Changes to help schools contain costs; union leader says teachers are being unfairly penalized
Published Nov. 22, 2011
By James A. Johnson/Daily News staff
The state pension reform package adopted last week will have a dramatic impact on the Portsmouth school budget for the fiscal year beginning in July, according to Mark V. Dunham, finance director for the School Department.
The department had anticipated a rise of about $1.29 million in the cost of the pensions for the coming fiscal year, he said. That would have presented serious budget problems for the department, since the amount is greater than the increase the schools would receive under a state-mandated cap on increases in the property-tax levy.
"If the (town) council was generous and gave us the entire cap, we would still have to cut just to make ends meet," Dunham said.
The reform package, however, will reduce that increase to about $200,000, he said. He called that a "$1 million cost avoidance."
"That is really important and will allow us to maintain programs that we have for the students," he said.
In Portsmouth, only the teachers are affected by the pension reform package approved by the General Assembly on Thursday and signed into law by Gov. Lincoln D. Chafee on Friday. The teachers are the only group of town employees covered by the state pension system. The other groups are in the town's pension system.
While the measure is being hailed by school officials in town, the head of the local teachers union sees it differently.
"To the last person, we don't like what has happened," said Joseph Cassady, president of the National Education Association-Portsmouth, which represents the more than 200 teachers in town.
"I understand the budget issues that are involved here, but to be honest with you, we didn't necessarily cause that," Cassady said. "We paid into our pensions; we've done what we were supposed to do. This is not just a change; it's such a drastic and devastating change from our way of looking at it."
The system got into trouble because people running the pension system were not putting money aside because they needed the money elsewhere, he said. Now the money isn't there and instead of being faithful to the promises, they are changing the rules, Cassady said.
"The best solution they could come up with is to really cut back on everything we had signed on for," Cassady said.
A fairer approach would have been to apply the new rules to new hires, not those who have been paying into the system for years, he said.
The limits on cost-of-living adjustments will be a burden on some retirees, he said.
"If you retire with a $30,000-a-year pension, knowing that in 20 years it is still going to be $30,000, you have to wonder if that is going to be enough," Cassady said.
He said he is sure the action will be challenged in court, but he did not know when that will happen.
"Part of me believes the General Assembly has the right to make these type of decisions," he said. "I think what was done is wrong, but that's the democratic process. It will be interesting to see what the long-term repercussions are for a lot of these politicians."
While some people are talking about the influence of state unions, Cassady said unions have lost a lot of their power since the 1940s and '50s.
"For the most part, my union is a white-collar union and the people in it don't like to get into the trenches," he said. "The group I lead is pretty passive. What they care about more than anything else is being able to teach and be compensated fairly."
Extending the age of retirement to 67 will mean towns will have to pay those teachers on the top step that much longer, he said. Many teachers are fairly burnt-out by the time they reach 59, the previous age for retirement, he said. Keeping them in the classroom until they turn 67 will not benefit the teachers, the town or the students, he said.
Financial institutions in the private sector were pushing for the hybrid type of coverage in these kinds of reforms and now pension funds will go into the private sector, where those institutions will make millions, he said.
"To be honest with you, we went from having a pretty good, maybe one of the best pension plans in the country," Cassady said. "At this point, it is one of the worst."

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