The increased pension contribution for teachers that legislators passed last year without so much as a public hearing is causing financial hardship for CEA members. The payroll tax increase, combined with increases in healthcare costs, furlough days, and little or no wage increases mean that many Connecticut teachers are taking home less pay this year than they did last year.
CEA Executive Director Donald Williams today told the legislature’s Finance Committee that “teachers were singled out for the largest per capita tax increase—an average of about $700 per teacher. The dollars collected by the state were not used to offset the state’s unfunded liability in the teacher retirement fund, but rather were used to reduce the state’s contribution to the fund.”
The payroll tax increase from 6 percent to 7 percent is not a 1-percent increase but a 16.6-percent increase in what teachers are required to pay. Teachers do not receive Social Security and are dependent on their retirement fund. Over the years, teachers have always paid their fair share into the teacher retirement plan, but the state has not fully funded or paid its share—creating an unfunded liability that jeopardizes the solvency of the fund.
“Teachers have been paying more than their fair share for decades. They have paid six percent of their salary since 1993—a much greater share toward their pension than in many other states for that length of time,” Williams said.
He urged legislators to pass House Bill 5430, An Act Concerning Teachers’ Retirement System Contributions, and roll back the unfair increase in the teacher payroll tax.
Today’s public hearing took place during the school day, making it difficult for many teachers to attend and make their concerns known to legislators in person. To make sure legislators do understand the impact the teacher tax has had on Connecticut educators, over 450 teachers submitted written testimony to the committee.
Some of the stories of hardship they shared include the following.
- You have literally removed $1,800 from my yearly household operating budget (we are a two- teacher family). With rising costs for all things, and especially high deductible health care costs, this constitutes a big hit.
- My paycheck leaves no extra for my children’s college savings.
- When districts cannot afford classroom books, teachers buy them. When district budgets cannot cover the cost of art supplies, teachers buy them. When kids come to school hungry, teachers provide snacks and food. When kids come to school without coats, teachers buy them. We support kids because we care. It would be wonderful if our state appreciated all that we do and supported us the same way.
- I have already suffered through years of increased insurance costs and 0% to 1% raises. I have been treading water for years, financially; this unfair tax should be repealed.
- I still don’t have enough money to properly rent or own a place of my own, while maintaining loan payments, paying bills, and buying food to eat. I buy notebooks and pencils for my class out of my own pocket. I buy books for my students to promote literacy—books on their level that will also spark their interest—again, out of my own pocket.
- The increase in the teacher payroll tax more than offsets any raise we get, and coupled with our increasing share of health insurance, we are going backwards.
Teachers James Tierinni from Manchester and Matt Macaluso from Somers were able to attend the hearing and testify in person.
“Teachers are middle class employees and this is a huge tax on middle class families,” Tierinni said. He added that many teachers in his school are already working a second job just to make ends meet.
Macaluso said that his additional $800 contribution equals the cost of a month of groceries for his family of four. “The Connecticut legislature broke the piggy bank in the form of years of underfunding the Teachers’ Retirement Fund,” he said. “Now teachers are expected to glue it back together.”
“The state’s budget woes should not fall squarely on the backs of public school educators, nor should teachers be penalized for the state’s mistakes,” Williams concluded. “There is a better, fairer way to address the state’s unfunded liability for Teacher Retirement. It is not to unfairly tax teachers more, but rather to meet the state’s obligation in a way discussed by the Teacher Pension Viability Commission—placing the State Lottery into the retirement fund, or finding other sustainable revenue streams to ensure the fund is solvent for decades to come.”
Watch Williams explain how the State Lottery could be used to reduce the state’s unfunded liability for teacher retirement.