|
Post by macrockett on Jun 22, 2010 19:03:57 GMT -6
Rutgers officials say employee salaries will not increase as unions protest Published: Tuesday, June 22, 2010, 6:30 PM Updated: Tuesday, June 22, 2010, 6:32 PM Kelly Heyboer/ The Star-Ledger Kelly Heyboer/ The Star-Ledger rutgers-campus.JPGMatt Rainey/The Star-LedgerA 2009 Star-Ledger file photo of Rutgers University's Newark campus.
NEW BRUNSWICK — Even if last-minute budget negotiations in Trenton lead to additional higher education funding, Rutgers University’s employees are not going to get their salary increases, campus officials said today as labor unions staged a noisy protest outside the school’s board of governors meeting.
Several hundred Rutgers professors, administrative staff and maintenance workers rallied on the New Brunswick campus to protest the university’s recent announcement that all scheduled raises will be canceled. The salary freeze, announced earlier this month, will help the university deal with a proposed 15 percent cut in state funding.
Union members said Rutgers is reneging on promises made last year when employees agreed to defer their raises to this year. University employees used their lunch hours to protest outside the Rutgers Board of Governors meeting, holding signs reading "A contract is a contract" and "RU broke? ... I am."
"We are calling on the Board of Governors to overturn this short-sighted decision and show a little respect for the people who do the work of the university," said Lucye Millerand, president of the Union of Rutgers Administrators-American Federation of Teachers, which represents nearly 2,000 campus employees.
Inside the meeting, Rutgers officials said the financial situation is dire as the university looks for ways to fill a $96.6 million budget hole.
"This university is going to face perhaps the most difficult budget year it ever has," Rutgers President Richard McCormick said.
McCormick said university officials are continuing to lobby in Trenton for last-minute funding. But any additional money is unlikely to be enough to cover raises for Rutgers’ 13,000 employees, said Philip Furmanski, Rutgers’ executive vice president for academic affairs.
"Practically, there isn’t going to be enough relief," Furmanski said.
The Board of Governors will vote on the university budget and a tuition increase next month.
At today’s meeting, the board unanimously elected Ralph Izzo, head of PSE&G’s parent company, as its new chairman. Izzo takes over for the Rev. M. William Howard Jr., who stepped down after three years as chairman but will remain on the board. Gerald Harvey, a Roseland attorney, was elected vice chairman.
The meeting was complicated by confusion over whether the Board of Governors violated the state Open Public Meeting Act when a campus police officer blocked the doors of Winants Hall at the start of the noon public session, keeping out union protesters and members of the public. Inside, the board convened and quickly voted to go into a previously-scheduled closed session behind closed doors.
Union members, who were eventually admitted into the building, protested. They wanted to fill the meeting room to capacity at the start of the public session to voice their displeasure about the salary freeze before the board went into its closed session.
Rutgers officials eventually admitted they made a mistake and the board returned to the meeting room about 45 minutes later to start the meeting over. But by then most of the union members had left. Leslie Fehrenbach, secretary of the university, said it was unclear if the board had violated open public meetings laws.
"We always take great pains to do it right. It’s upsetting to me that it happened," Fehrenbach said.
© 2010 NJ.com. All rights reserved.
|
|
|
Post by macrockett on Jun 23, 2010 22:36:58 GMT -6
Pay attention to this. You will increasingly see this in the United States. In fact you already have, to some extent. In the halls of the NJ and CA legislatures, on the private lawn of a Bank of America lawyer in MD, and on and on.
Unions can't seem to understand that there are limitations to what they can take. In the private sector unions, their companies go bankrupt, like in the auto and steel industries.
In the public sector, it's a different story though. Public unions have a monopoly and can hold everyone hostage to their demands, like the Greek public union port workers are doing in this article.
As the private sector continues to get squeezed, leaving less and less for state spending, it will happen here too.
JUNE 23, 2010, 5:15 A.M. ET
Greek Strikers Disrupt Ferries
ATHENS—Striking port workers were preventing hundreds of passengers from boarding ferries heading from Greece's main port of Piraeus to Aegean holiday islands Wednesday, despite a court order declaring their strike illegal.
Tempers frayed at the port, with passengers arguing and occasionally scuffling with strikers preventing them from accessing the ships.
Passengers had turned up at Piraeus early in the morning after ferry firms had said they planned to go ahead with scheduled routes following a court ruling late Tuesday declaring the strike illegal.
At least five boats had been scheduled to sail for the Cycladic islands, one of the country's top tourist destinations, early Wednesday, while others had been set to leave for the southern island of Crete later in the day.
One striking union member, Savvas Tsiboglou, told Antenna radio that workers would continue their action, and that the passengers who were seeing their travel plans disrupted "are the victims of the government."
Only two of 14 unions represented in the main port workers' umbrella union had said they wanted to participate in Wednesday's 24-hour strike, called by PAME, a communist party-backed labor group. The union is protesting government austerity measures designed to pull Greece out of a financial crisis that saw it come to the brink of default last month.
The scenes at Piraeus come as Greece's main tourist season gets into full swing and will horrify those who work in the vital tourist industry, which has already seen a drop in bookings due to the financial crisis. Industry experts say bookings are down by an average of between 10% and 12% this season, following deadly riots that left three people dead last month in Athens when a protest against painful austerity measures turned violent.
The unions striking in Piraeus "do not understand that our economy is in a dire condition, as is the coastal shipping family," an association representing ferry companies said late Tuesday. The strike "directly hurts Greece's only heavy industry, tourism and shipping."
With tourism accounting for more than 15% of Greece's gross domestic product and one in five jobs, the government has launched a campaign to attract more foreign visitors.
In an attempt to assuage the fears of prospective visitors that the repeated strikes and demonstrations Greece has seen would disrupt their holidays, a top minister pledged the state would cover the extra costs of any visitors who become stranded.
Culture and Tourism Minister Pavlos Geroulanos said Monday that the promise would apply to tourists whose visits are prolonged due to strikes or even natural disasters.
"We are guaranteeing to pay any extra room and board any visitor in Greece pays even if stuck here because of a volcano in Iceland," he said.
Greece's budget and debt crisis saw it narrowly avoid bankruptcy last month by using the first installment of a €110 billion ($135.03 billion) package of rescue loans from the European Union and International Monetary Fund. To secure the rescue loans, the center-left government slashed pensions and civil sector pay, and increased consumer taxes. —Copyright 2010 Associated Press
|
|
|
Post by macrockett on Jun 27, 2010 13:15:17 GMT -6
I missed this story on Charter Schools earlier in the month. Nonetheless, I find it pretty disturbing.
JUNE 5, 2010 Wall Street Journal
Storming the School Barricades A new documentary by a 27-year-old filmmaker could change the national debate about public education. By BARI WEISS
New York
'What's funny," says Madeleine Sackler, "is that I'm not really a political person." Yet the petite 27-year-old is the force behind "The Lottery"—an explosive new documentary about the battle over the future of public education opening nationwide this Tuesday.
In the spring of 2008, Ms. Sackler, then a freelance film editor, caught a segment on the local news about New York's biggest lottery. It wasn't the Powerball. It was a chance for 475 lucky kids to get into one of the city's best charter schools (publicly funded schools that aren't subject to union rules).
"I was blown away by the number of parents that were there," Ms. Sackler tells me over coffee on Manhattan's Upper West Side, recalling the thousands of people packed into the Harlem Armory that day for the drawing. "I wanted to know why so many parents were entering their kids into the lottery and what it would mean for them." And so Ms. Sackler did what any aspiring filmmaker would do: She grabbed her camera.
Her initial aim was simple. "Going into the film I was excited just to tell a story," she says. "A vérité film, a really beautiful, independent story about four families that you wouldn't know otherwise" in the months leading up to the lottery for the Harlem Success Academy.
But on the way to making the film she imagined, she "stumbled on this political mayhem—really like a turf war about the future of public education." Or more accurately, she happened upon a raucous protest outside of a failing public school in which Harlem Success, already filled to capacity, had requested space.
View Full Image winterweiss Zina Saunders winterweiss winterweiss
"We drove by that protest," Ms. Sackler recalls. "We were on our way to another interview and we jumped out of the van and started filming." There she discovered that the majority of those protesting the proliferation of charter schools were not even from the neighborhood. They'd come from the Bronx and Queens.
"They all said 'We're not allowed to talk to you. We're just here to support the parents.'" But there were only two parents there, says Ms. Sackler, and both were members of Acorn. And so, "after not a lot of digging," she discovered that the United Federation of Teachers (UFT) had paid Acorn, the controversial community organizing group, "half a million dollars for the year." (It cost less to make the film.)
Finding out that the teachers union had hired a rent-a-mob to protest on its behalf was "the turn for us in the process." That story—of self-interested adults trying to deny poor parents choice for their children—provided an answer to Ms. Sackler's fundamental question: "If there are these high-performing schools that are closing the achievement gap, why aren't there more of them?"
The reason is what Eva Moskowitz, founder of the Harlem Success Academy network and a key character in the film, calls the "union-political-educational complex." That's a fancy term for the web of unions and politicians who defend the status quo in order to protect their jobs.
In the course of making "The Lottery," Ms. Sackler got to know the nature of that coalition intimately. "On day one, of course, I was very interested in all sides. I was in no way affiliated." From the beginning, she requested meetings with then UFT President Randi Weingarten, or anyone representing the union position. They refused. Harlem's public schools weren't much more accessible. "It was easier to film in a maximum security prison"—something Ms. Sackler did to interview a parent—"than it was to film in a traditional public school."
Viewers still get a sense of the union's position, but it comes from the mouths of some unsavory New York pols. Take, for example, a scene from the film featuring a City Council hearing on charter school expansion. "The UFT was exposed at this particular City Council hearing," she says, "because they were caught giving out scripted cue cards with specific questions for City Council members to ask charter representatives in the city." Unlike many of the politicians, who came and went from the chamber during the seven-hour hearing, Ms. Sackler remained. And she watched as the scripted questions were repeated and repeated and repeated.
"It was just a colossal waste of time," she says. "And it was incredibly frustrating as a citizen to be sitting there. Out of all the things they could be talking about—like the fact . . . that at the majority of schools in Harlem kids aren't passing the state exams—instead of talking about this stuff, they were cycling through those questions."'
Evasion is one tactic. So is propagating myths about Harlem Success—that it only succeeds because it has smaller class sizes; or that its children's test scores are so high because it gets more money. The truth is that the school gets superior results with the same or slightly bigger class sizes and less state money per pupil. In 2009, 95% of third-graders at Harlem Success passed the state's English Language Arts exam. Only 51% of third graders in P.S. 149, the traditional public school that shares the same building, did. That same year, Harlem Success was No. 1 in math out of 3,500 public schools in New York State.
The unions and the politicians also play on Harlemites' fears by alleging that charters divide the community and are a "tool for gentrification." This canard only holds up if you think uniforms and longer school days are a sign of cultural imperialism.
In a particularly cringe-inducing exchange captured on film, Councilwoman Maria Del Carmen Arroyo of the Bronx accuses Ms. Moskowitz of lying when the charter school leader talks about being a parent in Harlem (the neighborhood where she grew up, where she attended public school, and where she is raising her children, who attend the charter). The subtext, of course, is that Ms. Moskowitz is white and well-off.
This is par for the course, Ms. Sackler tells me. Harlem Success Academy is "protested more than any other charter school in this city—and there are some bad charter schools. So you would wonder why that would be."
Those wondering why need look no further than 2002, the year that Ms. Moskowitz, then a Democratic City Council member, became chair of the city's education committee. "She held a lot of hearings on the union contract—and the custodian contract, and the principal contract," says Ms. Sackler. New Yorkers learned that the teachers' contract is hundreds of pages long and littered with rules mandating every detail of how teachers will spend their workday.
The union was not pleased. So when Evil Moskowitz, as she was dubbed, ran for Manhattan borough president in 2005, the UFT campaigned hard for her opponent, Scott Stringer, who won.
Ms. Moskowitz, who confirmed in an interview that she has mayoral aspirations, was surely disappointed by the defeat. But her loss was Harlemites' gain. As one mother says of Ms. Moskowitz at a town hall meeting in Harlem, "She's our Obama. She brought change to our kids, okay?"
Some parents in the film do not know what exactly a charter school is. And the truth, as the film implicitly points out, is that such technical designations don't much matter. What these parents know is that they desperately want their children to have the best possible education, and to have opportunities that they themselves could only imagine. Winning a spot in Harlem Success Academy—or another high-performing school—is critical to reaching that goal.
"Going into it one of the goals was to expose one myth . . . which is that some parents don't care," says Ms. Sackler. "The reason for telling the parents' stories is that I never thought that was true."
In "The Lottery," we are introduced to Eric Roachford, who, like his father, works as a bus driver. As an MTA employee, Mr. Roachford is a "union man, but at the same time, we want our child to learn." He believes that going to college "is the difference between a job and a career." That's why his wife, Shawna, has taken time off to home school their two young sons.
Nadiyah Horne, a single mother who is also deaf, is raising 5-year-old Ammenah. "If others don't like this school, I don't care," she says, using sign language. "I want my child to get the best education." So does Emil Yoanson, who is raising his son Christian alone, and who prays to God that his name will be drawn.
"Being a single mom is very, very hard" says Laurie Brown-Goodwine, who has applied to several charters for her son, Gregory Jr. Her husband is serving 25 years to life in prison for a third-strike felony.
These are parents who don't have the means to move to a richer neighborhood with better public schools, so instead they have to rely on luck. When demand for a charter school exceeds supply, the random drawing is required by law. Some schools inform parents by mail, but Harlem Success holds a public lottery. "Harlem Success is very explicit about why they do it," Ms. Sackler says. They want to show demand. "I've heard them say to parents 'We hope that you'll come and show that this is something that you want. Because if you don't, we're not going to get more schools.'"
In the film, Newark, N.J., Mayor Cory Booker says he can't go to lotteries anymore because they break his heart. "A child's destiny should not be determined on the pull of a draw." Nothing drives home this point more than seeing the parents and kids, perched at the edge of their chairs, hoping their names flash on the big screen.
Critics of "The Lottery" will probably contend that the absence of anti-charter voices hurts its credibility. But the scene Thursday night at Harlem's legendary Apollo Theater, where the film was screened, underscored the film's fundamental point about parents' apolitical dedication to educating their kids. After the documentary played, the film's parents took to the stage to answer questions from the theater's packed audience. Their message: Research options early and ignore labels—all that matters is the school's results. It's the same message, the parents said, that they now regularly share in neighborhood grocery markets and libraries.
Harlem Success, meanwhile, is trying to keep pace with parents' demand. Right now the network has four schools, but in 10 years it hopes to operate 40, with some 20,000 kids enrolled. Even then, there would be more work ahead: This year, some 40,000 New York kids will end up on charter school waiting lists.
"The public education system is at a crossroads," Ms. Sackler says. "Do we want to go back to the time when children are forced to attend their district school no matter how underperforming it is? Or do we want to let parents choose what's best for their kids and provide a lot of options? Sometimes those options might fail. But . . . I don't see how you could choose to settle for what we've been doing for half a century when it's been systemically screwing over the same kids—over and over and over."
Ms. Weiss is an assistant editorial features editor at the Journal.
|
|
|
Post by macrockett on Jun 27, 2010 14:34:12 GMT -6
When the New York Times decides that a story on Public Pensions is merited, it must be serious.... www.nytimes.com/2010/06/27/magazine/27fob-wwln-t.html?ref=us&pagewanted=printJune 21, 2010 The Next Crisis: Public Pension Funds By ROGER LOWENSTEIN Ever since the Wall Street crash, there has been a bull market in Google hits for “public pensions” and “crisis.” Horror stories abound, like the one in Yonkers, where policemen in their 40s are retiring on $100,000 pensions (more than their top salaries), or in California, where payments to Calpers, the biggest state pension fund, have soared while financing for higher education has been cut. Then there is New York City, where annual pension contributions (up sixfold in a decade) would be enough to finance entire new police and fire departments. Chicken Little pension stories have always been a staple of the political right, but in California, David Crane, the special adviser to Gov. Arnold Schwarzenegger, says it is time for liberals to rally to the cause. “I have a special word for my fellow Democrats,” Crane told a public hearing. “One cannot both be a progressive and be opposed to pension reform.” The budgetary math is irrefutable: generous pensions end up draining money from schools, social services and other programs that progressives naturally applaud.
TO WHICH I HAVE TO RESPOND...."DUH" In California, which is in a $19 billion budget hole, Calpers is forcing hard-pressed localities to cough up an extra $700 million in contributions. New York State, more creatively, has suggested that municipalities simply borrow from the state pension fund the money they owe to that very fund.
Such transparent maneuvers will not conceal the obvious: for years, localities and states have been skimping on what they owe. Public pension funds are now massively short of the money to pay future claims — depending on how their liabilities are valued, the deficit ranges from $1 trillion to $3 trillion.
Pension funds subsist on three revenue streams: contributions from employees; contributions from the employer; and investment earnings. But public employers have often contributed less than the actuarially determined share, in effect borrowing against retirement plans to avoid having to cut budgets or raise taxes.
They also assumed, conveniently enough, that they could count on high annual returns, typically 8 percent, on their investments. In the past, many funds did earn that much, but not lately. Thanks to high assumed returns, governments projected that they could afford to both ratchet up benefits and minimize contributions. What a lovely political algorithm: payoffs to powerful, unionized constituents at minimal cost.
Except, of course, returns were not guaranteed. Optimistic benchmarks actually heightened the risk, because they forced fund managers to overreach. At the Massachusetts pension board, the target was 8.25 percent. “That was the starting point for all of our investment decisions,” Michael Travaglini, until recently its executive director, says. “There is no way a conservative strategy is going to meet that.”Travaglini put a third of the state’s money into hedge funds, private equity, real estate and timber. In 2008, assets fell 29 percent. New York State’s fund, which is run by the comptroller, Thomas DiNapoli, a former state assemblyman with no previous investment experience, lost $40 billion in 2008. Most funds rebounded when the market turned, but they remain deep in the hole. The Teachers’ Retirement System of Illinois lost 22 percent in the 2009 fiscal year. Alexandra Harris, a graduate journalism student at Northwestern University who investigated the pension fund, reported that it invested in credit-default swaps on A.I.G., the State of California, Germany, Brazil and “a ton” of subprime-mortgage securities. The financial crash provoked a few states to lower their assumed returns. This will better reflect reality, but it will not repair the present crisis. Before the crash, retirement systems were underfinanced (they did not have sufficient funds to pay promised benefits), but the day of reckoning was distant. Moreover, the pain was indirect. Taxpayers were not aware that pension debts caused teachers to be laid off — only that schools had fewer teachers. Postcrash, the horizon has condensed. According to Joshua Rauh of the Kellogg School of Management at Northwestern, assuming states make contributions at recent rates and assuming they do earn 8 percent, 20 state funds will run out of cash by 2025; Illinois, the first, will run dry in 2018. What might budgets look like then? Pension obligations are a form of off-balance-sheet debt. As funds approach exhaustion, states will be forced to borrow to replenish them. Some have already done so. Thus, pension obligations will be converted into explicit liabilities (think of a family’s obligation to pay for grandma’s retirement being added to its mortgage). According to Rauh, if the unfinanced portion of all public pension obligations were converted to debt, total state indebtedness would soar from $1 trillion to $4.3 trillion.Such an explosion of debt would threaten desperate governments with bankruptcy. Alternately, states could try to defray pension costs from their operating budgets. Illinois, once its funds were depleted, would be forced to devote a third of its budget to retirees; Ohio, fully half. This would impoverish every social (and other) program; it would invert the basic mission of government, which is, after all, to serve constituents’ needs.
[/color] States really have no choice but to further cut spending and raise taxes. They also need to cut pension benefits. About half have made modest trims, but only for future workers. Reforming pensions is painfully slow, because pensions of existing workers are legally protected. There is, of course, no argument for canceling a pension already earned. But public employees benefit from a unique notion that, once they have worked a single day, their pension arrangement going forward can never be altered. AS A NUMBER OF LAW FIRMS HAVE ALREADY OPINED, THIS SIMPLY IS NOT TRUE. No other Americans enjoy such protections. Private companies often negotiate (or force upon their workers) pension adjustments. But in the world of public employment, even discussion of cuts is taboo. Recently, states have begun to test the legal boundary. Minnesota and Colorado cut cost-of-living adjustments for existing workers’ pensions; each faces a lawsuit. But legislatures need to push the boundaries of reform. That will mean challenging the unions and their political might.
The market forced private employers like General Motors to restructure retirement plans or suffer bankruptcy. Government’s greater ability to borrow enables it to defer hard choices but, as Greece discovered, not even governments can borrow forever. The days when state officials may shield their workers while subjecting all other constituents to hardship are fast at an end. Roger Lowenstein, an outside director of the Sequoia Fund, is a contributing writer and author of “While America Aged,” among other books.
|
|
|
Post by macrockett on Jun 27, 2010 14:53:59 GMT -6
www.nytimes.com/2010/06/20/business/20pension.html?ref=budget_crisis_2008_09&pagewanted=printJune 19, 2010 In Budget Crisis, States Take Aim at Pension Costs By MARY WILLIAMS WALSH Many states are acknowledging this year that they have promised pensions they cannot afford and are cutting once-sacrosanct benefits, to appease taxpayers and attack budget deficits. Illinois raised its retirement age to 67, the highest of any state, and capped the salary on which public pensions are figured at $106,800 a year, indexed for inflation. Arizona, New York, Missouri and Mississippi will make people work more years to earn pensions. Virginia is requiring employees to pay into the state pension fund for the first time. New Jersey will not give anyone pension credit unless they work at least 32 hours a week. “We can’t afford to deny reality or delay action any longer,” said Gov. Pat Quinn of Illinois, adding that his state’s pension cuts, enacted in March, will save some $300 million in the first year alone. But there is a catch: Nearly all of the cuts so far apply only to workers not yet hired. Though heralded as breakthrough reforms by state officials, the cuts phase in so slowly they are unlikely to save the weakest funds and keep them from running out of money. Some new rules may even hasten the demise of the funds they were meant to protect. Lawmakers wanted to avoid legal battles or fights with unions, whose members can be influential voters. So they are allowing most public workers across the country to keep building up their pensions at the same rate as ever. The tens of thousands of workers now on Illinois’s payrolls, for instance, will still get to retire at 60 — and some will as young as 55. One striking exception is Colorado, which has imposed cuts on its current workers, not just future hires, and even on people who have already retired. The retirees have sued to block the reduction. Other states with shrinking funds and deep fiscal distress may be pushed in this direction and tempted to follow Colorado’s example in the coming years. Though most state officials believe they are legally bound to shield current workers from pension cuts, a Colorado victory could embolden them to be more aggressive. Colorado pruned a 3.5 percent annual pension increase to 2 percent, concluding that was the fastest way to revive its pension fund, which was projected to run out of money by 2029. The cut may sound small, but it produces big results because it goes into effect immediately. State plans vary widely, but many have other costly features, like subsidized early-retirement benefits, which could likewise be trimmed for existing workers. Despite its pension reform, Illinois is still in deep trouble. That vaunted $300 million in immediate savings? The state produced it by giving itself credit now for the much smaller checks it will send retirees many years in the future — people who must first be hired and then, for full benefits, work until age 67. By recognizing those far-off savings right away, Illinois is letting itself put less money into its pension fund now, starting with $300 million this year. That saves the state money, but it also weakens the pension fund, actually a family of funds, raising the risk of a collapse long before the real savings start to materialize. “We’re within a few years of having some of the pension funds run out of money,” said R. Eden Martin, president of the Commercial Club of Chicago, a business group that has been warning of a “financial implosion” for several years. “Funding for the schools is going to be cut radically. Funding for Medicaid. As these things all mount up, there’s going to be a lot of outrage.” Joshua D. Rauh, an associate professor of finance at Northwestern University who studies public pension funds, predicts that at the current rate, Illinois’s pension system could run out of money by 2018. He believes the funds of other troubled states — including New Jersey, Indiana and Connecticut — are also on track to run out of money in less than a decade, unless they make meaningful changes. If a state pension fund ran out of money, the state would be legally bound to make good on retirees’ benefits. But paying public pensions straight out of general revenue would be ruinous. In Illinois’s case, it would consume about half the state’s cash every year, bringing other vital state services to a standstill. Mr. Rauh said he thinks any state caught in that trap would have little choice but to seek a federal bailout. Bigger pension contributions and higher taxes can go only so far. Many state officials, hoping for a huge recovery in the markets, say that such projections are too pessimistic, and that cutting benefits for future workers must suffice, given laws and provisions in state constitutions that make membership in a state pension fund a contractual relationship that cannot be breached. Lawyers, though, are raising the possibility that those laws are being misinterpreted. “It makes no sense to suggest that an employee who works for the state for a single day has acquired a right to have future pension benefits calculated for the next 20 to 40 years under whatever method was in effect on that single first day of service,” states a legal memorandum prepared for the Commercial Club of Chicago, which is concerned that a public pension collapse would badly damage the city’s business climate. The club’s members include senior executives of big companies, like Boeing, Aon, Kraft, Motorola and I.B.M., that have frozen pensions or slowed the rates at which their workers build up benefits. Some of those cuts set off titanic battles. The most famous was at I.B.M., which changed its pension plan just when many of its older workers were about to earn sharply higher retirement benefits. Aggrieved workers sued, but after a long battle, a federal appellate court found that the cuts were legal. “An employer is free to move from one legal plan to another legal plan, provided that it does not diminish vested interests,” or the benefits workers have already earned, wrote Chief Judge Frank H. Easterbrook of the Seventh Circuit Court of Appeals in Chicago. He did not distinguish between corporate employers and states. Colorado is basing its legal defense, in part, on a 1961 state supreme court ruling that said pension cuts for current workers were allowed if “actuarially necessary,” and will argue that it applies to retirees as well. Other states may not have such legal tools. In California, Gov. Arnold Schwarzenegger has gone a different route, bargaining with the 12 unions that represent public employees. Last week four of them agreed to let the state cut its own contributions by requiring current workers to pay sharply more for the same pensions. The workers will contribute 10 percent of their pay, in some cases double the previous rate, to the state pension fund. Some other states are raising employee contributions as well, though less sharply. In New Jersey, the administration of Gov. Christopher J. Christie recently imposed pension cuts on future hires, but has been quietly looking into whether it could also reduce the benefits that current employees expect to accumulate in the coming years. “Can they change the benefit formula going forward? Sure. It’s not etched in stone,” said Edward Thomson III, an actuary and trustee of the New Jersey pension system who was asked to offer an opinion on whether New Jersey could adopt the federal pension law — the one that covers companies — as its governing statute. A state assemblyman, Declan J. O’Scanlon Jr., recently introduced a bill to ratchet back a 9 percent pension increase that the state gave most workers in 2001. “I think this will pass constitutional muster,” Mr. O’Scanlon said. “Otherwise, I fear the whole system will fall apart. Nine years — we’re out of money.” Amy Schoenfeld contributed reporting. This article has been revised to reflect the following correction: Correction: June 27, 2010 An article last Sunday about the ways in which states are trying to control the cost of their pension plans described a pension cap in Illinois incorrectly. The cap applies to the annual salary upon which pensions will be based (for employees hired after Jan. 1, 2011, the cap is $106,800, indexed for inflation). The pension itself will not be capped at that amount.
|
|
|
Post by macrockett on Jun 27, 2010 14:56:48 GMT -6
www.nytimes.com/2010/06/25/business/25accounting.html?ref=pensions_and_retirement_plans&pagewanted=printJune 24, 2010 A New Plan for Valuing Pensions By MARY WILLIAMS WALSH The board that writes accounting rules for states and cities has proposed a new approach for pension disclosures that falls far short of what some financial experts hoped, but which would still force many governments to highlight pension shortfalls they have played down. The current standard has come under heavy fire from mainstream economists, who say it makes virtually all government pension benefits look less costly than they really are. Government officials have granted pensions to teachers, police, judges and other public workers for years, without reflecting the true cost, analysts say. Now the bills are coming due, and in many cases there is not enough money set aside, adding to the fiscal distress across the country. Pensions are a third-rail issue for the Governmental Accounting Standards Board, and it has been working with great deliberation. Its pension project began early in 2006 but is nowhere near completion. Earlier this month, the board issued a “Preliminary Views” statement, summarizing its conclusions so far and requesting public feedback. A new standard is unlikely to take effect until at least 2013. Fiscal hawks have been urging the accounting board to require states to measure their pension obligations at fair value. Corporations already do this when they report their pension numbers to the Securities and Exchange Commission. But state and local officials have resisted, and the Governmental Accounting Standards Board seems to have taken their objections to heart. Its new proposal would let them keep measuring their pension obligations the same way as before, with one big exception. The rule makers want to shine a bright light on the states and local governments that routinely fail to put enough money into their pensions — places like Illinois, New Jersey and Pennsylvania — that year after year contribute less than their actuaries tell them they have to contribute to their pension funds. The accounting board wants those places to show the missing amounts on their balance sheets, not hide them in footnotes.
Further, instead of minimizing the shortfalls, those governments would have to calculate the shortfalls in a way that magnifies them.
“I think they hope this will be the disciplinary tool that will get everybody funding at the actuarial rate,” said Jeremy Gold, an actuary and economist who served on the accounting board’s pension advisory task force but who does not like the proposed new method. “They hope they will be punishing the real laggards.”
He said the board’s stated purpose was to foster correct financial reporting, not mete out punishment. Many states and cities will be relieved at least that more far-reaching types of changes have been sidelined. They had feared a shift to fair value accounting in general and especially now, after big investment losses in 2008. Some economists have been trying to strip down pension numbers to present something like fair value anyway. The most recent such study, by Eileen Norcross of the Mercatus Center at George Mason University and Andrew Biggs of the American Enterprise Institute, determined that if New Jersey’s state pension system disclosed its pension numbers at fair value, it would have a shortfall of $170 billion, instead of its reported $46 billion.
“This path is not sustainable,” Ms. Norcross said.
Governments and their actuaries argue that it is unfair and misleading to show them at their worst — or at any particular point in time. States and cities, after all, are fundamentally different from corporations — they do not do things like acquire each other or file for Chapter 11 bankruptcy protection. In addition, while companies need to bring their pension funds to a standing stop and measure them during such events, governments never engage in such transactions, so they say there is no reason to disclose their financial status at a single time. “I doubt anybody’s imagination is vivid enough to imagine the merger of states such as Kansas and Missouri, or Ohio and Michigan,” said Rick Roeder, an actuary and consultant in San Diego, in testimony submitted to the accounting board. “For a plan sponsor with a 50-plus-year time horizon, today’s market value can be anything but fair.” At the heart of the dispute is the way governments gauge the value of the pensions they owe future retirees in today’s dollars — a commonplace financial calculation known as discounting. It is used to calculate things as diverse as bond prices and mortgages.
Discounting is based on an interest rate, which is supposed to reflect the riskiness and other attributes of the underlying asset. Current accounting rules tell governments to use the investment return they expect over the long term. In practice, this means most public pension funds now use about 8 percent.
Many economists criticize this practice, arguing that 8 percent reflects a fairly high degree of risk, though state pensions are guaranteed by law and are therefore virtually risk free.
Standard economic theory says they should be measured with a very low discount rate — something much closer to the rate on Treasury bonds than to the higher risk securities in most pension investment portfolios. These days, many economists think the states should be using a rate of about 4.5 percent to measure their pension obligations.
The difference — three or four percentage points — translates into hundreds of billions of dollars when applied to pension obligations.The 50 states together reported pension obligations of $3.3 trillion as of mid-2008, and secured with assets of $2.3 trillion, according to the Pew Center on the States. But Ms. Norcross said that if the states had to report their pension obligations on a fair value basis, the number would have been $5.2 trillion.
|
|
|
Post by macrockett on Jun 27, 2010 15:07:52 GMT -6
www.nytimes.com/2010/06/03/nyregion/03mta.html?ref=pensions_and_retirement_plans&pagewanted=printJune 2, 2010 $239,000 Conductor Among M.T.A.’s 8,000 Six-Figure Workers By MICHAEL M. GRYNBAUM In an era of generous municipal salaries and union-friendly overtime rules, it may not come as a complete shock that there are thousands of Metropolitan Transportation Authority employees — 8,074, to be precise — who made $100,000 or more last year. The usual top-level managers are included in that list, but so are dozens of lower-level employees, including conductors, police officers and engineers, many of whom pulled in six figures in overtime and retirement benefits alone. One of those workers, a Long Island Rail Road conductor who retired in April, made $239,148, about $4,000 more than the authority’s chief financial officer, according to payroll data released on Wednesday. In fact, more than a quarter of the Long Island Rail Road’s 7,000 employees earned more than $100,000 last year, including the conductor, Thomas J. Redmond, and two locomotive engineers — who were among the top 25 earners in the entire transportation authority. The authority is readying service cuts to close a budget shortfall of $400 million, and its chairman, Jay H. Walder, has said he plans to reel in runaway overtime costs, which pile up to $560 million annually. But the authority, which employs about 70,000 workers over all, cannot significantly reduce its labor costs without concessions from its unions, which say their workers deserve their compensation for difficult and sometimes dangerous jobs. The payroll data, compiled from records obtained by the Empire Center for New York State Policy, a research group run by the Manhattan Institute, reflect total compensation. An exact breakdown was not available for most employees, but transit officials said that overtime and retirement payouts appeared to account for most of the high salaries. Two car repairmen at the L.I.R.R. and 12 police officers assigned to the authority’s bridges and tunnels, some of whom earned more than double their base salaries, were among the 50 employees at the authority who collected $200,000 or more, the data show. Mr. Redmond, the retired conductor, was the eighth-highest paid employee in the entire authority, ranking 16 spots higher than his railroad’s executive vice president. He earned $67,772 in base salary and $67,000 in overtime, and collected nearly $100,000 in unused sick days and vacation time upon retirement, railroad officials said. The second-highest paid employee at the agency’s bridge and tunnel division, after its president, was Walter Stock, a lieutenant who earned $226,383, more than twice his base pay of $90,000, according to the data. At No. 17 was Dominick J. Masiello, an L.I.R.R. locomotive engineer, who earned about $75,000 in base salary and overtime payments of $52,000. He also received $94,600 in “penalty payments,” which railroad officials said stemmed from a contractual rule that requires engineers who work in a storage yard to be paid extra if they are assigned to move a locomotive to a nearby maintenance facility or if they are asked to operate a train outside of the yard. Compensation varied widely within the authority’s various divisions. About 24 percent of Metro-North Railroad workers earned more than $100,000, along with 18 percent of bridge and tunnel workers, the data show. At the authority’s biggest sub-agency, New York City Transit, only 6 percent of workers earned six figures. The authority did not contest the figures, but officials said they were planning stricter management oversight and more aggressive vetting of overtime requests. About 3,000 workers will lose their jobs through layoffs, buyouts, or attrition this year. For midcareer employees, the authority “is pretty much establishing a six-figure norm,” said Edmund J. McMahon, the director of the Empire Center, which tracks pension costs. The union that represents most Long Island Rail Road workers did not return a call for comment. Helena E. Williams, the president of the L.I.R.R., was the authority’s highest-paid employee last year, earning $286,872. (Ms. Williams briefly served as chief executive of the transportation authority last year.) Mr. Walder, who began in October, now earns $350,000 a year as chairman, as well as a $3,500 monthly housing allowance. Over all, the authority workers’ average pay rose about 2.4 percent last year. Management salaries were frozen. Around 60 percent of the authority’s current budget — about $7 billion — is used to pay labor costs including payroll, pensions, and overtime. Robert Gebeloff contributed reporting. This article has been revised to reflect the following correction: Correction: June 7, 2010 An article on Thursday about high earnings among some employees of the Metropolitan Transportation Authority misstated in one place, the surname of a Long Island Rail Road conductor who made more than $200,000 last year. He is Thomas J. Redmond, not Raymond.
|
|
|
Post by macrockett on Jul 1, 2010 5:00:36 GMT -6
|
|
|
Post by asmodeus on Jul 1, 2010 11:04:01 GMT -6
Zell's point about collective bargaining is spot on. The people negotiating these deals on behalf of the taxpayers are actually beholden to or trying to gain favor (votes) with the groups they are negotiating against.
|
|
|
Post by macrockett on Jul 1, 2010 20:55:21 GMT -6
JULY 1, 2010 Wall Street Journal
Teacher Tenure Breakout The new D.C. contract could be a national reform model.
In the long war between teachers unions and education reformers, the reformers won a big victory this week that could serve as a model for school districts across the U.S. The breakthrough is a new contract between the District of Columbia and 4,000 public school teachers that shatters taboos on teacher tenure, seniority and pay-for-performance.
The contract, which was approved by the D.C. Council on Tuesday, is a triumph for hard-bargaining Schools Chancellor Michelle Rhee, who took on American Federation of Teachers (AFT) President Randi Weingarten and has lived to tell about it. "Seniority used to drive all kinds of decisions, including who was hired or laid off," said Ms. Rhee during a recent visit to the Journal. "Now that will be determined by performance and quality."
Among other things, the new contract abolishes lock-step pay and implements a voluntary performance-based system that could add $20,000 to $30,000 to the salaries of teachers whose students show above-average improvement in test scores. Tenure rules will no longer compel principals to hire rotten instructors.
Teacher performance will be judged by student achievement and evaluations by administrators and "master educators" appointed by Ms. Rhee's office who can make surprise classroom visits. Bad teachers can be terminated more easily, while teachers rated "minimally effective" will have their pay frozen and can be fired after two years if they don't improve.
These may seem like common sense reforms to anyone outside of public education, but they have been fiercely opposed by the AFT, the National Education Association and their local affiliates. In most states, teachers receive tenure after only two or three years in the classroom, and then it's nearly impossible to fire them. Students are the victims of this system meant to serve adults with lifetime sinecures.
How has Ms. Rhee pulled this off when so many others have failed? One reason is the political support of Democratic Mayor Adrian Fenty, who appointed her in 2007. Another is the awful state of the schools she inherited, where only 8% of eighth graders were performing at grade level in math when she took over, even though D.C. was spending $14,300 per student, or $6,300 more than the national average. Even Ms. Weingarten couldn't defend those results.
Ms. Rhee adds that she had more than the usual bargaining leverage thanks to some earlier reforms that let her decide how teachers are evaluated. The wholesale flight of D.C. children—some 38%—from traditional public schools to charter schools increased her negotiating power. Credit also goes to the Washington Post, which has supported Ms. Rhee even as most big city liberal newspapers have backed the status quo.
Ms. Rhee's challenge now is to use the new rules forcefully enough to drive improvements because the unions will assume they can wait her out. Meanwhile, Ms. Weingarten and the national unions are trying to downplay the D.C. contract lest other school chancellors take it up as their reform model. Their greatest fear is that they will have to defend against reformers determined to rewrite teacher tenure rules on multiple fronts.
Unfortunately, most school chancellors are careerists who don't want to upset the unions because they are always looking for their next job. One example: Clifford Janey, whom Ms. Rhee replaced in D.C., went on to become the superintendent in Newark, N.J., whose schools may be worse than D.C.'s. Ms. Rhee, by contrast, came to her job as an outsider willing to endure the considerable abuse that the unions and their political backers threw at her.
School reform can sometimes seem like a Sisyphean task, but D.C.'s breakout on teacher tenure shows that the status quo can be broken. Let's hope more big city mayors and chancellors have the courage of Ms. Rhee's and Mayor Fenty's convictions.
|
|
|
Post by macrockett on Jul 1, 2010 22:08:30 GMT -6
|
|
|
Post by macrockett on Jul 2, 2010 8:28:17 GMT -6
|
|
|
Post by macrockett on Jul 7, 2010 21:42:38 GMT -6
A new study was just released which analyzes federal government pay. Oh if we could all work for the government! But there's a small problem...where would the tax receipts come from to pay us? On second thought, maybe federal employees are worth every cent...they gave us Freddie, Fannie (social engineering at its best and also a slush fund for congress who took over $200 million from it in "contributions"), the Post Office (loses money every year), Amtrak (also loses money every year), PBGC (unfunded liability), Social Security (Ponzi scheme aka bigger unfunded liability), Medicare/aid (a bigger Ponzi scheme and the biggest unfunded liability) and finally out new health care program (sorry kids, there won't be any health care when you need it most, it will be gone by then, a casualty of the implosion of the United States.) Here is the story: www.usatoday.com/news/opinion/forum/2010-07-07-column07_ST1_N.htm?csp=obinsiteGovernment jobs: Bloated pay, benefits cost us all Updated 1d 5h ago | Comments 56 | Recommend 8 E-mail | Save | Print | Subscribe to stories like this USA TODAY OPINION By James Sherk Feel like you're not paid enough? Worry about losing your job? Wish you had better benefits? Ever think about quitting? If you answered "yes" to these questions, one thing is certain: You don't work for Uncle Sam. That's because federal workers are much better off than private-sector workers in all the major markers of job satisfaction — salary, job security, benefits and job desirability. And it's costing taxpayers a bundle. Start with the money. The average federal employee earns an annual salary almost 60% higher than the average private-sector employee — $79,000 vs. $50,000. Federal employees do have more education (on average) than private-sector workers. Their unions argue that this justifies their higher pay. But it doesn't. Even after controlling for education and experience, federal employees get paid significantly better — 22% more per hour, on average — than private-sector workers. Not all federal workers earn above-market pay. The government bases raises on seniority, not performance, so the most skilled and hardest-working federal employees are actually underpaid. Overall, though, government workers earn well above what their private-sector counterparts make, even before you consider benefits. Oh, the benefits Those benefits include more than one type of retirement plan. Federal employees can enroll in a Thrift Savings Plan that works like a 401(k). But they also get a "defined contribution" plan, which lets a worker with 30 years of experience retire at 56 with full benefits. Government workers also can enroll in the Federal Employees Health Benefits Program. There are no age, health, or pre-existing condition restrictions. Paid leave? Check. Federal employees with just three years of experience get 20 days annually, and those who have logged more than 15 years get 26 paid days off. Group life insurance? Check. And many federal buildings even offer on-site child care. To be sure, many large private employers offer two or three of these benefits, but very few offer them all. Job security Once you add up these benefits, the gap in total compensation rises even higher — 30% to 40% above comparable private-sector workers. Federal civil servants enjoy another perk: near-absolute job security. Private businesses cut hiring and increase layoffs when sales drops. From 2007 through 2009, the adult unemployment rate in the private sector more than doubled, from 4.2% to 9.4%. Not in government. The percentage of federal employees who lost jobs barely budged, going from 2.0% to 2.9%. This is largely because of civil service rules. It's virtually impossible to fire federal employees for bad performance once they've passed a one-year probationary period. Not surprisingly, federal employees rarely quit. In good economic times, they voluntarily leave at roughly a third the private-sector rate. And that disparity has only grown since the recession began. Why should taxpayers care? Because it's costing them money. If Congress were to set up a payment system like the private sector's, it would save about $47 billion a year. That's serious money. Lawmakers can take other steps: reducing benefits, contracting more non-essential tasks to private-sector companies, and making it easier to dismiss underperforming employees. "Be thankful we're not getting all the government we're paying for," Will Rogers once said. Indeed. With a little effort, we could even pay less for the government we have. James Sherk is a senior policy analyst in labor economics at The Heritage Foundation, a conservative think tank. Here is the study: www.heritage.org/research/reports/2010/07/inflated%20federal%20pay%20how%20americans%20are%20overtaxed%20to%20overpay%20the%20civil%20serviceMore articles on this subject: www.usatoday.com/news/washington/2009-12-10-federal-pay-salaries_N.htmwww.usatoday.com/news/nation/2010-03-04-federal-pay_N.htmwww.usatoday.com/news/washington/2010-04-20-kirkpatrick-congress-pay-levels-cuts_N.htm?csp=obinsiteWatch the movie, by Michael Moore (well he could have made it): www.cnbc.com/id/15840232?video=1538708403&play=1
|
|
|
Post by macrockett on Jul 10, 2010 11:13:43 GMT -6
www.businessweek.com/news/2010-07-09/states-face-pension-stress-as-gasb-rules-widen-gap.htmlBloomberg States Face Pension Stress as GASB Rules Widen Gap July 09, 2010, 12:11 PM EDT More From BusinessweekBy Dunstan McNichol July 9 (Bloomberg) -- States may face increased retirement- fund deficits and pressure to stop skipping pension contributions under proposals being reviewed by the Governmental Accounting Standards Board.
Pension-forecasting proposals from the rule-making organization, released June 16, would revise methods for projecting liabilities and investment returns. The changes mean estimated investment income likely will be reduced from current assumptions and unfunded liabilities will increase, Moody’s Investors Service said July 6 in a report.
The proposed revisions may make states less likely to skip pension payments, Cliff Corso, the chief executive officer of Cutwater Asset Management Corp., said yesterday in a telephone interview. “That should shed a decent amount of light -- a lightning rod -- to spur action.” Estimates of the gap between the value of U.S. public- pension plans and the amount needed to cover promised benefits range from $500 billion to $3 trillion. The smallest projection, from the Pew Center on the States, is based on annual investment returns of 7.25 percent to 8.5 percent. The higher figure was forecast by George Mason University researchers using the relatively risk-free 3.5 percent return on 15-year Treasuries.The standards board, based in Norwalk, Connecticut, proposes using the expected return on a basket of high-quality municipal bonds, which would produce a deficit somewhere between the high and low estimates. The Bloomberg Fair Market index of AAA-rated municipal bonds ended yesterday yielding 4.38 percent. Lower Estimated Returns
“The average discount rate will almost certainly be lower than is being currently used,” Moody’s said, referring to the proportion of projected liabilities forecast to be covered by investment income. “For plans that are expected to be underfunded, this lower discount rate will result in large increases” in the reported deficits, Moody’s said.
Every percentage point drop in the assumed rate of return would increase reported pension underfunding by between 8 percent and 12 percent, according to Moody’s.“Shedding a light gets things out there and gets things moving,” said Cutwater’s Corso. His Armonk, New York-based company manages $5 billion of municipal bonds in a $44 billion fixed-income portfolio. The proposed accounting revisions, which are subject to comment through October, come as states are reporting widening pension liabilities following declines in asset values in the year through June 2009. Wilshire Associates, based in Santa Monica, California, has estimated the median investment loss at 17 percent that year. As fiscal 2010 began, states had only 65 percent of the amount needed to cover promised benefits, down from 85 percent a year earlier, a Wilshire analysis of 125 retirement plans showed. 8 Percent Benchmark
Public-pension plans in the U.S. held assets valued at $2.3 trillion on June 30, 2008, according to a February report from Washington-based Pew. Most commonly, the funds project future returns to average about 8 percent a year, Pew said. The biggest, the California Public Employees’ Retirement System, or Calpers, currently forecasts annual investment gains of 7.75 percent and is considering lowering that benchmark.
In Illinois, the Senate is balking at a plan to borrow $3.7 billion to cover pension fund payments this year, after issuing $3.5 billion in bonds in January to meet last year’s obligations. Illinois shares an A1 debt rating from Moody’s with California, the lowest among U.S. states.
Soaring Payments Pennsylvania’s payments into its retirement plans are projected to almost triple in two years, to $3.7 billion from $1.3 billion in the current budget, Governor Ed Rendell said July 6 in a statement. In New Jersey, the $29.4 billion budget passed last week was balanced partly by skipping a scheduled $3 billion pension payment this fiscal year. Public defined-benefit plans in the Garden State were underfunded by $45.8 billion as fiscal 2010 began, according to a state bond-offering document in May. In its June 23 report, George Mason’s Mercatus Center in Arlington, Virginia, put the deficit at more than $170 billion. The accounting standards board will take written comments on its proposed changes through Sept. 17. Hearings on the proposal are set for Oct. 13 at the Hyatt Regency DFW in Dallas; Oct. 14 at the offices of KPMG LLP in San Francisco, and Oct. 27 at the Crowne Plaza New York-LaGuardia Airport in New York City. --Editors: Ted Bunker, Pete Young. Video from cnbc related to pension assumptions and underfunding. www.cnbc.com/id/15840232?video=1540083671&play=1See also: www.credittrends.com/blog/
|
|
|
Post by macrockett on Jul 13, 2010 22:51:12 GMT -6
JULY 14, 2010 WSJ Opinion
A Welcome Veto Threat
The White House takes on the left over education.
Rare is the occasion when President Obama challenges his party's left wing, so the White House deserves credit for standing up to Democratic leaders in Congress who want to roll back his education reforms.
For months, Democrats on Capitol Hill have been trying to appease their teachers union supporters by passing a rich bailout for public education employees. And on the eve of its July 4 recess, the House passed a war-funding bill that includes $10 billion in grants to school districts to avoid teacher layoffs.
However, to win over enough moderate Democrats to pass the bill, House Appropriations Chairman David Obey needed to add less to the budget deficit. So he offset the school grants with $800 million in cuts to several education reform initiatives, including Race to the Top ($500 million), the Teacher Incentive Fund ($200 million) and charter school expansion ($100 million).
The White House reacted by threatening to veto the bill if it includes these reforms. "It would be short-sighted to weaken funding for these reforms just as they begin to show such promise," said a White House statement.
To say that this threat has left Mr. Obey upset is to understate his charms as a legislator. And the Wisconsin liberal, who is retiring this year, has a point that the White House position on a teacher bailout has been less than consistent. In May, Education Secretary Arne Duncan wholeheartedly endorsed a much larger education bailout ($23 billion) sponsored by Democratic Senator Tom Harkin of Iowa, who dropped the proposal after he was unable to find any Republican support.
Mr. Obey reasoned that a smaller bill would have a better chance of passing, and there's little doubt that the White House would be on board if Mr. Obey's proposal didn't gut funding for its reforms. Nevertheless, the Administration is right to take a stand, and the episode provides a useful insight into the priorities of this Congress: When there's a choice between education reforms that help kids, or preserving the status quo by helping teachers unions, Democratic leaders always pick the unions.
We've sometimes criticized the details of Race to the Top, which provides education grants to reform-minded states. But there's no doubt that the program has prodded otherwise reluctant state legislatures to allow more charter schools, among other reforms. President Obama and Secretary Duncan have also consistently promoted more charter schools and called for more teacher accountability. Given that no one from the Administration was invited to speak at either the American Federation of Teachers or the National Education Association conventions this summer, the White House must be doing something right.
Mr. Obey and his union defenders insist that teacher layoffs will harm kids. But school districts have been adding to their payrolls for decades without regard to student enrollment and without much to show in academic improvement. Total education spending grew by 32% between 1999 and 2009, while K-12 enrollment has grown by less that 1% each year over the same time period. The reality is that districts could economize and trim the bureaucracy without having to lay off as many teachers as they claim.
The teachers unions want more money and less accountability, which is what they'll get if the Administration's reforms are tossed overboard. And too many Democrats in Congress are all too happy to oblige. Let's hope the White House stands by its veto threat and forces Congress to side with the kids over the adults, for a change.
|
|