Western New York (WKBW) School districts across the State are now trying to figure out how to pay a 37% increase for a mandated Teachers Retirement System.
"Could it be devastating? Very much so. It is one more expense," said Jane Burcynski, Executive Director of the Erie County Association of School Boards.
Currently, school districts contribute at a rate of 11.84%.
For the 2013-2014 school year, the employer contribution rate will rise to 16.25%
The New York State Teachers Retirement System has 277,000 active members and 149,000 retired members
"The increase in the employer contribution rate is primarily due to lower investment returns as a result of the financial crisis and continued global economic volatility," added Heidi Brennan, spokesperson for the State Teachers Retirement System.
The increased expense could cost local school districts millions of dollars, and force administrators to consider layoffs, consolidations, and school closures.
"Well it certainly increases the expenditures to an amount where it is difficult to find a revenue that could support those increases. We are working through those issues right know and our goal is to not have a significant increase on the local taxpayers," commented Steven Achramovitch, Superintendent of Hamburg Central Schools.
Governor Cuomo has proposed a 'smoothing plan' that would help school districts pay the increase.
Under Cuomo's plan, districts could opt to pay a flat contribution rate of 12.5% for up to 25 years.
"What happens if retirement costs go down in the future? So it's a risk, but in the age of very few options, it might be the only option for some districts," remarked Jane Burcynski.