As previously reported, the House and Senate have both adopted a shift of teacher pensions as a part of their FY 2013 budget plan.  The Senate plan shifts the costs over four-years, $68.3 million in FY 2013 growing to $254.8 million in FY 2016.  The House plan shifts the costs over three, $137 million in FY 2013 growing to $261 million in FY 2015.  Both plans base the shift on the “normal” costs of the system (the costs of retirement for active employees, which does not include unfunded, accrued liabilities) and require the counties to make concurrent county-paid maintenance of effort increases.  Both plans also includes a number of offsets to mitigate the costs during the phase-in periods.

Both plans include the following offsets:

• Applies the recordation tax to indemnity mortgages
• Forgives repayment of the local income tax reserve fund
• Restores local police aid beginning in FY 2014
• Restores inflationary increases for local health departments beginning in FY 2014

Differences in offsets are as follows:

• Senate plan provides $22.6 million through the disparity grant – House plan provides $28 million through the Teachers’ Retirement Supplemental Grant
• House plan phases out exemptions for those with incomes over $100,000 and eliminates exemptions from those with incomes over $150,000 generating $31 million in revenue for local governments – Senate plan increases the income tax rates generating no local revenues
• Senate plan provides $37 million federal fund reimbursement relief to school boards beginning in the first year of the shift – House plan provides the relief beginning in the third year

The House and Senate summary documents provide the effects of the pension shift and offsets by county.

Senate plan and county effects

House plan and county effects