This blog has repeatedly pointed out that local school systems have been required to take on most of the burden of the Unfunded Accrued Liability (UAL) of the teacher and school employees retirement systems in recent years. This is a problem that has been caused by the legislature, not by school boards. The legislature in past years has often approved benefits to groups and individuals that were not properly funded by the legislature. This practice has caused the growth of the unfunded accrued liability. That is the future cost that must be paid out to retirees that was not fully funded by the contributions that have been made to the retirement systems. To resolve the problem, the legislature has mandated that local school boards must each year pay a portion of the cost to erase this unfunded liability by the year 2029. To make matters worse, the legislature has exempted charter schools (which are also supposed to be public schools) from participating in the retirement systems and making their share of the payments to retire the UAL. This puts a greater and greater burden on our elected school boards, but gives the charters a free ride. Last year, the payments to the unfunded accrued liability amounted to more than 25% of payroll. Since payroll is more than 80% of each school board budget, you can see what a big chunk is being taken out the real public school budgets.
In addition to the UAL, school boards have been hit with increased costs of group insurance, and more mandated costs in special education services. As part of preparation for the PARCC testing school boards have been forced to add computers and upgraded internet access. The new tests were supposed to eventually be administered totally online. Special education is another service often not fully provided by charter schools. Often parents of students with disabilities have been counseled by charter school administrators to send their children to the real public schools that cannot refuse to serve such students. This again has placed a bigger burden on the real public schools. A lawsuit was recently decided in favor of parents in the 100% charter operated RSD that claimed that the children of that system were not being provided adequate special education services.
The new MFP approved by BESE would have added 36 million dollars to help pay the extra costs that have been mandated to local school boards over recent years. Another portion of the growth of the MFP was dedicated to projected increases in student enrollments.
At some point, within the next week, the entire Senate will be voting on the state budget which should include the MFP. If the new MFP is not approved, the funding will remain the same as last year. This will unfairly place all these increases in mandated costs on our local school boards.