Teacher layoffs help create state budget surplus for state

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School payrolls statewide have decreased enough that the total payroll projections by the Pennsylvania School Employees Retirement System were about $1 billion too high in 2011-12.

That means there is about $69 million more than needed in the state Department of Education's budget for reimbursing the PSERS employer contribution rate to school districts, according to PSERS.

It is up to the governor and the Legislature to determine how to spend this money.

Jay Pagni, spokesman for the governor's budget office, said the amount is not great enough to make a difference in the growing unfunded liability in both the school pension system as well as the State Employees Retirement System.

"It does not change the trajectory," he said.

"Even if we were to use that to pay in the upcoming budget year, the problem would still exist next year and for several years coming," he said.

As to whether the $69 million would be used toward pension costs, he said that would be a discussion between the governor and the Legislature.

"These are general fund dollars. It would be used to either fund or offset any type of general fund issue," he said.

As the law stands now, he said pension obligations -- both for PSERS and SERS -- are to grow by $511 million from the current year to 2013-14 alone, he said, adding about 70 percent of that comes from PSERS.

The governor's budget proposes making changes in the pension program that Mr. Pagni said will save $175 million and can be used to pay for various programmatic increases.

Jay Himes, executive director of the Pennsylvania Association of School Business Officials, said, "The total scope of the pension issue is just so overwhelming because the numbers are so huge, but certainly on a one-year basis any savings are beneficial and I think it will provide some relief."

PSERS had estimated total payroll at $13.9 billion in 2011-12, but the actual total was $12.9 billion, which is about 7 percent below projections.

It also had projected payroll at $13.9 billion in 2012-13 but now expects it may be lower, providing a somewhat similar savings to 2011-12.

The decrease likely reflects the number of furloughs, unfilled positions and pay freezes or small pay increases, said Mr. Himes.

Given compensation and benefits account for about two-thirds of school district budgets, many districts have made personnel cuts to address budget problems, he said.

Mr. Himes quoted U.S. Department of Labor Statistics that said that in calendar year 2011, 10,538 elementary and secondary school jobs of all kinds declined in Pennsylvania, a 3.8 percent cut from the prior year.

While there aren't federal figures for more recent years, Mr. Himes said he expects additional jobs have been lost.

As to the future, he said, "Some districts will have to shed payroll in order to find some budget relief.

"I don't know the extent that will continue to happen. In some districts, it will absolutely continue to happen."

education - electionspa

Education writer Eleanor Chute: echute@post-gazette.com or 412-263-1955.


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