After a preliminary budget hearing last week, the president of the Tamaqua School Board said that steady increases in pension costs could bankrupt Tamaqua and about 500 other districts in the state.

"It's very simple," said Tamaqua School Board President Larry Wittig. "The pension costs are increasing to the point where it's just not sustainable."There's not enough money in Pennsylvania to fund the systems," he added. "By 2018, there will be 500 bankrupt districts in the state."As an example, Wittig said that about half of Tamaqua's approximately $27 million budget is payroll-related. Of that, $4.1 million is pension funding."And that's just looking at next year's budget, when the pension cost is 16 percent," Wittig said. "The next year it's 21 percent, then the next year 30 percent of the salary cost is going to the pension fund."District Business Manager Connie Ligenza said revenue is estimated using a three-year trend. She calculates state revenue as reflected in the budget presented by the state governor.The good news is that next year, revenue will be higher than this year by $780,566. The bad news is that expenses will increase by about $2.2 million.Some of the anticipated expenses aren't etched in stone, as the district and teachers are presently negotiating a new contract. The current teacher contract expires in July 2014.PSERS, the Public School Employees Retirement System, in existence since 1917, is funded by employees and employer. Members contribute 7.5 percent of their salaries as a mandatory payroll deduction.In 2011, the employer contribution was 8.5 percent of payroll. That percentage will steadily increase in 2012 it was 12.36, in 2013/14 it is 16.93, and for 2014/15 it will be 21.4 percent.Wittig explained that the percentage is calculated based on the anticipated number of retirees who will be added during those years. The problem is not that districts are funding employee pensions, Wittig said, the problem is that the actuaries who set up the pension plan were using a "growth model" that anticipated a steady 8 percent increase."That was OK in the 1990s, but along came 2007 and 2008 and now you have a minus 50 percent loss, plus you didn't get the 8 percent increase," Wittig said. "And every year since then there was about another 10 percent loss that you (the districts) can't possibly make up.""Raising taxes won't solve the problem," he added. "It won't put a dent into it because even if you raise taxes you'll just have an inevitable eroding of the fund balance."That's what is projected in Tamaqua. At the end of the 2013/14 school year, the projected fund balance is $6.2 million; after 2014/15 the fund balance decreases to $5 million; after 2015/16 it's $2 million; after 2016/17, it's minus $759,000.During that time period, projected revenues remain steady at about $26 million, with the tax rate remaining at 33.36. But the projected expenses rise from a projected $28.9 million next year to $29.7 for 2015/16 and $31 million for the 2016/17 year."We just don't have enough money to fund the pensions," Wittig said. "I hate to say it, but unless something happens it's the demise of public education."District Superintendent Carol Makuta said that as budget talks continue, administrators do their best to keep their eyes on the prize, which is providing the best education they can for their students."We have quality programs here," Makuta said. "And we vow to do our best to keep the programs that we currently have."