Mom with 2 kids, who goes to Jewel to buy a gallon of milk, pays sales tax on the milk, pays fuel tax on the gasoline used to go to and from the store and pays utility taxes on the electricity used to run her refrigerator. This is an example of political larceny at its worst.
And finally there is the $196,000/yr Art teacher who taught watercolors and origami for $21,000 per month. I saw those same classes offered at the local YMCA for $25 a student. Let's send our art students to the “Y” and save $200,000. More on teacher's salaries and pensions in a future article. Stay tuned for more bad news.
Bill Zettler is a free-lance writer and consultant specializing in public sector compensation. He can be contacted at this email address. Click here to read more by Mr. Zettler.
