State program too successful, will be eliminated

Say a thing often enough and the people will believe it.

That was the credo of What's-His-Name Goebbels, minister of propaganda for the Third Reich, and it seems to have finally reached a critical mass of effectiveness as the operating strategy of lawmakers who have wanted to eliminate the Teachers and Employees Retention Incentive since its inception.

Reporter Adam Beam, writing for The State recently, illustrated the principle in his opening lines:

The TERI program is likely dead.

What started out as an incentive to persuade quality teachers to stay in the classroom has ballooned into a symbol of government waste and greed.

A symbol of waste and greed?

Let's review.

It was designed to keep educators in the classroom, to head off a teacher shortage. It accomplished that goal.

Indeed, in accomplishing that goal, it also improved the state's average teacher salary, because our lawmakers like to include every remotely applicable penny in that equation rather than focus on improving the base contract salary alone.

So it was overtly and covertly successful at achieving two legislative goals. I'd hardly call that a symbol of waste and greed.

If we want to find symbols of waste and greed, we might reflect upon an effort made back in 2003-04 to move $700,000 through the Department of Parks, Recreation and Tourism to rebuild a stadium at the Citadel, so that ESPN might be disposed to sign a contract to broadcast a "Palmetto Bowl" live from that location. This, after the Citadel had already raised $5 million in private funds to accomplish its goal.

Nonetheless, Beam continues,

Since its inception in 2000, the TERI program has been the target of at least a dozen bills to kill it and one lawsuit that went all the way to the state Supreme Court.

But now, with the state retirement system’s deficit at $14 billion and climbing, lawmakers are rallying to end the program. A bill has already passed the House that would eliminate TERI for new hires. And four of the six senators on a subcommittee crafting retirement legislation — two Democrats and two Republicans — say they want to close the TERI program.

“In retrospect, I think we made a little bit of a mistake,” when lawmakers approved TERI, said Sen. Phil Leventis, D-Sumter, a member of the Senate retirement subcommittee.

But supporters say the TERI program makes the state money and gives people a reason to work in state government when they could have a higher salary in the private sector.

“If the goal here is to make a political statement and be punitive to employees then the goal is accomplished,” said Carlton Washington, executive director of the South Carolina State Employee Association. “If the goal is to take care of our most sacred resources, state employees, then I wouldn’t think that eliminating the TERI plan would be the way to go.”

TERI — which stands for Teacher and Employee Retention Incentive — allows state workers to retire but continue working for up to five years. They earn their full salary and their full retirement benefits at the same time. Their benefits are held in trust by the state, earning interest. When the five years are up, the state worker gets his or her benefits in a lump sum, minus the interest.

TERI started in 2000, when the state had a teacher shortage of 6,000. Lawmakers envisioned TERI as a way to keep quality teachers in the classroom for an extra five years.

But critics say that’s not what happened. Instead of keeping employees longer, it encouraged them to retire earlier than they would have. In the first year of TERI’s existence, state agencies were flooded with retirement requests and had to pay out an unexpected $16 million in unused sick and vacation days.

“Anything that gives people an incentive to draw retirement earlier puts stress on the retirement system,” Leventis said.

The program has worked for retaining teachers, according to Beth Phibbs, director of governmental affairs for the South Carolina Association of School Administrators. But because teachers are on the same system as state and local government workers, it has to be made available to everyone — which only compounds the problem.

TERI had financial problems at the start. Once employees entered the TERI program, they kept their salaries but stopped contributing to the retirement system. Having more people taking money from the system without contributing to the system contributed to the system’s growing deficit.

In 2005, lawmakers fixed that by requiring TERI employees to contribute to the system. Now, when employees enters the TERI program, they pay 6.5 percent of their salaries into the system without earning more service credit. They also earn interest on their retirement benefit checks, which stays with the state. (Last year, the state kept $28 million in interest from TERI accounts).

That last note would suggest that TERI has been a money-maker for the state, not a drain on resources.

“The retirement system has two sources of revenue for which the employee gets nothing, and so that is a net addition to the retirement system,” said Rep. B.R. Skelton, a former Clemson economics professor who is a strong supporter of the TERI program.

But the interest and the contribution are not enough to cancel out the retirement benefit the system has to pay the employee, said David Avant, managing legal counsel for the state retirement system.

“It mitigates the cost of TERI, but it doesn’t undo it,” he said.

Ah, the penny-pinchers weigh in and conclude that it is, indeed, a money-maker, but it's not worth paying retirees any greater benefits to keep the program in place. If retirees are winning a little, it's not worth the effort.

It’s unclear how much money TERI, on its own, has cost the system. An analysis by the South Carolina Retirement System found that the TERI program, along with reducing the retirement eligibility to 28 years from 30 years, added $2 billion to the deficit.

Still, most critics complain not that TERI costs too much, but that it is unfair. They view someone being able to earn a retirement benefit while continuing to work as “double dipping” with tax dollars — something most private sector workers cannot do.

I just think sometimes these folks don’t understand what it is like in the private marketplace right now,” said Don Weaver, president of the South Carolina Association of Taxpayers. “These folks still have a very, very good pension where a lot of folks don’t even have a pension today.”

Even Sen. Darrell Jackson, who as a Richland County Democrat represents a lot of state workers and often defends their benefits, said TERI has to go. He said the biggest complaint he hears from state workers is when someone who is not in TERI loses a job to budget cuts while an employee who is in TERI keeps his or her job.

“It has ballooned into something no one imagined it would become,” Jackson said. “And, quite honestly, I think that it has probably been somewhat abused.”

A bill approved by the House would close the TERI program for anyone hired after July 1, 2012. But some state senators say that is not good enough. Leventis, the Democratic senator on the retirement subcommittee, wants to phase out the TERI program over eight or 10 years.

The last time lawmakers changed the TERI program, in 2005, it led to a class action lawsuit. The state lost and had to pay $31.8 million to 14,000 working retirees, plus interest and attorneys’ fees.

But Dick Harpootlian, who sued the state on behalf of those employees, said lawmakers would have “a strong argument” for closing the program for current workers.

“It depends on how they do it,” he said. “With this Legislature, given a chance to screw it up they will.”

Lies, logic, and changing the rules when it's convenient

South Carolina's lawmakers like to say that we spend upwards of $10,000, $11,000, maybe more than $12,000 per student to educate children attending our public schools. They like to say it because it sounds spectacular and makes us look like we're spending money like water on a bloated, wasteful school system. The average citizen doesn't know the difference, so our electeds get to play both sides of the question, depending on their audience, saying, (a) See, we're downright foolish, we spend so much on our little ones and their fancy schools, or (b) See, we're downright foolish, spending too much on other people's little ones and their fancy schools.

Fact is, when the legislature left for home two weeks ago -- before Governor Nikki Haley demanded they return to pass her political agenda -- they were satisfied to spend only $1,617 per child from our state's treasury. That's roughly what we spent during Bill Clinton's second term, a truly pathetic and paltry sum for a state that pretends to support public education.

Yes, "pretends" is the perfectly correct word to use, when a state legislature funds public schools at so low a rate that districts cannot afford to keep a school's doors open and the lights on without issuing general obligation bonds to pay local basic school expenses.

Yet here we have another perfect example of the ineffectiveness -- or malevolence, for it must be one or the other -- of our General Assembly: When local delegations adopted local legislation granting school districts permission to do exactly this -- issue bonds to pay for operating expenses -- Haley vetoed those bills.

And now those lawmakers, representing three school districts, find themselves begging their colleagues for support to override Haley's vetoes. It is literally a matter of whether or not districts will be able to pay their bills through the summer and fall.

Sen. Clementa Pinckney is one of them, and his local newspaper in Bluffton noted his case in yesterday's edition:

Calling it his last local priority before the S.C. General Assembly finishes its work this summer, Sen. Clementa Pinckney is trying to save a bill that Hampton County school officials say will ease their budgetary crisis.

At issue is whether school districts should be allowed to issue general obligation bonds as a way to pay for operating expenses.

In Hampton County's case, officials say they need that option to offset lost stimulus money, Education Finance Act funds and future budget cuts. The alternative, according to Pinckney's bill, is to lay off teachers and staff, raise class sizes and and cut programs.

The Democrat's proposal, S. 877, is similar to Rep. Kenneth Hodges' bill, H. 4149, for Colleton County School District, and Sen. John Land's legislation, S. 785, for Florence County School District No. 4.

All were passed by local delegations, vetoed by the governor, and raised last week for an override by local senators. Traditionally with such bills, the rest of the 46-member body does not cast a vote.

But last week the three bills ran into intense objections from Sen. Greg Ryberg, R-Aiken, Sen. Chip Campsen, R-Charleston, and others.

"This is something that really does have a statewide implication on all the taxpayers in the state," said Campsen. "You don't incur debt to pay current operating expenses. That's like using your home as an ATM."

Notice that bit in the middle: "Traditionally with such bills, the rest of the 46-member body does not cast a vote." Yet two senators, neither of whom lives in the districts asking for this option: Hampton County, Colleton County or Florence County, raised objections and went on to orate with gusto on behalf of their party leader's position.

Why? Had not similar legislation been passed before, giving local districts the right to band-aid the wounds left gaping by the legislature?

Legislative records show that since 2003, six other similar bills passed into law, either by a local delegation's veto override or by the governor allowing the bill to pass without signing it.

They include school districts in Sumter, York, Orangeburg, Kershaw, Lee and Clarendon.

The newspaper asked Pinckney to speculate why his colleagues ignored the chamber's vaunted polity in this instance.

"I assume there may be some political things. Maybe there's blood in the water, and people are looking at it from a purely philosophical standpoint, just to make a point," said the Jasper County senator, who also represents Hampton County.

"I don't believe in making philosophical points. I am dealing with reality. Right now I have districts that are hurting," he added.

Just a day earlier, columnist Cindi Ross Scoppe of The State weighed in on the matter -- and sided with Haley.

Scoppe's argument was that the system itself -- rules that allow local delegations to pass single-county bills -- is "one of the most enduring and destructive vestiges of the Legislative state." Fair enough and maybe, but this is what we have instead of a conscientious legislature.

Supporters say the districts are in crisis and must make disastrous cuts without this admittedly irresponsible funding mechanism. The governor says the funding mechanism is fiscal folly and shouldn’t be allowed regardless of the consequences.

I agree with the governor, although the districts do need help that the state has failed to provide. But the debate is not simply about whether such an extraordinary remedy is justified; it is about whether state legislators finally will accept their responsibility to act as state legislators.

Scoppe is a knowledgeable columnist and keeps the attention of lawmakers with her incisive logic; that logic has caused legislators -- former Speaker David Wilkins was one -- to call her out by name from the podium or the chamber floor.

But that's the very problem. Logic is appropriately applied where logic is respected. This is South Carolina, where logic is no more than a political tool, used for some tasks and not for others, depending on who may be helped or hurt.

Scoppe writes:

By tradition, the only people who vote on a single-county bill are the legislators from that county. Except for school bills, they’re almost always unconstitutional. The single-county school bills are simply bad policy, because they buttress our practice of writing different rules for different districts, and prevent the Legislature from making the reforms we need to improve public education. The most obvious example is school district consolidation, which would benefit our state in countless ways; the Legislature refuses to order it because most legislators consider the districts to be the sole province of the legislators who represent them.

But when it became clear Thursday that local senators would override the governor’s vetoes, tea-party senators revolted, insisting that it was not only their right but their responsibility to weigh in. Sens. Kevin Bryant and Shane Martin said they should vote to uphold the vetoes because the bills would affect their constituents who own property in the districts. Sen. Mike Rose said the bills went far beyond such traditional single-district topics as changing selection methods for school boards and pushed the Legislature onto a dangerously slippery slope that eventually would lead to exempting certain districts from, say, state student-teacher ratios. “At what point,” he asked, “are we going to step in and say, ‘you can’t do that’?”

Senate President Pro Tempore Glenn McConnell said the bills likely wouldn’t be considered constitutionally acceptable school laws because they made findings in the name of the Legislature and exempted the districts from state law.

The most surprising thing about the debate was who championed the divine rights of local legislators: Senate Rules Chairman Larry Martin, who warned his colleagues to be careful what they did unto others, lest the same things be done unto them: “I want you to stay out of my business in Pickens County, and I’m gonna stay out of yours.”

The fact that this perversion of the Golden Rule would be enunciated by one of the most responsible senators demonstrates just how deeply ingrained the idea remains that the Legislature should control all aspects of life in South Carolina.

And it illustrates my point, while little children continue to get by on state investments of $1,617 each.

Will Haley veto a plan to grant public schoolchildren more funds?

The Aiken Standard published a note today optimistic that our schools may get $56 million out of a conference committee agreement that irons out differences in the House and Senate budget plans. But the Standard is well aware that Governor Nikki Haley issued a declaration last week that public schools should get none of the late spring's windfall tax revenues.

It happens that Aiken County stands to collect two million dollars from the total sum, if it escapes Haley's wrath. And if that happens, the local school board may not be forced to raise the local millage rate.

If a S.C. legislative budget conference committee deal holds up, school districts would get an additional $56 million to boost their per-pupil allocations, including more than $2 million for the Aiken County School District.

The additional statewide funding is roughly half of the $105 million that the S.C. Senate had inserted into its budget initially after the Board of Economic Advisors projected another $210 million in new revenue.
...
Earlier this week, Gov. Nikki Haley said she would veto any additional funding for education.

As The Associated Press reported, the current per-pupil school allocation is $1,617 - more than $1,100 less than the state's own funding formula. Initial budget efforts improved the allocation to $1,788. The $105 million in extra appropriations would have move it to $1,959; the $56 million agreed upon by the committee will provide $1,880 per student.

Two of Aiken County's legislative delegation are tickled pink at the prospect of avoiding a millage increase: Reps. Bill Taylor and Roland Smith. But another two, Sens. Shane Massey and Greg Ryberg, take Haley's stand: In economic times such as these, children in the public schools have to suffer like the rest, and do more with less.

Ryberg, in fact, offered a colorful metaphor to illustrate his cold-hearted and cynical attitude toward the needs of children:

"The national economy is teetering toward a return to a recession," Ryberg said. "Squirrels have the sense to keep nuts for the winter."

Yes, summertime is precisely the time for Aiken County's children to forage for nuts and tuck them away in pencil boxes for those lukewarm Aiken County winter mornings to come. Ryberg assured the Standard he supports education, and the Standard gamely quoted him so:

"I'm fully supportive of education," said Ryberg. "But it's crazy to be in the same situation and face the same problems that we had four years ago when the downturn in the economy started."

He makes an excellent point. Many's the time during Senate budget debates past, when the state's economy was pink and the coffers were full, that our grave veteran Senators have intoned, Now is no time to spend money we have and commit ourselves to greater future obligations, even for the benefit of the little children of South Carolina.

Yet many's the time during Senate budget debates past, when the state's economy was bleak and the coffers were bare, that the same grave veteran Senators have moaned, Now is no time to spend money we don't have and commit ourselves to greater future obligations, even for the benefit of the little children of South Carolina.

It seems there is no good time to commit ourselves to a greater future, if doing it requires spending money.

Unless you live in North Carolina.

Andy Brack, publisher of an intelligent product called the Statehouse Report, included a noteworthy column in a recent edition. In it, he proposed that investing with perseverance in the things that matter can yield, over time, tremendous results. This is, of course, not new wisdom; Brack quoted the ancient philosopher Aesop, and used the fable of the crow and his pebbles to illustrate his point.

It seems entirely appropriate to offer Brack's example, given Ryberg's squirrels-with-nuts tangent, and another segment of his note:

If we want to do better on any of these measures, South Carolina has to make a sustained commitment to excellence and follow through like the crow. Two examples illustrate how perseverance pays off.

First turn to North Carolina. In the 1950s, some of Tarheel state's numbers, particularly on poverty and education, were as bad as -- if not worse -- than South Carolina's. But an inspirational leader, Terry Sanford, mustered the political muscle to invest big in public education, particularly at the university level. And a group of business, political and academic leaders worked together to create a research and development park that blended the resources of universities with the corporate sector. The result? Research Triangle Park, now the home to more than 170 global companies.

How did it happen? North Carolina's leaders dreamed, adopted a shared vision and persevered to make it happen.

A second example comes from the world of politics. Following Franklin D. Roosevelt's New Deal and the idealism of John F. Kennedy, Great Society naysayers concocted a political vision espousing government was bad for America. With the Watergate scandal injecting cynicism in a country still smarting from the clashes of the 1960s, the political environment was ripe for the message by Ronald Reagan that "government is the problem." In the years that followed, many politicians blindly adopted the mantra that the only way to get what's needed in America was to cut taxes, cut more taxes and cut more taxes -- to, in fact, cut government so much that conservative tax-hater Grover Norquist could "drown it in a bathtub."

The moral is that conservatives adopted a once-controversial political vision, but kept plugging away at it for years until that vision became the vision of the majority.

But in 2011, a vision to continue to cut taxes more is becoming ridiculous. With South Carolina having the dubious distinction of taking in the lowest amount of taxes per capita according to the Tax Foundation, we don't have much fat to cut. We're cutting into the bone.

Our state's leaders need to comprehend that South Carolina needs transformational change to survive. To persist in cuts on top of cuts will lead us to becoming a third-world state.

The root of the word "fable" is Latin and means "story." The word "fabulous" has the same root. If we want South Carolina's future story to be fabulous, we've got to become the crow and work hard to shrug off the hangovers of the past. Invest perseveringly. Dum spiro spero.

Of course, I prefer Brack's example to Ryberg's.

The question is, Is Nikki Haley going to be crow with wisdom, or a squirrel hoarding nuts?