Montana labor news., 1945-01-25
THE UPS AND DOWNS
OF The TEACHERS
RETIREMENT ACT
Ry JAMES D. GRAHAM


The legislature in the year 1915, enact
ed a law providing for Teachers retire
ment Benefits or Insurance, compelling
teachers to retire when they became
physically or mentally incapacitated for
further school service or when they
reach the age Of IS years.
The teachers were to receive six hun
dred dollars per year from the state
treasury, payable every three months.
The retirement fund was to be main
tanned by tax from the teachers salary,
donations legacies gifts, bequests and
appropriations from the state treasury
Monies in the fund were to be invested
and interest from the investments was to
be paid into the Retirement Fund. By
the enactment of this law the state Of
Montana entered into a contract to give
the school teachers of Montana retire
ment pay of $50 per month and collected
from the teachers the premium on the
insurance through a monthly tax on
their salary.
In 1920, the Federal Reserve Bank put
on a campaign CT deflation in the
Northwest by forcing the banks to pay
off their loans to the reserve bank. This
forced the local banks to stop making
loans and to foreclose mortgages, which
in turn forced prices doWnwards, caus-
ing farmers to be dispossessed and banks
to close their doors and go into receiver
ship. Taxes became delinquent and the
general fund of Montana went in the
red The legislature faced with a real
ity of insufficient revenue being received
by the state treasury to meet the ex-
pense of government, did not make an
appropriation to the Teachers Retire
ment Fund and the great state Of Mon
tana defaulted its contract with the
teachers to pay the retired teachers the
amount due them on said contracts, all
Of which was primarily caused by the
bone-headed, brutal shortsighted and
stupid policy Of the directors of the Fed
eral Reserve Bank, which ruined local
bankers, farmers, merchants and caused
widespread desolation and ruin through
the Northwest with accompanying and
prolonged un Unemployment, t, robbing
through bank failures, the frugal, aged
workers and teachers Of their life savings
and making them dependents in their
old age.
When the legislature made no appro- /
priatons to the Teachers Retirement |
Fund, this left the revenue from the |
tax on teachers salaries as the only /
source Of income to the fund-therefore,
the amount of retirement pay received
by the teachers was considerably less
than the fifty dollars per month pledged
by law. To remedy this situation, House
Bill No. 1877, was introduced in the legis-
lative assembly Of 1927.
House Bill NO 1877 provided for amend
ments to the Teachers Retirement Act, !
whereby the counties instead of the !
state would make the contribution to the
Retirement Fund, and the county COM
missioners would have to levy a tax of
not to exceed one mill on the dollar of
the assessed value Of all taxable property
within the county. House Bill No. 1877,
on February 7th, 1927, was killed by the
committee Of the whole in the House.
Again in the Legislature Of 1929, an
attempt was made to amend the Teach
ers' Retirement Act and House Bill No.
222 was introduced and referred to the
committee on education. House Bill NO.
222 was similar to the one before the
legislature of 1927. The committee on
education reported back to the assembly,
that House Bill No. 300
do not pass" This ended a second at
tempt to place a tax on counties to re-
lieve the general fund Of the state from
its obligations.
1t should be remembered that in the
years 1927 and 1929, the counties had a
large delinquent list, therefore the legis-
lators felt that counties could not as
sumo the liabilities Of the state
In 1897 the legislature reinacted the
Teachers Retirement Law and raised the
tax on the salaries Of teachers to five
per cent up to $4,000 and provided for
to be made by the legis-
ature TO the Retirement Fund and guar
anteed the teachers retirement salary
according TO their years Of service, upon
reaching sixty years of age, based on
,he average salary earned during the
asst ten years Of school activity, but not
% exceed one thousand dollars. How
EVER, the legislators have not appropri-
tied sufficient funds and the retired
eachers are not receiving the retirement {
ialary due from the state as provided by !
aw. Few teachers earn salary suffi- l
,ient to warrant them receiving 81 900 {
DER year retirement salary. l
BY vote of three to two, the mem |
,ers of the teachers retirement board de-
sided to make an attempt to amend the
Retirement Act by placing
AK on all school districts, equal to three
md one-half per cent of the salary paid {
he teachers of the district-this is in I
leu of having the legislature, every two {
'ears, appropriate money from the gen.
raj fund of the state to the Teachers {
2etirment fund.
The proposed bill has a clause in it {
which provides that if the special tax {
makes the school levy exceed the ten I
Mills limit fixed by law, the school board !
an levy the tax without a special elec-
ion to increase the tax levy. This is a c
Inc sample Of the totalitarian theory of I
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