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AFSCME
Council 31
AFSCME
Retirees Chapter 31
Chicago
Federation of Labor
Illinois AFL-CIO
Illinois
Education Association
Illinois
Education Association Retirees
Illinois
Federation of Teachers
Illinois
Retired State
Employees Association
Illinois Retired
Teachers Association
Service
Employees International Union Local 73
State University
Annuitants Association
University Professionals of Illinois/AFT Local 4100 |
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Teacher Salaries Fall Below Inflation
For the first time
since 1982, teacher salaries are less than the average
earnings of government workers, making them among the
lowest paid public employees. The American Federation of
Teachers reports that on a national scale teacher salary
growth continues to lag behind inflation and precludes
many teachers from finding affordable housing and paying
off student loans.
According to the most recent
data the average teacher salary in Illinois for the
2004-05 school year was $56,494, up 2.9 percent from
the previous year. The average teacher salary
nationally was $47,602, a 2.2 percent increase from
the previous year. Both the local and national
numbers fall short of inflation for that year, which
was 3.4 percent. Between 2003 and 2005, the buying
power of the average teacher salary decreased by
almost $800.
The salary survey also
examines the impact of rising housing costs and
student loan debt on teachers in America's 50
largest cities. The study concludes that lagging
salaries of mid career teachers will prevent them
from owning homes in most large cities.
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State Employee Salaries Trail
Private Sector
According to the 2007 American
Federation of Teachers (AFT) Public Employees
Compensation Survey across the nation, salaries for
state employed professionals registered modest to
healthy increases from 2006 to 2007, however most
state employees still earn far less than their
private sector counterparts.
Nationally the median increase
in average salaries across the 45 jobs surveyed was
5.7 percent from 2006 to 2007, the highest increase
recorded in the last five years. This growth is
said to likely reflect the fact that state revenues
and spending rebounded significantly in the last two
fiscal years allowing states to make up for the deep
program cuts enacted during the last national
economic downturn.
For example, state general
fund spending grew by 8.7 percent in fiscal year
2006 and by 8.6 percent in fiscal year 2007,
according to the National Association of Sate Budget
Officers. In contrast, state pending increased by
only 1.3 percent, 0.6 percent and 3 percent in
fiscal years 2002, 2003 and 2004 respectively, far
below the 29 year historical average of 6.5
percent. It was during these earlier years that
many states were forced to slash programs, cut
personnel and enact salary freezes.
Nonetheless, despite this
years higher than average salary growth, the
salaries of most state employed professionals still
trail those of their private sector peers. The AFT
study shows that private sector salaries exceed
state employee salaries in 17 of the 20 cases in
which job comparisons were made. Across all 20
occupations, private sector salaries are, on
average, about 30 percent higher than those of state
employees.
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Moody's
Lowers Evanston's Credit Rating
This month Moody's downgraded
Evanston, Illinois' credit rating from Aaa to Aa1.
The rating drop was based largely on the huge
unfunded liability in the police and fire pension
funds.
The city of Evanston has had a
Aaa bond rating since 1974. The city benefited from
the higher rating by paying lower interest rates on
bonds for long term capital improvement projects,
saving Evanston hundreds of thousands of dollars.
The credit rating downgrade
came as city officials are considering issuing bonds
to address an estimated $140 million in unfunded
liabilities in police and fire pension funds.
According to the Evanston Review, the report states
that "Moody's believes the city's already above
average debt burden (2.9 percent direct, 4.8 percent
overall) will increase materially should the city
elect to issue pension funding bonds. The pension
fund bonds, if issued, are expected to range from
$52 million to $116 million which could increase
the city's direct debt burden up to 3.8 percent of
estimated full market value.
Despite the downgrade, the
report does go on to note that the city continues to
show a number of financial strengths, citing
Northwestern University, the city's desirable
location within the Chicago region's North Shore,
transportation access, and a healthy real estate
market that continues to appreciate despite current
national housing trends.
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SERS Enjoys Strong Investment
Returns
The assets of the State
Employee Retirement System (SERS) grew by
approximately $1.2 billion in FY 2007. This
impressive growth has been due, in large part, to
excellent investment returns.
By law, SERS investment
functions are managed by the Illinois State Board of
Investment (ISBI). In FY 2007 SERS portion of the
ISBI fund realized a total investment return of
approximately $1.5 billion or 16.79%. This notably
strong investment return allowed SERS funding ratio
to increase from 52.2% in June 30,2006 to 54.2% in
June 30, 2007.
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Retirement News From Across the
Country
Florida
Florida
Schools Struggle to Pay Teachers Amid Freeze
School districts,
counties and cities across Florida
sought to raise cash after being denied
access to their deposits in a $14
billion state run investment fund.
According to
The Bloomberg the Jefferson County
school district was forced to take out a
short term loan to cover payroll for the
220 teachers and other employees in the
system after $2.7 million it held in the
pool was frozen. At least five other
districts also obtained last minute
loans.
Florida's State
Board of Administration, manager of the
Local Government Investment Pool, halted
withdrawals yesterday at an emergency
meeting after $13 billion was pulled out
this month from participants.
Governments from Orange county, home of
Disney World, to Pompano Beach asked for
their money back following disclosures
that the fund held $1.5 billion of
downgraded and defaulted debt.
An advisory panel
of school and local government officials
with money in the frozen investment pool
has told the fund's management that they
will not accept a return of less than
100 percent of their investment.
New Jersey
Task force
recommends that employees pay more for health
care
Stating that the cost
of health benefits for New Jersey's
government workers are outpacing those in
other states, a task force appointed by Gov.
Jon S. Corzine has issued recommendations
that could place more cost for health care
on public employees.
According to
The Daily Journal the proposals include
shifting more costs to government workers as
well as financial incentives that would
force employees to pay more if they choose
the most expensive coverage. The report
also calls for local school boards to manage
the cost of retiree heath care, potentially
pushing future costs onto local boards
funded by property tax payers.
Health costs
are threatening Ohio's pension systems
In 2006, the pension
system for Ohio teachers covered an average
of more than $4,200 in health care costs per
retired teacher, an increase of more than 20
percent from 1998 levels. Nonteaching
school employees drew an average of more
than $3,700 in health care costs from their
pension system last year, also a steady
climb from 1998 levels and a trend expected
to continue.
According to
The Columbus Dispatch leaders of the
State Teachers Retirement Systems and School
Employees Retirement System feel the these
trends will only bankrupt the system unless
something is done. These pension leaders
are baking legislation that would increase
contributions by both teachers and school
districts by 2.5 percent, phased in over
five years. for the first time teachers
would pay into the health care fund.
The Ohio School Boards
Association opposes the proposal, saying it
would saddle the state's school districts
with $250 million a year in contributions to
the pension system on top of the $1.2
billion they already pay.
Texas
Estimates of retiree health costs start
(at $19 billion) to roll in
The Teacher
Retirement System, one of the
nation's largest pension funds, said
this week it faces a $19 billion
unfunded liability in providing
health care and life insurance
benefits to current and future
retirees.
Texas, like most
states, handles retiree benefits on a pay as
you go basis. If it were to set aside money
for these benefits, an approach being
considered by several states, the unfunded
liability would decrease. However, Texas
budget writers have said prefunding these
benefits is very unlikely because of the
expense.
According to
The Austin American Statesman for
advanced funding to be impactful the
combined contribution rate - from the state,
employee and local employer - would need to
increase from the current 2.2% to 4.89% of
payroll
The fiscal year 2008
contribution rate based on the current 2.2%
- is projected to be $574 million. If the
contribution rate were moved up to 4.89%,
that total would be $1.3 billion.
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Do you have something to share in the IRSI
Newsletter?
Please email Jourlande Gabriel
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