By DAN KRISTIE, Daily Local Staff Writer

WEST GOSHEN — The West Chester Area School Board on Monday night urged the state Legislature to change the pension system for Pennsylvania's public school employees.

The school board unanimously passed a resolution asking legislators to support one of two recently introduced companion bills: House Bill 2135 and Senate Bill 1185.

The bills, which are effectively identical, would reduce the amount teachers and school districts pay into the Pennsylvania Public School Employee Retirement System.

Officials said this legislation is written to help fix funding problems facing the retire

ment system. If the problems are not fixed, they said, West Chester Area and most other school districts in Pennsylvania will face drastic program cuts or bankruptcy.

The retirement system is funded by contributions from public school employees, school districts and the state. If the retirement system's current funding formula remains unaltered, school districts across the state will have to more or less double their contributions to the fund each year for the next five years, officials said.

West Chester Area, for example, would have to spend $64 million over the next five years to keep up with its retirement system contribution, officials said. The school district's budget this year is likely to be about $200 million.

Because state law restricts the percentage by which school districts can raise taxes each year, the rising retirement system contributions would likely have to be covered by deep budget cuts elsewhere.

The two bills endorsed by the school board would reduce the pensions that newly hired public school employees can expect upon retiring. The pensions for current employees, school officials said, would remain the same.

About two dozen West Chester Area employees atended Monday's meeting to oppose the bills endorsed by the school board. Three of the employees spoke and the rest clapped when the three finished speaking.

The employees said that when people take jobs at public schools, they do so knowing that while the pay is modest, the benefits are good. They said that any drop in benefits — including pension benefits — would discourage talented individuals from applying to work in public schools.

Some of the employees who spoke also said they were skeptical of the officials' claim that these bills would not affect the pensions of employees who are already contributing to the retirement system.

Steve Sobieck, a district social studies teacher, said school boards and the state should agree on a different way to fix the retirement system. Part of the problem, he said, is that "the state and the boards have severely underfunded the pension."

Sobieck was referring the state's decision in 2001 to increase the pension amount while at the same time deferring for a decade the contributions the state and individual school districts paid into the retirement system.

West Chester Area Superintendent James Scanlon said that in 2001, the state made the bet that it could push off for 10 years some of the retirement system payments and rely upon investment earnings to make up the difference.

But Scanlon said it seems the state did not comprehend the risks involved in this decision.

"I don't think they realized there would be such a big recession right now," he said.

Scanlon said the amount of money local school districts pay into the retirement system is determined by the state; therefore, he said, the responsibility for the solvency of the fund lies with the state, not with local districts.

"The key point," Scanlon said, "is that the Legislature needs to step up and do something, or this is going to bankrupt school districts."

The two pieces of legislation the school board endorsed Monday would cut in half the amount school districts, school employees and the state contribute to the retirement system. At the same time, the measures would greatly reduce the amount of pension benefits school employees are guaranteed.

To offset this, the state would create a group of 401(k)-style funds. School employees would have the option to take some of the money they saved through the reduced pension contribution and invest it in these funds. The school districts they work for would then make a matching contribution, up to a certain percentage.

Sobieck said he is wary of reducing the pensions that school employees are guaranteed.

The bills would also cap the amount school districts had to contribute to the pension plans at the Act 1 index. Act 1 is the state law that limits the amount by which school districts are allowed to raise property taxes each year. If districts wish to raise taxes beyond this amount, they must obtain approval via a voter referendum.

To contact staff writer Dan Kristie, send an e-mail to dkristie@dailylocal.com.