Pennsylvania Teachers Pension Fund Crisis Escalates

AUDIT  FACTS  FOR  NORTHWESTERN  LEHIGH SCHOOL  DISTRICT

PENSION SYSTEM NEEDS REFORM NOW

  

The Northwestern Lehigh School District Board received the auditor's report at its monthly meeting last night.  The good news is that everything came up as adhering to acceptable accounting standards without any major errors or deficiencies. This deserves recognition for a job well done by the competent members of the business administration.

Total revenues from local, state, and federal	$38,515,322
Total expenditures	$36,370,108
Surplus 2014-2015	$1,645,214
Total assets: buildings, furniture, cash, etc.	$94,777,864
Total liabilities Bond debt Pension debt Other debt	$46,217,832 $50,329,108 $997,905
Total debt	$97,544,845
Net assets	(-$2,766,981)

The total debt is now 250% of income; in the private sector this would require bankruptcy.

The big item in the overall audit is the $50,329,108 pension liability apportioned to this school district. This is an increase of $1,212,986 from the previous year. In the 6 months, since the end of the fiscal year, this liability has increased to $51,190,653 - an increase of $861,545 in 6 months. While half of this amount is to be reimbursed by the state, it is the school district is responsible for this liability. The percentage of the teachers' salaries that is to be contributed to the pension by the school district is now 30.03%

This is an unsustainable situation. The return on the pension fund investments has averaged 50% of the return required to be viable. With the downturn in the stock market, this situation may explode to literally bankrupt every school district in the state. The intransigence of the school teachers union to embrace any reforms to this out-of-control pension system will not end well for them or for the taypayers.