Pension costs skyrocket in school districts

Written by Ben Allen, General Assignment Reporter | Jun 24, 2014 4:10 AM

(Harrisburg) -- Budgets for midstate school districts are tight because of declines in state funding, but also because of rapidly increasing pension contributions.

Whether the district is Lampeter Strasburg or Lancaster or York Suburban, required contributions to the Public School Employees' Retirement System have skyrocketed, and are still climbing.

In 2009-2010, Camp Hill in Cumberland County put about $183,043 into what's known as PSERS.

In the fiscal year ending this month, it's up to $748,049, an increase of about 300 percent.

"Unfortunately, just because it's anticipated, doesn't make it any easier for us to be able to fund that with our stagnant budgets, our stagnant revenue sources," says Camp Hill School District Business Administrator Christine Hakes.

'The revenue sources that we receive from the local taxpayers and the state are very stable, but they're not growing."

The hikes are similar across the board: Lancaster went from $1,884,496 in 2009 to $6,458,510.50 this year.

It's all a part of a plan to get the pension fund on solid financial ground, yet districts acknowledge the issue is impacting classrooms.

Programs are getting cut, and the trend may continue until the contributions start to level off around 2017.

"We've been doing as much as we can to control costs over the last several decades, really, because state funding for basic educational funding has been so stagnant," says Hakes.

The state Legislature pledges to take on long-term pension issues, but Steve Robinson, spokesperson for the Pennsylvania School Boards Association, says districts are on their own right now.

"In the short term, there's no real proposals out there at the moment that really address the short term issues that districts are facing. That's a much more challenging thing to tackle."

Robinson and others agree any changes to pension plans would likely face a court challenge.

Some districts have tried to cut costs and be creative to avoid cuts, like Lancaster County's Lampeter-Strasburg School District offering naming rights for athletic fields and promotions like mascot appearances.

"When you have this kind of a steep increase in terms of the cost of pensions, with limited tools or avenues for making that up, it certainly is difficult. You can use the Act 1 index, but you can only tax a community so much," says Terry Sweigart, business manager for Lampeter-Strasburg.

And the increases just keep coming: Lancaster will owe $8,453,583 starting in July, about two million dollars higher than this year's bill.

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