Gov. Eliot Spitzer, Merit Pay and 55/25 Pension Plan

February 17, 2008
For City’s Schoolteachers, Retirement May Be Closer
By JEREMY W. PETERS, NY TIMES

Gov. Eliot Spitzer (picture) is poised to approve a deal that would sweeten retirement incentives for New York City teachers, a move that their union and Mayor Michael R. Bloomberg support but that budget watchdog groups say is financially risky.

Because Mr. Bloomberg has agreed to the measure, which would allow teachers to retire five years earlier than they can now and still receive full pension benefits, Mr. Spitzer is likely to sign it, according to an administration official who did not want to be identified because no final determination had been made.

The Spitzer administration is still vetting the plan to make certain that it does not contain any significant unknown costs for the state, which is facing a budget deficit of at least $4.4 billion.

The pension plan — part of the merit-pay agreement reached in October by the Bloomberg administration and the teachers’ union — moved through the Legislature last week at an unusually fast pace for a proposal so significant and costly. The Assembly passed it on Monday, 134 to 8. Two days later, the Senate approved it 54 to 0.

Under state law, the Legislature and the governor must approve changes to pension plans for New York City public school teachers. The pension plan would cost the city $99.2 million a year, according to a legislative analysis. But Mr. Bloomberg has characterized the plan as “cost neutral,” in part because the highly paid teachers who would be eligible to retire would be replaced by teachers who would earn far less.

But budget watchdog groups have called the plan irresponsible. “You can’t have a more generous pension system and not have it cost more money,” said Charles Brecher, research director for the Citizens Budget Commission, a nonpartisan group. “It’s taking a pension system that is already pretty generous and making it even more generous.”

Most teachers now need 30 years of service to retire with full pension benefits at age 55. But under the new agreement, they would be able to retire at 55 with their full pensions as long as they had worked for 25 years.

The pension pact was part of an accord the Bloomberg administration reached with the teachers’ union last fall to implement a plan to award bonuses to teachers based largely on test scores of students at schools with high concentrations of poor children.

October 17, 2007
Bloomberg Unveils Performance Pay for Teachers
By ELISSA GOOTMAN, NY TIMES

The Bloomberg administration and the New York City teachers union after months of negotiations announced an agreement today on a performance-pay plan that would give teachers bonuses based largely on the test scores of students at schools with high-poverty populations. The plan, which will be phased in, is a major breakthrough for Mayor Michael R. . Bloomberg and Schools Chancellor Joel I. Klein, who for years have called for a merit pay system in which high-performing teachers can earn extra money.

At the same time, the administration gave the union the city’s support for state legislation to allow city teachers to retire five years earlier with full pension benefits. And the city agreed to pay $160 million to settle a longstanding pension dispute concerning benefits for 40,000 retirees and active teachers. Mr. Bloomberg and Mr. Klein announced the plan jointly with Randi Weingarten, president of the United Federation of Teachers, at City Hall, with the mayor calling it a “historic and unique agreement.”

Merit pay programs, which break from salary schedules based on seniority and degrees, have traditionally been opposed by teachers unions. But they have been gaining ground across the country in recent years, and the idea is likely to get a major lift with its adoption in the nation’s largest school system.

New York’s plan is a twist on the traditional concept of merit pay. Pots of money will not be distributed teacher by teacher, but be given to schools that do a good job raising students’ test scores.

This year, about 200 of the city’s more than 1,400 schools that the administration characterizes as “high needs,” based largely on how poor their students are, will be eligible for about $20 million in bonuses. If they meet certain performance goals, they will receive an amount that totals $3,000 per teacher. Next year, officials said, at least 400 schools will be eligible.

It will be up to “compensation committees” at each school made up of teachers and principals supervisors to divvy up the money as they see fit. They could choose to distribute it evenly among union members or single out high performers.

The plan not only gives Mr. Bloomberg a policy change he has long sought, it allows Ms. Weingarten, a potential candidate to lead the national American Federation of Teachers, to cast herself as a reform-minded union leader.

Both the Bush administration and Representative George Miller, the California Democrat, who is chairman of the House education committee, have tried to promote the concept of merit pay. Leaders of the two national teachers’ unions — Reg Weaver, president of the National Education Association, and Toni Cortese, executive vice president of the American Federation of Teachers — recently objected to draft House legislation to renew the No Child Left Behind law because of a proposal to provide grants to school systems that choose to pay bonuses to teachers who excel in schools with high-poverty student concentrations.

Ms. Weingarten said the New York plan has “checks and balances” that brought the union on board. In each eligible school, the U.F.T. chapter will have a vote on whether to participate. And U.F.T. members join principals in determining how the bonuses will be distributed.