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Wayne Independent - Honesdale, PA
  • Retirement system woes discussed

  • How to handle a teacher's retirement system that continues to grow was part of the discussion Tuesday night during the monthly Wayne Highlands School Board committee meeting.
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  • — How to handle a teacher's retirement system that continues to grow was part of the discussion Tuesday night during the monthly Wayne Highlands School Board committee meeting.
    During the discussion, Superintendent Greg Frigoletto said the district had a good budget year, mainly because of a mild winter. Major savings were in utilities and snow removal.
    He said there was a "positive variance" in the actual expenditures as compared to the actual budget. That means there was a surplus.
    The amount is $914,000, though Frigoletto said that is still "close" in the world of budgets.
    At issues, said Frigoletto, is how the district wants to "commit" those funds.
    The superintendent said it is his recommendation that the money be put toward the Pennsylvania Public Schools Employment Retirement System (PSRES).
    Frigoletto also said because there is an additional $70,000 in reserve funding which can be used, he feels that should be committed to the PSRES fund. Even with that, he said the school will be able to have sufficient reserves to meet the 8 percent of total budget requirement by the state.
    "This is the single largest problem in school systems," said Jeff Firmstone, business manager for the district. "There is no local control. It is a state mandated program."
    Firmstone called the retirement program a "significant challenge" for the "district and the taxpayers."
    Board member Lothar Holbert said even with the district being able to commit funds regularly to offset the major increases, it's still not going to be enough.
    "Three years down the road, we're going to have to cut programs or raise taxes or both," said Holbert.
    As for committing the funds as proposed by Frigoletto, Holbert said, "It's going to help but it's not going to solve the problem."
    Firmstone said officials in Harrisburg are "very good at kicking the can down the road."
    Firmstone also pointed out a couple of interesting points about Harrisburg officials.
    He noted that the state "shares in the cost" of the retirement program so "they have skin in the game."
    Page 2 of 2 - However, he also said a problem they face is most Harrisburg officials, including the elected lawmakers, "have a more lucrative retirement program" than the teachers.
    "That all of a sudden slows them down when you are talking about their own pockets."
    That, he said, means the process is likely to drag on for a long time with no solutions being handed down from the state.
    "We are at the mercy of the state," said Firmstone.
    Holbert said it is "really gloomy" and said the board and taxpayers can "anticipate having to struggle because there is less funding."
    Firmstone pointed out how the funding is actually working.
    He said that Gov. Tom Corbett is "right" in the respect of saying the state is sending more money for education.
    However, Firmstone said what is deceptive is that all of those funds are going toward the teacher's retirement system and not into classroom programs.
    He also noted the retirement program is state-mandated, meaning the state is sending funds to cover its own program but even those are coming up short.
    It's also a fact that less money is going toward actual educational programs, said Firmstone. That percentage has dropped dramatically over the last couple of decades and he says it's directly related to the increasing demands of the retirement program.
    In all, Holbert pointed out that over the next two years, the district will have to commit an additional $1 million to that fund in order to meet state requirements.
    The final decision on whether or not to commit the funds from the budget overage this year will be at the next school board meeting.
    That meeting will be held on Monday of next week at Preston School. That is a change from the regular Tuesday meeting dates of the board.
    The meeting in Preston will be at 7:30 p.m.
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