Matt Yglesias has an interesting chart in this post. The chart shows that student achievement does not closely correlate with spending per student.
Obviously, there are other factors which are important. Spending is a part of the solution but is not the solution in itself.
For instance, this article in the Boston Globe caught my eye.
The sprawling Wake County School District has long been a rarity. Some of its best, most diverse schools are in the poorest sections of this capital city. And its suburban schools, rather than being exclusive enclaves, include children whose parents cannot afford a house in the neighborhood.
Not in the article but from other sources, ...
... polls show over 96% of parents in the Wake County system were happy with the education their child was receiving.
Go figure what is going on here.
Posts
69 comments:
I agree we can spend less and get more here in Dartmouth. We should push for regionalization with New Bedford - we will spend less and achieve integration with a poorer demographic. The best of both worlds.
As Mr. Michaud stated at the January 10th Select Board meeting, the town has to deal with the unions and they will fight regionalization for any number of reasons.
Yes and there can be no reasonable reason that regionalization makes no sense for our community. If it saves money it's all worth it right? Team up with New Beford or Westport, they say it will save us money and I believe them so what's the problem?
If you remember, Mr. Michaud has been a staunch advocate of regionalization from the beginning and has researched and worked to that end so that Dartmouth could benefit. Unfortunately it is the unions that are throwing a monkey wrench into the potential of doing so. They will protect the employees at all costs, but, as we have seen in the past, it is sometimes to the detriment of our town and/or our school children.
The unions are the reality in this case. It is great to be an idealist and great to hope that things will change, but one cannot continue wearing the rose-colored glasses indefinitely without accepting that fact.
I guess in some instances and for some people it is all about the almighty $$$$. Negotiations will have to be brutal, perhaps, to get some of what we need for the Town's sake and not just for the employees'. Hail to the hero who can successfully negotiate the situation!
I am very proud of the school system we have here in Dartmouth. The hard work of many of our teachers and administrators has served this community well for many years. Further proof of why the most spending per pupil is, at best, a nebulous concept.
The measure of any regionalization of any service for Dartmouth is where Dartmouth would, at a minimum, be able to provide the same level of service. The concept makes sense until you look at pooling with any of our adjourning communities. None of which, from my perspective, provides the level of service we have here in Dartmouth. Our loss of quality and timeliness of services would be another community’s gain. Is that where we want to go?
Unfortunately it is the unions that are throwing a monkey wrench into the potential of doing so.
The Unions are coming, the Unions are coming. You people make me laugh, what possible services, suggested for regionalization, could a union STOP? The answer is none!
Go back in history several years ago, Municipalities that regionallized for road salt purchase, paid in excess of a $100.00 plus per ton, this was documented in a standard times article.
Our stand it alone!!! Unionized TOWN, paid less that $60.00 per Ton, fortunately we have good honest hard working people in this Town, who did the right thing and saved this Town tens of thousands of TAX payer dollars that year, just on road salt alone.
This is one small example of how regionalization is not always cheaper, just a good argument if you look to expand your political future, and how did that work out?
Bye the way our Town managers were never Unionized, until the list of people that were going to be fired started, and Michael was #1. Now they have joined the Steele Workers Union, good luck with the so called Schindler List, the Steele workers union will shut this Town DOWN in a heart beat.
The school system - highly touted by many - is average at best. Look at the numbers and face the reality. Average (or in Dartmouth's case) below average spending results in average performance. So yes Dartmouth does ok when compared to their below average costs and spending nothing more.
To: January 24, 2011 6:55 AM
Your post is completely without merit. If you were to cite facts that accurately measure performance like dropout rates, secondary matriculation rates and secondary graduation rates your statements would prove completely fallacious.
Give credit where credit is due.
Regionalization for purchasing power is far different than regionalization for services, especially if jobs got eliminated with the latter.
Would unions stand for that? Would they okay eliminating a position so a town could save money? Aren't they PRO employee? Maybe I don't understand the workings of a union, so enlighten me.
It wasn't until the seventies when the SSC voted that police, firemen, and teacher are allowed to form unions. As a former town employee, union organizer, it became obvious to me that sitting down with the finance committee and the selectmen to discuss a wage increase, was like asking your parents for an increase in allowance. It was a humiliating experience. Understand that city/town workers received generous medical benefits because insurance was cheap. A retirement system plan was short change, and it caught the attention of a few.
Unions provided protection from the employer, also known as the tax payer. Elected officials understood that employee's and their families vote. Once the unions were engaged, the state legislatures passed laws forbidding public safety workers from striking, or work stoppage. Cities and towns were now beginning to conform to state a federal work rules. Time and one half, eight hour days and a forty hour work week. Holidays became paid holidays not just a day off, with no pay. It took a couple of decades but with time city and town employee's were making as much if not more money, then those working in the private sector.
How did the cities and towns get into such a situation? Answer: greed
Insurance cost has skyrocketed, retirement cost are escalating and the tax payer is going broke. Unions have caused big business to shut their doors and move away to other countries. Unions were good for the common folk until they became greedy. Now the politicians are upset with the unions, and I don't blame them but how does it feel to be on the side of weakness. Nothing you elected people can do. We have binding arbitration.
Here is one solution; stop abiding by all the state imposed mandates that have a cost factor.
Declare insolvency and turn the keys over to the state, along with the CPC debt.
I'm tired of the term "regionalization." Please, be more specific. There are certain departments where it might work and others where it would not. Animal control seems non-controversial, but then think about a call in NB's South End and then one up in Dartmouth's Old Fall River Rd. How would then wind up bringing efficiency. Also, at the risk of sounding too critical -- there's not a whole lot of NB departments that anyone would want to baost about -- and they're all short-staffed and dealing with furloughs. How is this our gain?
No question the cost to the taxpayer of public employees is generally way out of whack. Someone performing basic clerical work making $50k per year? A job that would typically pay $25k in the public sector. Someone performing basic road maintenance making $50k per year? Again, maybe half of that out in the private sector. A police officer making $100k a year? A doctor's salary working for a medical association is similar. Does that make sense? Pension costs and other retirement benefits vs. a 401k and social security benefits? Of course, Dartmouth has the same issues as any other municipality in the state. Plenty of blame to pass around on this. Will it come to the state and its' municipalities becoming insolvent? One thing for sure, regionalization of services will not solve this problem.
Jan.27 @ 4:35 PM
As it relates to your Jan. 27 @ 4:35 PM posting, where have you been getting your information? I know it hasn't been the best winter, and chances are the shorter daylight time has caused some to feel depressed, but don't allow yourself to believe police officers are earning money (salary ) equal to a doctor. I certainly agree that it doesn't make sense. Now, hold a paper bag close to your mouth while taking a few breaths. This will help to regulate your breathing, and allow the oxygen to flow into the brain.
As you may have noticed, a police officer can offer good medical advise, but a doctor has a license to practice medicine. It takes many years of study and medical practice, to become a certified practicing physician. If your having a heart attack, don't call the police ......or do we?? If your having a heart attack, call for a doctor. Makes sense to me.
I know how it feels to have a heart attack..........call 911 and you get a police officer who arrives within seconds and applies a medical devise that automatically calculates your heart and allows an electrical pulse to jump start the heart, if needed. I arrived at the hospital surrounded by several police officers
and a doctor who had me taken by helicopter for advanced medical care.
Thanks to the police and the doctors, I'm living prove that all people, police, doctors and all those dedicated to saving life are within a few seconds away. 100 K didn't make an ounces of concern, to me and never will. Life is too short to complain..... so enjoy life while you have it.
A cop at top step makes 50,000 dollars, overtime, advancing in rank and 3rd party details make up the rest.
No police officer makes 100,000 per year unless you are speaking of the Chief and his Deputy. I hate the lies on this blog.
I knew the postings in here about public service employees and their compensation would generate emotional and inflammatory responses. Of course, whatever "facts" presented would likely be twisted to try and make some inane points. So let's try this. Who pays overtime? Who pays for any of the additional compensation, excluding paid details, isn't it the same taxpayers? Does a doctor work a straight 40 hour week? None that I know of. So here we are again. Some public service employees being compensated at a much higher rate than their private sector counterparts. I certainly would not demean the important, and often critical, services provided by a number of public sector employees. That is not the point. The point is, the compensation for those services is often well beyond their real worth. For example, ever check to see what an EMT makes? Add to that the locked in compensation increases through union contracts and here we are today. Let's see what happens over the next few years. Predictably, we will have layoffs of valuable, but junior in seniority (and cost) public employees at the cost of maintaining the over compensated ones with more seniority. In the end, the taxpayers lose out on both ends.
We already spend below average. Does this post suggest spending even less? Should we be the community that pushes the limit to the nth degree? Sure, let's give it a shot. Cut school spending some more and let's see where it goes.
January 30th, 9;52 am: Kind of sounds like those grand contracts-for-life in 2006, doesn't it? Let enough other employees go who would make up the entire yearly salary of one of these other eight.
Let the eight keep their jobs while the "underlings" face unemployment.
Seniority wasn't even a consideration; for that matter, experience wasn't, either. And seniority doesn't necessarily equate with experience.
Back in the day, teachers worked second jobs in the summer because they needed the money. Cops retired and then had to work other jobs to help pay their bills. A lot has changed since then. I think it is for the most part better for everyone. However, the state in nearly broke. State aid has been cut way back. The pension system is seriously underfunded. Economic growth is virtually non-existent. The housing industry is in shambles. Layoffs are still commonplace. Where is the money going to come from?
@4:45 - no only 'back in the day' but many teachers work in the summer still. Many tutor suring the year for extra money too. Times indeed have changed but some things stay the same!
Where is the money going to come from?
Very simple, start the cuts from programs recently added to the budget!!! Like CLOSE the plush Cushman Academy and stop the FULL DAY tax Payer subsidized DAY CARE I mean Full Day Kindergarten. That will save over a Million dollars right there.
Recent studies have shown the average public sector employee (when education is factored in) make less than their private sector counterparts.
Let's not make up facts to support your argument.
To: February 2, 2011 2:26 PM
What studies are you referring to? Site specifics please. Or is this just more of your fabrications?
Just about every town department is particularly funded by some type of user fee, enterprise system, or mandated minimum funding. This includes the water/sewer department, department of public works, water ways commission, pay as you throw, water and sewer fee's are directed to the water department, beach sticker fee's for the park department, and the school department charges fee's for sports, music, football games, basketball games, and the list goes on. I may have missed a couple of fee's or ticket sales, but for the most part I'm on target.
There are a few town departments that rely strictly on tax payers money. The general office departments at town hall, and the police department. No such enterprise system for the cops. The cops are at the mercy of the town selectmen, and the town tax payers. No money from the state or federal government. The only town department that is open 24/7 is the police department. No snow days, holidays, Christmas, new years, or fourth of July. 100% of the police department budget is money received from Dartmouth tax payers. A small amount of ticket money reaches the town general fund but no ear marked for the cops.
The town selectmen, also known as police commissioners, must provide our town with police protection. The selectmen hire, fire, and promote police officers. Appoint the police chief and his deputy, who both serve at the pleasure of the selectmen. Dartmouth has 64 square miles of land area, and over 200 miles of roadway to patrol, a population of 35,000 thousand residence, schools, colleges, businesses, malls, strip malls, 195 interstate from Westport to New Bedford line. All this area to patrol and God forbid a cruiser crash should occur.
.
Regarding relative compensation levels, I guess I must be completely uninformed? Although I have seen many payrolls and HR compensation studies, I must have completely missed the numbers? Although I see middle managers making $60k or so with no paid overtime working 50 hours a week or more, I must be living in some kind of misinformation vacuum? I see many of these middle managers with master’s degrees. Middle managers with lots of responsibilities. Middle managers expected to work more than 50 hours a week as the needs arise. Middle managers working for companies with far less of a health insurance plan. Although they may only pay 25% (or even more) of the premium costs, the coverage’s include many deductibles, high cost co-pays, limited coverage’s, and significant maximum out of pocket limits that may cause the typical subscriber many thousands of dollars per year over and above their premium contributions. I see these middle managers typically self-funding their retirement plans. The lucky ones get a modest or discretionary match to help fund retirement. Certainly not even close to fully funded pensions with the option to collect on them well before normal retirement age. I guess the real comparative numbers just don't count?
Mass Budget has a comparison study of state versus private costs at this link.
Two of the three items in the comparison are services, early childhood education and health care, which are provided by contractors. So there is no direct comparison between actual salaries. The final one, education, does find that costs, not necessarily salaries, are lower in public schools. A footnote, 51 on the Who pays more for school? page notes that unfunded pension liabilities are not included in the public sector costs.
The answer here is complicated and not readily apparent without exhaustive study. In some ways a public employee may be less costly and in some ways is not. My take is unless there are serious reforms to public pensions, those pension costs alone will drive the Commonwealth and municipalities to outsource work to private companies.
What I am suggesting is that the state and towns must go to defined contribution plans such as most in the private sector have or out source the work to get the same result.
Bill, can you enlighten us readers on the meaning of Cushman Academy please. One of your bloggers seems to think the Cushman school is some sort of academy rather than a kindergarten school. What makes it an academy?
Bill,
The Pension fund is NOT an unfunded mandate. The town chooses not to put the 6.2 % they are saving from being Social Security exempt into the system.
The average employee almost completely funds his/her own retirement via 11% payroll deduction and an additional 2% over 30,000.
If the town took the 6.2% social security percentage they are saving and put it in the retirement system there would be plenty of money.
Not to mention the largest employee block (teachers union) isn't under Bristol county retirement, it is state funded.
Public educations was established to accomplish the goal of educating children. Educated children grow up to become educated adults. In the beginning, education was obtained from knowledgeable people who understood math, reading, and writing.
Federal and state laws were passed, mandating all children to attend public schools. All children attended a public school funded by the states. Before child labor laws were enacted, most 14 year old students left school to entered the work force.
Between 1930 and 2011 the federal and state department of public education became a political force. Local control taken away from cities and towns. Powerful state teacher associations, and local town/city unions now dictate school policy. Local school committee's regulated to nothing more than a rubber stamp. Mandated minimum school funding. When will this power struggle come to an end. Dartmouth is looking at a 75 million dollar budget. More than half is school related, and untouchable. I'm not against public education, but I can see the elephant standing in the room.
How can we continue to feed a beast that is completely out of our control??Public education was never intended to become so out of control. I know and understand that the Dartmouth music association generates the money needed to fund the school band, but who is paying the music teachers salaries. Example: I've listened to the Dartmouth marching band practicing into the late hours of the night, day after day, night after night. I wish they were all doing their home work assignments as well. It's nice to travel to other states to compete, but what is the cost? Thanks for allowing the ranting, now I'll take my med's.
The average public employee funds their own pension??? X amount of dollars go into the pension pools. Far more than X dollars is currently, or soon will be coming out of the pension fund pools. They are seriously underfunded! Actuarial studies show this to be the case in all but 1 state in the country. Bad news folks, that state in Florida, not Massachusetts. Where is the balance going to come from? You guessed it: THE TAXPAYER is on the hook again! And it’s the town's fault that it’s not throwing in the FICA match??? So you want the best of both worlds? As in a pension plan and social security? Anyone who claims that pension plans are self-funded is not being truthful or is simply ignorant of the facts (living in the land of make believe?). As far as another poster in here claiming fees pay for most of the public services here? Yikes! Another bad need of a reality check there guy! Unfortunately, I have to agree with you Bill about privatization of services to control costs. Maybe we need to start looking into it for everything but police and fire services?
to 9:16 a.m. - you know who pays music teachers. The town does. What is your point? Yes the students in music work hard at their programs but you'll find by and large these same kids also excel academically. Again what's your point? As far as travel to other states to compete (and win by the way) those costs are borne by the DSMA who raises tens of thousands of dollars a year to pay for these trips. Your cost for that travel? Nothing. Again your point?
Cushman School has always been known as the academy because of where it is located and a few years back they had something like 12 kids in one class while other classrooms in town were crowded.
Now it is serving the town with full day kindergarten. I'm hoping that class sizes are equal throughout the town.
More lies about Cushman - one only has to look at the enrollment data for the years Cushman was open to distinguish between truth and urban legend. But why bother urban legend makes for more interesting fiction.
@ 4:16
Please do not pass on incorrect data. My child was at Cushman for 4 years before it was shut down. Class size for those 4 years? 20-23 students per class just like the other schools. There were 2 classes in his tenure there that had 18-19 students which was caused by a small enrollment in one particular year.
So it got closed and what do we have now? 22-25/class in all the schools left open. Progress.
@4:16
Cushman's location? You mean next to Benny's on Dartmouth Street? DOwn the street a 1/4 mile from DeMello? Does that make it the DeMello Academy?
the simple fact that your "hoping" and afraid to ask someone is about normal for this blog.
FY 2008 the total salaries for Dartmouth employees was 39,660,259.34 the town saved 6.2% on those salaries by being Social Security exempt which equals 2,458, 936.08.
The Town paid roughly 3 million into to the retirement system or 541,000 more than they saved. That is hardly a budget buster.
Seeing the most employees are paying between 11 - 13 % into the fund the town is getting a break paying half that amount.
You said And it’s the town's fault that it’s not throwing in the FICA match??? So you want the best of both worlds? As in a pension plan and social security? Anyone who claims that pension plans are self-funded is not being truthful or is simply ignorant of the facts (living in the land of make believe?).
You misunderstood my point, I am not saying town employees should receive both, I am saying if the town invested the savings from not having to pay SS it would be almost as much as the alleged unfunded mandate.
The Town is ALLOWED to be exempt from SS payments because of the retirement system. The reasoning behind that law is to allow cities and town to invest that money saved into the retirement system, but cities and towns just kept the money and underfunded the retirement system which put us in the hole we are in now.
So the solution to the current SEVERELY underfunded pension system is for the town to just throw in more money? Certainly a very simplistic and poorly thought out solution. How much is the plan underfunded? More than ONE THIRD of the total pension liability is underfunded here in Massachusetts. This is part of the 1 trillion dollar total of total underfunding of state run pension plans in the US. Here is a link for you to digest:
http://www.pewcenteronthestates.org/report_detail.aspx?id=56695
The sad fact of this is that the town has lived way beyond its' means over many years. Call the collective of the taxpayers, town meeting members, various SBs, union leadership and members stupid. Stupid because of the commitments demanded and made that cannot be kept without seriously digging into the taxpayers’ pockets. Again!
Cities and towns did not set aside enough money for years, finally a law passed in 1987 demanded the correct amount of funds plus the previous unpaid amounts must be caught up by 2028.
The problem never was, nor is, the employee contribution that is taken directly from paychecks every week.
I am not advocating throwing more money "at" the system, I am saying pay what you owe to the system and it will be fine.
Now lets get something straight right from the get go. Most Americans don't like being told what to do. They recent authority, don't like law enforcement people. Americans have so many rights that most don't understand or want to know their rights.
BUT...most Americans don't want the politicians messing around with their law enforcement people.
Thats right folks. You may hear a lot of cop jokes, but when the shit hits the fan Americans will call the cops.
Most Americans say they can't be paid enough money to become a cop. These guys/gals deserve all the money we Americans can give them. This is true. Americans recent authority, don't like cops, but they don't want anyone messing with them and pay them the money.$$$$
Most people who live in Dartmouth support their cops. The first town wide override ever was to allow more funding for the cops. Dartmouth cops do a great job protecting their town and the cops don't like it when some dirt bag from New Bedford comes into Dartmouth to stick a gun in the face of one of their district business people. Dartmouth cops are dedicate, honest, intelligent, and get a great retirement package. After 30 years a Dartmouth cop can retire with 80% of their salary. These cops pay 8% of their salary into the Bristol county retirement system and the town equals the amount. If you decide to take this retirement package away because you don't feel the town can afford it, then you had better think twice. What you going to do when they come for YOU?? Ask Obama(:
As I review the 2009 Dartmouth annual report, I see the following key facts:
1. Pension funding of nearly $2.9 million by the town. Please correct me if I misinterpreted that.
2. Revenue generation of nearly $42 million dollars from real estate taxes. Far and away the town's largest revenue source.
3. Approximately $.07 from every real estate tax dollar collected to fund the town’s share of the employee’s retirement costs.
This does not include any contribution from the town employees, if I am reading the report correctly. On that basis, one may assume the complete responsibility for the pension underfunding problem rests squarely on the shoulders of the town's unions and their membership. Given that, what are the unions and their membership going to do to bail themselves out of the problem they created?
The problem with pensions is that you don't really know how much they will actually cost. And as many of us live longer today, the costs of yesterday are inadequate today.
Private companies realized this problem decades ago and went to a defined contribution plan (401K), rather than a defined benefit plan (pensions). Problem solved.
We just need to get government to follow their lead.
The system is not "fine", as alluded to previously in this thread. Mr. Trimble's position on this echoes that of many, many people that I know. The pension system, as is, cannot be sustained. It bleeds red and can only be "fixed" by massive infusions of taxpayers’ money. Card carrying, pension eligible union people will never admit that. Why give up a good thing? When you retire, you get a nice check that usually exceeds more than what you made in most of the years of your career as a town employee. The only problem is you don't want to advertise or admit that is the case. Especially to people who worked just as hard, if not harder, in their working careers, as you did. Their retirement typically consists of living on a combination of social security benefits, 401k withdrawals, and a part time job that represents just a fraction of what they earned in many of the years they worked. This includes people who are well educated and were in responsible jobs. Changing this one way street will undoubtedly be ugly.
Allow the States, Cities and Towns to declare bankruptcy and then we can eliminate all contracts and start from scratch and renegotiate on terms more favorable to the taxpayer and more in line with the DPS (Dreaded Private Sector) It happens all the time in the real world.
Thank God JFK in his wisdom allowed collective bargaining units into the civil service world of government employ. It has been all downhill from there.
Their retirement typically consists of living on a combination of social security benefits, 401k withdrawals, and a part time job that represents just a fraction of what they earned in many of the years they worked.
The bottom line here is that Municipal employees do not pay into Social security, and only pay into FICA is hired after 1988 thanks to Regan. So how is a municipal employee going to collect social security if they never paid into the system? answer!!! they wont be eligible.
Pension contribution depend on your hire date, some employees pay 7%,,5%, or as much as 13% a week. do the math on salaries, some employees pay well over $125.00 a week on average, look at you check next time, and your S.S contribution is not that high. Why did Chelsea go into receivership, in the late eighties, two things they underfunded the pension contribution, and health care contributions.
The Town pays a higher contribution today,why? because they are mandated too the Town under funded the system for years, not the employees fault, it was the fault of the Town fathers, with the robbed Peter to pay Paul attitude. The employees paid every week, that's for sure.
Robbed Peter to pay Paul? With what money? All the millions in leftover cash that the town didn't know what to do with? How long have you been around? How often have you looked at the town budgets? Did you notice that the stabilization fund almost disappeared? Did you notice that the town was audited by the state to see if it insolvent just a few years back? So that argument doesn't hold much water does it? I guess you will have to start blaming the taxpayers for not volunteering more overrides to pay for this now?
Why can't the $90,000 that the school got a while back come back to the town for the town's residents? Was it really necessary for the school to cut the activity fees in half and eliminate transportation fees?
During the early sixties, after graduating from high school, I didn't have the money to enter college so I joined the military and spent four years practicing on how to kill people. Upon my discharge I went into the work force and found a job working at chamberlin making 105 mm bombs to be sent out to Southeast Asia so our military could kill commies.
This is a true story. During this period in time I discovered that my department supervisor killed himself by taking a gun to his head. It appears that while on his watch the company was losing money so they decided to fire him. He was fifty years old with two children in college and could not find another job.
I applied for a job working for the town of Dartmouth. The department head told me the pay is not great but the bennies are good. He was talking about health insurance, retirement, and a steady job. I left the private sector making 4,200 dollars per year and began working for the town making 3,900 dollars per year 50 hours a week no overtime or time and one half. No extra money for working over 8 hours in one day.
As time moved along some big shot judge told the town that we could form a union and the rest is history. Oops, during my time working for the town I decided to spend some of the little money I had and bought a couple of tenement houses in Dartmouth. Now that I'm retied I collect a town pension equal to 80% of my salary. I collect monthly rents each month with no mortgage to pay.
Now can some one tell me what I did wrong? Now I see jobs going out to other countries and some of the countries we had to fight and kill many of their people. China is a commies country and we buy a lot of things made in China. Can you tell me what we are doing wrong. We fight the commies and now we work for them. I see and hear what is going on in the oil rich countries and it seems to me that everyone hates America. Something is very wrong with the people who run our country. Maybe it is time to stop and smell the manure that these people are selling to us. Maybe it is time for America to start worrying about Americans and send a finger to those people who make the oil and charge us up you know where.
We have a nice country and except for a few wackies we are good people that want a job and live a happy life. God bless America...what say you?
Maybe I should make the run for selectman??
Approximately $.07 from every real estate tax dollar collected to fund the town’s share of the employee’s retirement costs.
This does not include any contribution from the town employees, if I am reading the report correctly.
The town is playing "catchup" for all the years they did not put enough money into the retirement system. Employees contributions have been taken out every single week without fail.
If you care to place blame, blame the BOS from the 70's and 80's who underfunded the system forcing the State to pass a law in 1987 forcing towns to pony up their share.
2.9 million towards the retirement system and they saved over 2.5 million by not having to contribute to S.S. the net "loss" for the town is 500,000 dollars. The only reason it is higher at all is because of massive underfunding!!! The pension system works fine WHEN the cities and town contribute their fair share.
renegotiate on terms more favorable to the taxpayer and more in line with the DPS (Dreaded Private Sector) It happens all the time in the real world.
Laughable really. Collective bargaining is just that.... bargaining. Neither side gets what they want and if they cannot reach an agreement binding arbitration decides who gets what.
Compare Dartmouth salaries to any community in the area and you will see that between a 50/50 split in health insurance and their wages they are on the bottom end.
An arbitrator would surely side with the union and give a hefty raise.
I love these comments about the taxpayers not kicking in enough money to fund substantial retirements. Why don't you just start more override initiatives? Be truthful and forthright that you believe the union memberships are underpaid and underfunded for retirement? Don't be surprised though, if 80% of the voters laugh at you just like most of the posters here do.
It is rob from Peter, to pay Robert.
I do not need to start an override. The Legislature passed a law requiring cities and towns to pay the money they owe into the retirement system by 2026.
The town will have to find the money they are required by law to pay.
2026 OK, come say 2020 they'll push the date back to 2036. ZZZZZZZ
more of the same.
Please note the "quick and dirty" schedule I have put together below:
Eligible annual earnings
$60,000 $60,000
Contribution % 13% 13%
Paid in years 20 30
Total
contribution $156,000 $234,000
Total
contribution $156,000 $234,000
Paid out years 20 20
Average annual
amount paid $7,800 $11,700
Assumptions beings no other contributions, flat plan earnings, and 20 years of retirement.
Where is the rest of the money going to come from?
Quoting Tim Cahill on anything is hilarious. Even his running mate bailed on him in the last election.
So we are back to square 1 again aren't we? As Mr. Michaud alluded to in the last SB meeting, the town does not want to pay current union scale costs. It simply cannot afford them.
The total contribution will be much higher when the interest compounds. even assuming a 7% return on the investment the money will double every 10 years for 32 years.
Additionally all the money is not paid out at once so the balance continues to compound doubling at 10 year intervals.
You cannot just count the total contribution over 32 years without including the interest made on that investment. Sheesh.
You refuse to accept fact and instead make up your own absurd numbers. The Gov. appointed a task force which came to the same conclusion as Cahill and the current chairman of the retirement system. Look it up instead of believing Michaud (whose brother collects a state pension at 44).
The amount compounds? Where have you been the last 25 years? Ask anyone who has had money in the stock market over that period of time. Earning an average of 7% per year is pure fantasy. How many times has the market collapsed over the last 25 years? Ask anyone who has been in the market about how much they have lost in each of those collapses. A good example is the billions Harvard University lost in 2008 in their endowment funds. When actuaries audit pension funds and find them severely underfunded, they take into account how these funds have been invested, how those investments performed, and what a reasonable expectation is for fund performance in the future. That information is translated into cash flow based upon average payouts over anticipated retirement years netted against amounts to be contributed. These are professional people, not some person who manufactures facts to support their flawed arguments. The results of these audits show how underfunded these pension systems are.
@ 11:29 -
Average performance of the market over 25 years = 9-10%. Look it up and dont use a short period snap shot to bolster your point. Too obvious.
http://observationsandnotes.blogspot.com/2009/03/average-annual-stock-market-return.html
Twenty years ago, the Magellan Fund was trading at roughly $72 a share. It trades today for roughly the same price. It was valued at over $100 a share during that period and it was valued at near $40 per share during the same period.
This fund remains one of the largest funds globally. It provides a reasonable benchmark for overall mutual fund performance.
This is exactly the type of investment fund that a 401k and various pension funds invest in.
There has been no 7% average annual return in the last 20 years. It is not uncommon that these types of funds have actually lost money over that period of time making retirement funding even more difficult. Is the town supposed to pay for this shortfall too?
ummm why cherry pick one fund? why not use the overall average which is more representative of actual market performance. Surely you have not invested all your money in 1 fund? If so I understand your frustration.....but seek some professional financial guidance soon.
The amount compounds? Where have you been the last 25 years? Ask anyone who has had money in the stock market over that period of time. Earning an average of 7% per year is pure fantasy? Really???
I hate (actually I like) bursting your bubble. Here is the data from the Bristol County Retirement system audit of 2007.
For the year ending December 31, 2007, the rate of return for the investments of the Bristol County Retirement System was 7.52%. For the five-year period ending December 31, 2007, the rate of return for the investments of the Bristol County Retirement System averaged 12.35%. For the twenty-three year period ending December 31, 2007, since PERAC began evaluating the returns of the retirement systems, the rate of return on the investments of the Bristol County Retirement System was 10.22%.
http://www.mass.gov/perac/bristol/bristolcountyaudit07.pdf
Would you care to reassess your previous statement or just ignore the facts? Bristol County Retirement has always been assessed as one of the leading plans in the COUNTRY. The fund is only underfunded because cities and towns did not pay their share from the 40's through the late 80's.
With a return rate of 10.22% over the last 23 years the money I have contributed the last 22 years has double 3 times. I am funding my own retirement weather you see it that way or not.
You don't have to agree with me, but please stop throwing out false information, especially when it comes to the stock market and investing.
There has been no 7% average annual return in the last 20 years.
No, It was 10.22%, good thing too or the towns would owe more money to the fund.
As percentages employees have contributed 8.2% of payroll into the retirement system and employers have contributed 3.8 percent of payroll.
Again I point to the fact that the town is exempt from social security tax because of the pension system. We are saving 6.2% of payroll and paying 3.8% of payroll to the retirement system. A savings of 2.4% for the town, NOT and unfunded mandate.
2.4% of 40 million dollars is quite a chunk of money saved.
For the twenty-three year period ending December 31, 2007, since PERAC began evaluating the returns of the retirement systems, the rate of return on the investments of the Bristol County Retirement System was 10.22%.
GREAT post. Even with facts like this there will still be people that make up their own facts to bolster their shortsightedness. Thanks for keeping them honest.
Don't you love how the financial collapse in 2008 is ignored in these insipid responses? The market went from 1600 to 600 for the DJ index did it not? 2009 & 2010 were no great shakes either. What did those years do to the value of these funds? Please update your facts to the reality of today's fund values. You also might want to check the page 1 article in today's S-T about New Bedford's retirement benefits mess. The city of Lawrence would be required to add over $6,000 per homeowner per year to cover their current liability? Paying up to 80% of qualifying year's earnings PLUS benefits is simply not sustainable. Of course, you would not want to lose such a great retirement package. I would not either. However, the reality is exactly 1 state in the union has covered their liabilities. The rest simply cannot afford to pay these exorbitant costs. Of course, throwing the Dartmouth taxpayer under the bus for thousands of dollars per year on new taxes is not your problem is it?
Ignoring the 2008 recession? No problem. Just like saying the 1920s were great economic times LOL. Sure the great depression didn't count.
You also might want to check the page 1 article in today's S-T about New Bedford's retirement benefits mess. The city of Lawrence would be required to add over $6,000 per homeowner per year to cover their current liability?
The article was regarding healthcare liability. Re-read the article!!
The market went from 1600 to 600 for the DJ index did it not?
Absolutely not, the low for 2008 was 7449.38 since then it has gone up and up and up regaining most of the losses in a 2.5 year period.
Wait for the audit results, You will see the BCRS is still above 9% return per year. Then what will your argument be??
Wrong again:
Mar 09 Falls 79.89 to close at 6,547.05, down 53.78% from the all time high on Oct 9, 2007, down 25.37% from the 2009 open
Here is a link to try and help you, although the only help you appear to want is how to get more taxpayer money:
http://www.advisorperspectives.com/newsletters10/pdfs/Massachusetts_Pensions_in_Crisis.pdf
The link highlights key facts that you seem to refuse to acknowledge:
1. By 2009, state pensions were underfunded by $22.1 BILLION.
2. The underfunded teachers pension benefits alone were $13.6 BILLION.
3. Only after July 1, 2001, were NEW hires required to pay 11% of their salaries into the pension fund.
4. Retired teachers earn an average of nearly $36k per year in pension benefits. The average total benfits paid over retirement is over $500k.
These benefits far outstrip what the average worker will get in retirement. So much for a fair days pay for a fair days work.
You said...
Don't you love how the financial collapse in 2008 is ignored in these insipid responses? The market went from 1600 to 600 for the DJ index did it not?
So you were wrong, you quote 09 numbers after stating 2008 collapse. I gave you the low for 08 which was nowhere near 600.
You also said..
These benefits far outstrip what the average worker will get in retirement. So much for a fair days pay for a fair days work.
The average worker does not have 11% plus 2% of their weekly salary taken out of the paycheck to fund their retirement.
7200 dollars per year from a teachers salary goes toward retirement. After 32 years he/she has contributed over 230,000 thousand dollars. Even with modest growth that amount is MORE than enough to pay the benefits earned by the teacher. a 5% return makes the employees share of contributions worth 603,566.73.
During the 32 years the teacher is working the town saves 6.2% SS tax because of the retirement system or roughly 120,000.
Adding the yearly SS contribution and assuming a 5% interest per year (bristol county was double that for the last 23 years) After 32 years of contributions the total is 915,409.54. Almost DOUBLE what is required to pay the 500k you speak of.
How can you not see the math? How can you not understand the ONLY reason the fund is underfunded is because Cities and Towns did not pay their share into the system dating back to the 1940's through 1987?
Post a Comment