Two little known amendments to the Social Security Act are dramatically and unfairly slashing the retirement benefits of hundreds of thousands of American teachers. The Government Pension Offset and Windfall Elimination Provision affect at least one-third of America’s education workforce, concentrated in 14 non-Social Security states.

The Social Security law prevents “dual entitlement” or receipt of full Social Security and spousal benefits at the same time. The effect of this in California is dollar for dollar reduction in Social Security survivor benefits for those earning STRS.
Act now! The Hearing Is Wednesday
Senator Susan Collins of Maine is going to bring S-49, and the issue of the Social Security Fairness Act of 2003, before a full committee hearing of the Committee on Governmental Affairs on Wednesday, September 24. Senator Collins needs testimony. Send testimony regarding how the law effects you personally to www.collins.senate.gov.

You are also encouraged to write letters to Representative E. Clay Shaw, Jr. You may fax your testimony to 202.225-8398 or email via www.house.gov/shaw. All statements for printing should be in Word Perfect or MS Word format and not exceed 10 pages. Include your email, name, address, telephone, and fax numbers.

State Council Election Runoff Results
*Dianne Garcia-Stevens 457
Susan Jauregui 288

* Indicates elected

California Remains Below the National Average in Spending Per Student

Fueled by a healthy economy and concerns about school performance, California’s investment in K-12 education began to grow in the mid-1990s. Over the next six years, the state’s investment-as measured by expenditures per student (based on average daily attendance)-increased 49% per student in 1995-1996. The figures grew to $7,924 per student in 2001-2002, while the U.S. average rose for $6,133 to $8,087 during the same period.

California is ranked ninth in the ten most populous states. Only Florida is ranked lower in spending. While California spent $7924 per student in 2001-2002, New York spent $11,472.

In 2001-2002 California spent $763 less than the U.S. average of $8,087, or about 91% of the national average. With more than 6 million students, California would have had to spend about $4.6 billion more on K-12 education to reach the average national expenditure in 2001-2002 and many more billions to catch up with New York.
California Has the Third Highest Number of Students Per Teacher
In 2001-2002 California moved from several years of being second highest to third highest in the ration of students enrolled per student: 20.8 compared to the U.S. average of 15.9. California was at the top of the list until 1996-97 when the state’s Class Size Reduction program began.

Both Utah, with a ratio of 21.1 students per teacher, and Arizona with 21.0 are now higher. Vermont is the lowest at 11.5. Among the 10 most populous states, California continues to have the most students per teacher.
To Learn More…

Rankings and Estimates 2002-2003 at http://www.nea.org
Teacher Pay in California at http://www.edsource.org
School Finance Section at http://www.edsource.org

Source: August EdSource

IRS Oks Flexible Account Reimbursements
For Over-The-Counter Medications

The Internal Revenue Service Sept. 3 said in Revenue Ruling 2003-102 that over-the-counter drugs can be paid for with pre-tax dollars through health care flexible spending accounts.
"Flexible Spending Accounts are an important tool in helping people meet their health care costs, " Treasury Secretary John Snow said in an IRS new release IR-2003-108 that accompanied the revenue ruling. "Since many prescription drugs have moved to the over-the-counter market, this action today makes paying for them a little bit easier to swallow."

The service noted that many health plans cease coverage for the cost of drugs that become available over-the-counter. The drug can become more expensive to consumers who must pay more for the over-the-counter version than they did for the co-payment when it was prescribed.
"Flexible Spending Accounts were established under the tax code to provide incentives for better health care," said IRS Commissioner Mark W. Everson. "This action is a sensible expansion and simplification of the program consistent with existing law."
Exclusion Broader than Deduction. Revenue Ruling 2003-102 said the statutory exclusion for reimbursements of employee health expenses is broader than the itemized deduction for medical expenses provided under tax code Section 213, which does not generally apply to nonprescription drugs.

Noting that the cost of over-the-counter drugs continues to be nondeductible for purposes of itemized medical deduction, the service differentiated the ruling from that in Revenue Ruling 2003-58, which held that only insulin and prescription medicines eligible for itemized deduction.
The ruling noted that dietary supplements such as vitamins, which are merely beneficial to general health, are not proper items for reimbursement from an FSA or excludable from gross income.

In addition, IRS said toiletries, cosmetics, and sundry items do not qualify as expenditures for medical care eligibility for reimbursement or exclusion.
The revenue ruling is scheduled for publication in Internal Revenue Bulletin 2003-38 dated September 22.

Open enrollment for the District flexible spending plan (Section 125 plan) is October 14 through November 14. For more information contact Risk Management at extension 7919.