Dayton Daily News Editorial: Our View: Ohio teachers need to give in order to get

By Dayton Daily News

Tuesday, January 02, 2007

The Ohio State Teachers Retirement System wants help from local school districts in paying for health-care benefits for its retirees.

Active and retired teachers have a tough sales job. Many communities already are stretched to the limit when it comes to their property taxes — with many taxpayers struggling to find ways to pay for their own retirements and health benefits. What's more, subsidizing benefits for one group of civil servants can have implications for other public employees.

But that's not to say that teachers have no chance. Support for stable retiree health-care benefits may be attainable — but the best strategy would be for teachers to put the full array of pay and benefits on the table and see if there is a better way to restructure the whole package.

Their pension system has offered health insurance coverage since 1971, but it has never had a dedicated source of funding to pay for the coverage. Rather, costs are met by premiums paid by members, and that money is supplemented by subsidies from the pension fund.

A bill was introduced in the Ohio House of Representatives earlier this month that would require teachers to contribute as much as 2.5 percent of their salaries each year toward a special health care fund. But the bill also would require employers — meaning local school districts and colleges and universities whose faculty participate in the system — to also contribute an amount equal to an additional 2.5 percent of teachers' pay.

That's in addition to the 10 percent and the 14 percent of teachers' pay that employees and employers, respectively, now contribute to the pension system.

The retirement system doesn't have to provide health-care benefits to retirees, but it must keep pension payments flowing. In addition to their monthly benefits, retirees are guaranteed 3 percent annual cost-of-living adjustments and partial reimbursement of members' Medicare Part B premiums.

With the approval of its members, the retirement system has been devoting part of employers' pension contributions to support health care. At the same time, it has been scaling back generous subsidies and benefits, raising premiums, eliminating subsidies for family coverage and increasing the length of service a retiree needs to be eligible for benefits.

But without a major cash infusion, the retirement system can't continue funding health benefits for retirees indefinitely.

All but the most affluent communities are sure to look at the proposal as financially impossible. School district budgets and collective-bargaining agreements are pushing local districts to — and, in some cases, past — the financial breaking point.

The Ohio's State Teachers Retirement System and its members need to be more specific. What are they willing to give up in exchange for help on the health care front? Until that question is answered, this legislation shouldn't move forward.