Lima News: Put an end to double dipping

From John Curry, June 27, 2010

The Lima News [editorial], June 27, 2010

'Savings' from rehiring retired school employees costs taxpayers more

Several ways have been proposed to address the problems that come with “retire-rehire.” Those proposals all have merit, but the only real solution is to disallow the practice entirely.

How the retirement system for teachers works doesn’t usually interest most people. However, the State Teachers Retirement System is $40 billion in the red, and those running it want a taxpayer bailout. Lawmakers already are likely to take more of your money to close the $8 billion hole in the state budget, and now they’re being hit up for another $40 billion?

Investment losses and the growing number of educators who are collecting retirement for longer periods have led to the dilemma. Little can be done about past investment losses. But addressing the practice of rehiring administrators and teachers is a must.

More than 25 percent of Ohio’s 614 school districts have superintendents who are collecting full retirement benefits, The Columbus Dispatch reported last week. The State Teachers Retirement System has more working retirees than any other state system. Ohio again leads the nation in soaking taxpayers.

Advocates call the practice “retire-rehire.” Critics call it “double-dipping.”

Whatever you call it, districts save money by rehiring superintendents (or teachers) at a lower wage. Educators come back — often without ever leaving — for less pay because they are getting full-time retirement benefits. But educators who retire early no longer contribute to the State Teachers Retirement System, yet they pull millions from the fund. And the system has $40 billion in unfunded liabilities its leadership wants Ohio taxpayers to pick up.

Remember that state and local taxpayers already contribute the money that pays local administrators and teachers as well as the generous amount of money districts contribute to their retirement fund. Taxpayers shouldn’t have to give any more to this fund.

Lawmakers and the State Teachers Retirement System itself have offered three Band-Aids in recent years to an ever-gaping fiscal wound.

The State Teachers Retirement System proposes requiring public employees work at least 35 years or to age 60 with 30 years of service, or they’d face significant benefit cuts. It also wants to reduce a cost-of-living adjustment from 3 percent to 2 percent.

State Rep. Bruce Goodwin, R-Defiance, and then-Rep. Michelle Schneider,

R-Madeira, introduced separate bills in 2007 that, respectively, make double dippers take 40 percent pay cuts and wait six months before returning to work. The Legislative Service Committee could not determine with either bill whether double dipping costs taxpayers any money.

It should be clear now that they could cost Ohio taxpayers $40 billion. That is unacceptable. The solution is to stop the practice of rehiring retired employees. We understand districts want to save money, and it’s legal to do, but taxpayers once again are going to be on the hook for this mess. Lawmakers should see to it that this no longer can happen.