Saturday, February 20, 2010

Not Simple, Not Fair, and Not a Good Idea

Jane Anne Morrison gets bamboozled by another version of the hard-line far-right vision of our state as one in which we cut MORE from education and balance the budget through taxes ONLY on teachers.

She proposes that the state cut its share of the contribution to our personal retirement accounts.

Most NSHE faculty who have been hired in the last 20 years are not in PERS but instead have only personal retirement accounts. State law requires us to divert 11.25% of our salary into these accounts, and the state pays another 11.25%. At the time of retirement, we get only what is in those accounts, no other pension. These percentages are based on the amounts that are used for state employee contributions to PERS, who get a percentage of their final salary as a pension upon retirement.

Our contribution percentages are in turn based on actuarial calculations of the cost of the PERS retirement pension that other state workers get, amortized over 30 years (the amount one has to work over to qualify for a full pension). So to make the "simple" change that Ms Morrison proposes, the state legislature would have to change the amortization tables for PERS as well -- ie would have to cut PERS pensions as well.

Thats the real agenda of this "simple" idea -- to cut public service worker pensions, including classified staff, teachers, police, firemen, and others.

Or, if it didn't make that change to PERS and only to us, it would mean Higher Ed faculty would be the ONLY state workers not to get any pension contribution from our employer. It would mean the equivalent of an 11.25% cut in salary ABOVE AND BEYOND the 4.6% cut we've already taken (in real dollars or more work) and the 1.75% cut that is likely to be implemented at the special session. That means the state would be balancing its budget with "no new taxes" except a 16.6% cut in compensation for Higher Ed teachers.

IS this simple? Is this fair?

Keep in mind that according to the AAUP annual survey on Higher Ed compensation, Nevada faculty get benefits equivalent to only 21% of our total compensation, versus a national average of 27%.

Why is this? Because we don't get any payments made into social security, which the state as our employer is allowed to do ...because we get a different form of retirement compensation. So in short, under federal rules, the state would probably have to start to pay social security taxes for us, and we'd have to start to pay social security taxes on our income as well.

Is this simple? Is this fair? Is this going to save the state money?

Apparently, Assemblyman Joe Hardy, who represents parts of Clark County, thinks so. He told Jane Ann Morrison he's going to raise this idea at the Interim Finance Commmittee hearing on Monday.

Let Assemblyman Hardy know at this email why this idea is neither simple nor fair and won't save the state money.

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