The retirement paperwork for more than two dozen employees of local school systems was processed in December, nearly nine months after it was announced that waiting until the end of the school year could cost retirees serious money.
Last March, the Teachers Retirement System of Georgia announced the repeal of its discretionary tax offset, used to balance the income tax charged to retirement benefits.
The offset, established in 1990, gave teachers a 3 percent increase in benefits for the first $37,500 a year after a 1989 U.S. Supreme Court ruling that every state must treat the taxation of retirement benefits the same.
Prior to that, teachers in Georgia were not taxed on their retirement packages.
But as of Tuesday, teachers who have not retired will lose that 3 percent increase.
The announcement pushed teachers, administrators and staff out the door sooner than some anticipated or, in other cases, wanted.
According to TRS, the organization processed 1,900 retirements last month — up more than 730 percent from December 2011 when the system processed 259 requests.
But, system officials said, the retirements are down 60 percent statewide for this month compared to the same time last year.
“We really think that a lot of the people (who) took advantage of that tax offset by Dec. 1 probably were going to retire at the end of the year,” said Jeffery Ezell, TRS executive director. “So, from our standpoint, as a retirement system, we think by the time we get to the end of the fiscal year, our numbers would not have increased very much from what we would’ve expected anyway.”
Hall County Schools had 19 teachers, administrators and staff members, including two principals, retire in the middle of the school year as a direct result of the tax offset repeal.
The positions have been filled, including the two leadership positions at White Sulphur and Chestnut Mountain elementary schools.
“It would’ve been easier for us if they had done it so they would’ve gone out at the end of the school year, but we’ve not been having to wring our hands over what we were going to (do),” said Lee Lovett, deputy superintendent of Hall County Schools.
TRS says the tax offset is no longer needed because older retirees already have hefty income exclusions.
Retirees between the ages of 62 and 65 can exclude $35,000 from state taxes. Those 65 or older can exclude $65,000. But those who haven’t reached that age receive no exclusions.
Gainesville City Schools has said goodbye to six retirees, but said there were 13 teachers who could have been affected monetarily from the repeal.
But only about half of them gave notice of their retirement, including five teachers and one paraprofessional. The city system has filled five of those positions.
“In this market, there were several really good beginning teachers that have come out of school and not received a job last year — we actually interviewed a lot of them,” said Merrianne Dyer, Gainesville superintendent. “We were able to get people in we feel are able to pick up and just keep going.”
Hall County was able to fill the teaching positions without skipping a beat as well.
“The administrative positions are difficult for the midyear shift,” Lovett said. “To replace the teachers is easier than it would’ve been five years ago because of what has happened to us in terms of cutbacks and the economy — there are more people looking for jobs.”
TRS officials said they were not initially sure of the impact the offset repeal would have, but they project fewer retirements in May and June, historically when most teachers call it quits.