Thursday, January 27, 2011

Reminder: Tonight's Special BOE Meeting 7:30pm Town Council Chambers

It's been confirmed that tonight's special BOE meeting is still on for 7:30pm. The only topic on the agenda is the 2011-2012 BOE Budget. This a meeting of the BOE as a whole and I expect a vote to take place on adopting a 2011-2012 Budget.

Tony Perugini


Anonymous said...

I heard some BOE members mention retirement incentives. Is this an option and is it considered a concession? I never understood how a retirement incentive saves money. Paying someone to leave a position doesn't make any sense to me. I don't understand how this is a concession.

Anonymous said...

OK. See if you can follow. 30+ year teacher makes $80k+, + payroll taxes, etc, health care cost...= $100K+ easily. Buy them out for $7-8K a year for 2-3 years to help offset healthcare until they reach Medicare age = nearly $100K per year per buyout for the town = 2 younger teachers jobs who make half per buyout as well. It's not rocket science, happens in the corporate world all the time. If you are opposed to this, then it is on some principle reasoning, but in no way based on economic realities.

Tim White said...

Also depends on how you define "savings."

From a BOE budget perspective, one teacher who has been working for 37 years probably costs upwards of $90,000/yr in salary + bene's. And as 6:23 pointed out, you can hire two first year teachers for the equivalent cost.

Or perhaps if it's a $90k/yr CHS math teacher, you hire one new teacher (farther up the payscale because of higher demand) for $60k/yr... netting a $30,000 "savings" for the BOE.

Regardless, the critical issue is that a teacher's pension is not funded from the BOE budget. It's funded by the state budget.

So taxpayers may have a different view than the BOE.

A taxpayer sees that each retired, vested teacher typically gets 2% of his/her final salary for each year worked. So many teachers will work for 37.5 yrs to hit the max bene of 75% of their departing salary (or something like that).

So a taxpayer may see multiple budgets, while the BOE will be more focused on its budget.

From this perspective, the $90k teacher is replaced by two new teachers at $45k each, as well as a $70k/yr pension. So $90k becomes $160k after a retirement. From that perspective, costs have gone up.

And there's other material costs involved, such as healthcare. And that can be significant as the Town / BOE budgets cover the healthcare costs of retired teachers until they participate in medicare (this represents the lion's share of the town's $20 million OPEB liability)... along with the healthcare costs of the new teachers. These healthcare costs are significant and cannot be ignored, but I don't happen to know those numbers and they vary widely based on different factors (i.e. single vs. married).

I'm just saying that the assertion that a teacher retirement "saves" money is probably taken from a BOE budget perspective... which may be quite different from a CT taxpayer perspective.

It is also important to note that while teachers (and maybe administrators) have their pensions funded in Hartford. Both town employees and non-teacher BOE employees (who get pensions) have their pensions paid from the town's pension plan.

Tim White said...

Tony, speaking of the BOEs non-teacher staff (who are included in the Town's pension plan)... as BOE union contract negotiations occur, I hope you mention to the BOE that elimination of DB plans for future union hires is a goal of the Council. Not that the BOE must have the same goal, but I think it'd be beneficial for all BOE members to be cognizant of that goal... and that the Council is making progress in achieving that goal.