Article: Michigan school district feels the pension pinch; comment by Nancy Hamant

Students must pay to play sports and haven’t had new books in 3 years

By Kevin Tibbles
Correspondent
NBC News
Updated: 6:31 p.m. ET Nov. 21, 2005

JENISON, Mich. - The Jenison High School Orchestra may be getting in a festive mood, but financially this Michigan school has hit a sour note. Monday morning, Superintendent Tom Tenbrink broke the news to his staff — the district can no longer afford its share of retiree pensions and benefits.

“If we chose to do nothing, we'll be bankrupt,” says Tenbring. “Next year we run out of money. It could come to a point in the next few years where we won't be able to open our doors.”
What Jenison and hundreds of other communities nationwide are battling is a pension funding sinkhole.

“You have a hole that keeps getting bigger and bigger and no matter what you throw into it, the hole continues to expand,” says says Lawrence Msall, president of The Civic Federation.

And it's swallowing community budgets. Thanks to underfunding, poor investment returns and the growing number of retirees, public sector pension payouts have grown from $81 billion to $121 billion in just four years. Thirty-two percent of cities and towns have cut jobs to keep up with payments.

Student athletes have to pay to play here now. Special needs students have had to give up teacher's aides. Everyone feels the pension pinch. Jenison has cut 33 teacher positions, bumped up class size from 26 to 30 and hasn't purchased textbooks in three years.

As Jen Smith ferries her four sons to school, she doesn't begrudge retirees their benefits but says, “The future does scare me. And what is going to happen?”

Smith worries for a young generation that is already saddled with such a burden to pay.

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From Nancy Hamant:

I think that the national climate is such that it encourages employers to believe that pension contributions are not employers responsibilities.

After the Great Depression in the late 20's and early 30's with hundreds of thousands losing homes and starving on the streets, obtaining their only meals from soup kitchens, the country took on the responsibility for this to never happen again. Social Security was developed. Salary negotiations included set-asides for contributions to pensions.

Now look at the mess we are in today--at every turn of the economy, employers are shirking their negotiated contributions to their employees with little retribution. It seems the current governmental climate encourages rather than halts the lack of paying pension obligations for employees.

I am afraid we will be entering very dismal times for our elderly if these trends continue unabated and the nation's health care system continues to spiral out of control.