As promised in the last post. Here’s Chainsaw # 2

When I write the book about the Duluth Schools I’ll proofread and edit that. Until then stream of consciousness will have to do.

So some of us on the Board are winking at one another assuring each other that there is no way the Duluth teacher’s retirement fund won’t be integrated into the State TRA. I get less sure of this certainty every day. The problems heaped upon the Fund are immense. Its Board regularly pushed the envelope on retirement pay in good times and was reluctant to bite the bullet when the Stock Market tanked. They got used to the idea that the legislature would bail out their shortfalls. The number of retired teachers getting pensions soared over active teachers paying in. The DFT negotiated successfully for decades inflating the pay of senior teachers so that they could draw their pensions based on their top five highest earning years putting a huge drain on the Pension. All this while the student population in Duluth plummeted to less than half its size twentyfive years ago. Now there are about 8,500 students or a third of the 25,000 when I moved to Duluth in 1974. Then the legislature got the bright idea of pulling Charter school teachers out of of Duluth’s pension stripping it of more paying members. Then the Duluth School Board authorized the Red Plan which caused at least a ten percent exodus of the remaining ISD 709 students to flee to other schools further eroding the number of dues paying teachers.

Right know no one is on the hook to pay these pensions if DFTRA goes bankrupt. The only hope is to fold it and the similarly suffering St. Paul Pension into the statewide TRA. This makes sense because while Duluth has suffered demographic shrinkage the state as a whole has not. There are more teachers than ever paying into the TRA and that would protect Duluth’s retired teachers from their localized demographic shrinkage.

I mentioned a few posts ago that when I made a quick panicked check of our legislative “platform” I didn’t see pension in any of the titles. Instead it was listed under the general title State Surplus. If the local plan is going to get folded into the state teacher’s pension its got to be this year because there will need to be a significant buy in with money that DFTRA does not have. The state has had a good revenue generating year so this is one of the few years that tens of millions are available to make a merger happen. Even so not all teachers want the ailing local pensions added to their burdens. There may come a day when the TRA runs short of money too and other teachers tend to look at the St. Paul and Duluth teacher’s pensions as profligate. That’s fifty cents for spendthrifty.

This ought to be the top priority of our local legislators. We certainly have pull with Senate Majority leader Tom Bakk but Tom is curiously indifferent towards his sliver of Duluth constituents. It ought to be even more of a big deal for Roger Reinert but he’s so focused on Sunday liquor sales that this blimp may not really cross his field of vision. Besides that the DFL is feeling the wrath of Republicans who got blown out in the last election and now want to harp on the massive tax increases the profligate DFL legislators spread over the land. The DFL controlled legislature may not be all that keen on bailing out two regional pension programs in a year when it could cost legislators their seats. To that end its fortunate for Duluth that St. Paul needs in too. They have a lot more legislators. Even the Minneapolis legislators ought to be sympathetic. Their limping pension fund joined the TRA even earlier.

Now this isn’t such a worry for me. Sure our retired teachers could be ruined but its no skin off my nose. Or is it? I wrote a few weeks back that the state school board association was planning to lobby the legislature to give our Duluth School Board the authority either to impose a tax to cover what could be a $60 million shortfall or to ask our voters to cover it in a levy referendum. Let’s see the recently passed extra levy was $1.8 million times five years or if my multiplication is right $9 million. That’s one sixth smaller than the levy authority being asked to cover the pensions. I wonder how that vote would go?

Our retired teachers better start calling Roger and company. I sure as hell wouldn’t impose that tax on Duluth taxpayers without a referendum.

About the author