Employer contribution increased by 5% starting next October.
http://kingfish1935.blogspot.com/2022/12/the-pers-coals-are-gonna-cost.html
http://kingfish1935.blogspot.com/2022/12/the-pers-coals-are-gonna-cost.html
The impact to school systems and their finances has to be bad news for education, right? The money has to come from somewhere.This has been coming for a long time. It’s still just a band aid. The system will go under unless the rate benefits accrue is extended.
the money will come from your pocket. in the form of higher property taxes (ad valorem for schools). it won't cost the schools, municipalities, or counties anything.The impact to school systems and their finances has to be bad news for education, right? The money has to come from somewhere.
That was my assumption/fear, but how quickly can they raise those? i.e. is there a time period where the schools system will owe before new taxes kick in? I really need a remedial course in local government operations...the money will come from your pocket. in the form of higher property taxes (ad valorem for schools). it won't cost the schools, municipalities. counties anything.
each year the districts can put in their request (it's not really a request, because the boards of supervisors can't legally deny it) for ad valorem rates. So, once per year. municipalities and counties also set rates once per year, based on budget. that increase in contribution will be budgeted in next June, for the fiscal '24 budget, unless they got guidance this year that the contribution was increasing, and put it in their '23 budgets. that could very well have been the caseThat was my assumption/fear, but how quickly can they raise those? i.e. is there a time period where the schools system will owe before new taxes kick in? I really need a remedial course in local government operations...
They usually do.Why don’t they raise the rates the employees pay too? The federal government did that and it seems to be working.
Absolutely nothing of substance will be tackled in the ‘23 session. But I do expect serious proposals to be “introduced” by way of discussion with legislators during the ‘23 session with an eye toward rolling out potential alleged fixes during the ‘24 session.Employer contribution increased by 5% starting next October.
http://kingfish1935.blogspot.com/2022/12/the-pers-coals-are-gonna-cost.html
Not this time. Let’s just say that this intractable issue has the full attention of “upper management.” And beginning in ‘24, the particular “upper management” of which I am typing will no longer be burdened with worrying as much about the next election cycle.@Shmuley —So not just election year buck-passing going on then?
Or get rid of the 75% who do nothing.It's debt piled on top of debt. We're borrowing to pay retirement (essentially deferred salary) to government employees for whom we borrowed to give a salary in the first place.
Governments should be required to eliminate defined benefit pensions for all new employees.
I expect a lot of that will be done through attrition. I mentioned earlier that I know many folks who’ve recently retired or plan to in the near future from their PERS jobs.Or get rid of the 75% who do nothing.
But they’ll hire two people for to take their place. The first will be some supervisor’s side chick and the other will be hired to do some of the work the retiree was doing or supposedly doing.I expect a lot of that will be done through attrition. I mentioned earlier that I know many folks who’ve recently retired or plan to in the near future from their PERS jobs.
"Seems". Yea, Got it.Why don’t they raise the rates the employees pay too? The federal government did that and it seems to be working.
All anyone has to do is look at the most recent audited financial statement for any school district, municipality, county, or state agency. Each and everyone of them, with perhaps a few outliers, will have a government wide balance sheet with a negative "net position" - or liabilities that exceed assets. In almost every instance, the deficit is because of the pension and other post-retirement benefit liabilities. The deficits are substantial and when you sit down and think about it, you can see that all of it will not be paid without big changes in how the pensions are funded. The statement that many local officials were "blindsided" is predictable and probably accurate. It is also symptomatic of the problem. You don't need a report like this from the actuary to be clued in that the long-term pension liabilities are not sustainable. In many cases, the issue does not get much attention unless it impacts the government's annual budget - like Jackson being faced with a $3,000,000 increase in the required contribution.That was my assumption/fear, but how quickly can they raise those? i.e. is there a time period where the schools system will owe before new taxes kick in? I really need a remedial course in local government operations...
Yeah, Boomers are retiring but it’ll still be an issue in part because many Gen X folks can also retire at 25 years.Also, tons of boomers are retiring. They are a huge segment of the population. Not to be morbid, but in 20-25 years this won’t be an issue.
Bless your heart, you think you can do something about the machineState elections are in less than a year. The qualifying deadline is February 1.
Run for something and do something about it!
What patdog said.
Many folks where I work have retired over the past 2+ years and I know others who will be in the next few months (the younger boomers will be 59 next year and a Gen X friend my age retired earlier this year).
seems like boomers can’t balance a budget sheet. Hmm. Just another issue boomers created and my generation will have to suffer for.
I find it fascinating that some people can have such different mindsets on these types of things. I wonder why two people can look at the same situation but view it so differently. I’m not saying you are wrong, maybe what you’re saying is the best way. Serious question, do you take this approach with your personal finances? Do you carry a balance on your credit card(s) or do you pay it off each month? Do you pay your entire utility bill or just enough to not get cut off?It absolutely can be kicked down the road. $1.35 Trillion sounds like a ton, but is not anywhere near an insurmountable amount for the US of A, especially over 50 years, and double especially if you're only spending enough to kick the can. Raise contributions a bit, hit the newbies up, hit the state and fed taxpayers up a bit....spreading it around like that, it's not a big deal.
Hell, watch the Feds create special tax and interest free loans to the states to shore up the gap. Instant can kick. An extra half a trillion or so to our national debt means next to nothing.
They got $600 million coming their way. When I lived in Jackson, I was talking to a friend of mine (maybe 2015?) who still lives there. We were discussing the water problems and Jackson's ability to provide basic services (good roads, water, etc). He told me what will eventually happen is the federal government will fix it. They won't let a state capital fail. And that's precisely what is happening.Don’t look to the Jackson water system for answers but they were are kicking the same problem without any real vision.
They were gonna give that money to somebody. I'm glad it's being spent in Mississippi. But Chokwe, his posse, and "consultants" are laughing their way to the bank. I bet at least a third of it gets pilfered, if not more.They got $600 million coming their way. When I lived in Jackson, I was talking to a friend of mine (maybe 2015?) who still lives there. We were discussing the water problems and Jackson's ability to provide basic services (good roads, water, etc). He told me what will eventually happen is the federal government will fix it. They won't let a state capital fail. And that's precisely what is happening.
When they changed eligibility to allow full retirement at 25 years, they doomed the system. Full retirement should be 40 years. 1.5% per year.Yeah, Boomers are retiring but it’ll still be an issue in part because many Gen X folks can also retire at 25 years.
That Kingfish article includes a chart about funding in 2047.
They can but at some point it's not a benefit but just forced savings. Right now between what the employee puts in and what the employer puts in, plus all the money put in on behalf of employees that don't vest, they are collecting plenty to fund the benefits that are accruing. The problem is that money is being collected to pay for benefits accrued in the past.Why don’t they raise the rates the employees pay too? The federal government did that and it seems to be working.