No budget growth means no state pay increases for teachers. It’s already hard for many schools to attract and keep good teachers. With no state raises they won’t – except in better off districts – be able to increase local property taxes.
For state retirees, no budget growth has a more indirect impact. Flat budgets for colleges, agencies, etc., will cause cuts in public employment. As inflation driven expenses eat into their stagnant budgets, agencies only option will be to cut jobs. That means fewer employees paying into the Public Employees’ Retirement System of Mississippi (PERS) over time.
Why is that bad for retirees?
Last September, PERS board chair Lynn Fitch called a special meeting to look at the long-term health of the retirement system. PERS’ unfunded pension liabilities have hovered around 40 percent (a funded level of 60 percent) for several years, drawing negative comments from national credit ratings agencies. In her role as State Treasurer, that is a concern for Fitch.