During last night's prime-time press conference, President Obama was asked about shared sacrifices during these tough times. The president noted that these are indeed difficult times for many Americans. Unemployment in the United States is approaching 10 percent and many of us are looking at 401(k) values that have shrunk by half in the past year. But, one group that is certainly not being asked to sacrifice is the Buckeye State's public school teachers.
First, they've gotten language into the current state budget proposal that would make it illegal for a school district to lay off teachers for "financial reasons." As personnel costs, particularly teacher salaries, make up about 70 percent or more of district expenses, this provision basically removes the ability of a local board and superintendent to manage a district's finances. If a local levy fails or state funding to schools is reduced, this provision would protect teacher jobs above all else. So, in a city like Dayton where unemployment is 12.3 percent, the taxpayers would be on the hook for paying all teachers in the district whether they can afford them or not.
Second, under Ohio's constitution the taxpayers are on the hook for guaranteeing in full all retirement benefits for teachers and other public sector employees.???? According to the most recent State Teachers Retirement System of Ohio annual report (which covers July 2007 through June 2008-before the latest stock market tumble), the financial health of the system is worsening. As the economy has melted down, STRS's unfunded liability has topped $18 billion (up $3.7 billion from the previous year). As this liability has increased, so has its amortization period, up from 26.1 years in 2007 to 41.2 years in 2008 (despite state law requiring an amortization period of no more than 30 years).
Many individuals and families have seen the values of their 401(k)s plummet over the last year, and many of us have had to adjust our expectations accordingly. Teachers and other public sector employees in Ohio are immune to these worries because their retirement benefits are guaranteed by the state. No matter how bad the public pension investments tank, the only ones who will take any of the hit will be taxpayers.
So, in Ohio anyway, it pays to be a teacher in tough economic times. They have protections that the rest of us can only dream about.
