December 14, 2004
East Valley educators bracing for another large increase in their state retirement contributions don’t like the math.
Faced with a sluggish market, managers of the Arizona State Retirement System are raising the contribution rate of teachers and other government workers from 5.7 percent to 8.25 percent of their salaries in fiscal 2005-06.
That means teachers earning $30,000 this year who receive a 2 percent pay increase to $30,600 in fiscal 2005-06 will actually bring home less money. And that’s before they account for inflation.
Overall, the retirement contribution of a teacher earning $30,000 will jump to $2,475 next year from $1,710 this year — an increase of $765.
"I’m scared of that this year, I really am," said Faith Risolo, president of the Mesa chapter of the Arizona Education Association. "None of us went into this profession to be rich. But we also don’t need to become impoverished."
School districts and many charter schools also will take a hit because the retirement system requires participating employers match employee contributions dollar-for-dollar.
In the Mesa Unified School District, the rate change will mean a $6 million increase in the district’s contribution to the system. The Scottsdale and Gilbert unified school districts will each pay about $2 million more.
"Everybody knows there’s a storm coming, and they know the storm will do some damage," said Chuck Essigs, director of government relations for the Arizona Association of School Business Officials.
He said schools and their employees faced a similar retirement system increase two years ago, and many school districts had to adjust their budgets to help pay for the employees’ increase and the district’s matching contributions.
Anticipation of repeating the process next year leaves some school districts wondering where they will find the money. Some hope the state Legislature will consider reimbursing the education system for the added expense.
Amy Besing, legislative liaison for the Scottsdale Parent Council, sent parents a notice this semester informing them of the retirement system increase and urging them to get involved in a lobbying effort at the Capitol to help schools cover the cost.
Clyde Dangerfield, director of business service for the Gilbert Unified School District, said his district will be left scrambling if the Legislature doesn’t come through.
"My hope is that the state will kick in a little bit more money to try to buffer this thing," Dangerfield said. "If they don’t, we’ve got to seriously look at the budget."