This commentary is by Stephen C. Walke Jr. of Montpelier.
The state of Vermont should honor its obligation to fully fund its teachers’ retirement system. It is simply not fair to place the burden on our educators.
We all know the many reasons why. First among them is that the state is responsible for the trust fund being near bankruptcy while teachers have fully met their obligations. During the 29-year period starting in 1979 and ending in 2007, the General Assembly appropriated the amount of money recommended by its actuaries for teacher pensions in only four of those years, less than 14%. In one year, 1996, only 38.41% was paid.
Apparently, voodoo economic theory was prevalent then.
Moreover, the promise of a pension at the end of a long career is what attracts many teachers to education and keeps them teaching when they could earn more in a different occupation. It will be difficult to retain and recruit teachers when they are required to work more years for a lower pension under the proposal proposed last month in the House of Representatives — and then dropped.
We have learned during this pandemic that teachers are necessary to the proper functioning of our economy. When kids are in school, their parents are able to work.
Many teachers taught during the past year under very difficult conditions occasioned by the Covid pandemic; they should be applauded, not penalized.
We all need a vibrant education system. We have one now and shouldn’t mess around with the lives of the people who teach our children.
There is an obvious solution. The state should issue bonds to pay its obligation to the pension fund. The naysayers say that the increased debt will hurt the state’s bond rating. This doesn’t make sense.
Whether the approximately $1.5 billion owed appears on the state’s balance sheet as obligations backed by the full faith and credit of the state — that is, bonds — or as a pension fund liability, the state’s fiscal position is the same. It’s the same for us individuals — $5,000 of mortgage debt is the same as $5,000 of credit card debt; we’ve got to pay both off. Increasing a mortgage to pay off credit card debt simply changes the nature of the debt; one still owes a total of $10,000.
The agencies that assess the bond rating of our state should credit the fact that we are taking appropriate action to address this problem in a reasonable, prudent manner when we issue bonds to pay our debt to the teachers’ retirement system.
As a matter of full disclosure, I am the very proud father of an extremely dedicated middle school teacher who is Vermont’s 2020 Teacher of the Year. It has given me a unique opportunity to observe the hard work she and her colleagues expend on behalf of our children. We should keep her and her colleagues doing what they do best.
