Category Archives: KPERS

Wrap-up of the Legislative Session

KSDE has gone into podcasting.

On the KSDE home page, selecting News and then Podcasts will take you to some audio (and video) files from Dale Dennis (Interim Commissioner) and Veryl Peter (Director of School Finance). Look for the files “Legislative Update.”

The most recent update was recorded on May 2. In it, Dennis (with a few comments from Peter along the way) reviews the most significant legislation of the past legislative session. The roughly 25 minute presentation is divided into five segment.

We’re not sure whether these files can actually be used on an iPod or not. We were unable to import them into the iTunes software. You can hear (and see)  the files in the Windows Media player, which comes standard on many computers.

Here are some notes of the presentation.  Most of it is composed of paraphrases rather than direct quotes.

Part 1:

Increase of base aid per pupil

Increase in the weighting of at-risk students

Threshold for getting high-enrollment weighting has gone down

SB 68

Funds non-proficiency at-risk students, and says states must have an anti-bullying policy.

“Highly encourages” character education in all grades. “Gets close” to a mandate.

 

Part 2:

Update your crisis plan.

 
SB 95: No more juvenile detention facilities, but instead ‘psychiatric treatment facilities.” No other change.

SB 109: Lets districts pay new hires before schools open, as long as they are working.

SB 129: Schools must notify law enforcement of any student suspensions or expulsions. Law enforcement will notify drivers services, which will pull drivers licenses of offending students.

All day K:

Governor proposed 5-year phase in. “Everybody thinks all-day kindergarten is a great deal, unfortunately this year the money ran out.” It will not be implemented.

SB 362 KPERS: Lets non-school government employees sing up right away and not wait for a year. (School employees already had this.) Has a 5-year vesting provision. Multiplier .175 is the same. You can use a 3-year average for determining benefits. Now changed to a 5-year average for any who start after July 1, 2009. Normal retirement age is 65 +5 of services or 60 years old with 30 years of service

Part 3

Adds 2 percent COLA for 65+. Employee contribution is now 4 percent. Now, it will be (for 2009 hires) 6 percent contribution. Rate will match what the state contribution is in the future. There is also a $300, one time payment for people who retired in prior to July 1, 1997.

Unfunded liability of KPERS is a problem. Through 2033, this bill will save the state $2.6 billion, at least half of the unfunded liability will be addressed this way.

SB 2185

Covers 5 teacher scholarship programs, especially noteworthy for loan cancellation.

Other:

Idea to hold a second student count during the school year did not pass.

SB 2310

Local option budget is at 31 percent max. You have to have an election to use this. If you have a declining enrollment or COLA levy last year, you may continue what you had last year. This affects only a few districts.

Part 4

Most districts have to have an election to go from 30 percent to 31 percent LOB. They don’t think that having an election is worth the trouble for that one percent.

SB 2368

More about LOB. Allows a district to go to 32 percent with an election. Also: $400,000 for an after-school program, requires local match, 2-hour program, and a summer program. No school can get ore than $25,000 from the state

Teacher mentoring: $1,000 per teachers to serve as mentors to year-one teachers. Includes $500 for mentoring a second-year teacher.

Special ed: Still working on how much supplementary fund districts will get. 

Part 5

Go after every dollar of Medicaid that you can (Medicaid). Funding could go up to $26,500 for special ed. “That isn’t too bad.”

We’ve seen a lot of post audit activity. Recruitment and retention report: not much new. There will be a problem; 33 percent are 50+, 25 percent will be eligible for KPERS in 5 years.

Virtual schools: said we are lax and need to follow the original plan for monitoring. Districts may not give virtual school students to other districts. We will go back to original guidelines within 10 years. The rules were there but we did not monitor them.

There will be a charter school out in the next week to ten days.

An early childhood ed audit is underway.

There will be another audit for voc ed. The focus will be on the cost of individual programs.

KPERS in Deep Trouble

While questions about curriculum dominate the debate over education–when they aren’t overshadowed by lawsuits about state aid to schools–there’s a problem threatening the financial health of Kansas. As the LJW says, “The Kansas Public Employees Retirement System needs large infusions of cash.”

How big is KPERS? Big. “It has assets of $12.2 billion, which it invests. That amount is more than state government’s annual spending budget. KPERS has 250,000 active, inactive and retired members, who represent nearly 1 in 10 Kansans.”

Like government pension funds around the country , KPERS faced unfunded liabilities: promised benefits that, using current standards of accounting, it is unable to pay. Usually unfunded liabilities come about when politicians try to pacify two competing groups: public employee unions, and taxpayers. They promise outsized benefits to please state workers, but minimize government contributions to please taxpayers–or a special interest group that might benefit from the cash that might have gone to the pension.

The unfunded actuarial liability grew 10 percent from just 2004 to 2005. In 2005, it stood at $5.1 billion. That’s money that’s going to come either out of the wallets of taxpayers or from the retirement checks of state workers.

Why is this a concern for the Kansas Education blog? Because $3.5 billion of that unfunded liability is due to the school system. The gap between what is put in and what should be put in, by actuarial standards, is $110 million per year for KPERS; $100 million of that is for school employees.

To quote again from the LJW: “The school system came into KPERS with no assets,” said Glenn Deck, executive director of KPERS. “And the contributions have not been at the proper rate for a number of years.”
Clearly, what is needed across the country–and what some states have moved to–is a defined contribution system, much like a 401k. It’s going to be a hard sell, but the move is good for taxpayers and for many government employees, who gain the ability to say how their funds will be invested, and how much will be invested.

The KNEA, as you might expect, says “don’t blame us. Send us more money.” The union’s legislative director says “The argument shouldn’t be ‘Those teachers are going to drive us bankrupt. Instead it’s the failure of Legislature in the past to take care of the system appropriately.”

The LWJ world notes that the state has already floated $500 million in pension obligation funds–in effect, taking out long-term loans to deal with poor policy choices of the past.