ROCHESTER, N.Y. — For three straight years, New York School Districts have seen a decrease in the percentage of their payroll expected to pay into the state teachers' retirement system thanks to generally favorable returns on investments.
"They've benefitted from having those reductions, but again, I think in their planning, they were not anticipating that we would see this magnitude of an increase this year," Robert Lowry, State Council of Superintendents deputy director, said.
Based on predictions that the stock market won't maintain its current level, the system is expecting to increase next year's rate from 9.8 percent to as much as 11 percent.
"A one point increase is like absorbing a cost equivalent of giving those employees a one percent raise even if you didn't give them a raise, so it's a significant cost," Lowry said.
It's particularly unwelcome news for large, impoverished districts like the city of Rochester.
"Our district is already facing a potential large deficit for next year," Rochester Teachers Association President Adam Urbanski said.
The Rochester Teachers Association said it’s important the pension system remain solvent, but they recognize the increase could mean cuts to non-mandated programs like music, art and physical education.
"Those are the casualties when money gets very tight and districts have to reduce programs or they have to increase class sizes," Urbanski said. "So it's an agonizing exercise."
Meanwhile, many districts are already concerned about how much funding the state will contribute to education in the upcoming budget, itself facing a deficit.
"We respect that the state has a lot of uncertainty about its budget situation, chiefly because of what's happening in Washington, but our job is to explain the needs of schools and the financial challenges," Lowry said.
The State Council of Superintendents said the pension issue will be part of the discussion. The retirement system, in a memo this month, said it will have more a precise estimate in February.