A new report published by the Manhattan Institute warns us of an impending crisis: In the coming years, taxpayers will continue to be taxed more heavily to pay for teachers’ retirements, teacher pension debt will keep growing, and children will suffer for it.
In an article for Insider, titled “Feeling the Squeeze: Pension Costs are Crowding Out Education Spending,” author Josh B. McGee wrote, “Almost every state increased retirement benefits for teachers in the booming 1990s, but the additional promises were not accompanied by responsible funding plans. By 2003, the funding for teacher pension plans overall was short by $235 billion; and by 2009, pension debt had more than doubled, to $584 billion. The strong bull market since the Great Recession has barely put a dent in the shortfall, which still totals approximately $500 billion.”
McGee says taxpayers will continue to contribute increasing amounts of their hard-earned money to pay for teacher pensions, but “the underfunding shortfall is so large that aggregate pension debt will also continue to grow.” Even worse, McGee says per-pupil retirement costs “are already approaching 10 percent of all education expenditures,” and he says unless we do something about it, pension debt “will continue to rise and continue to crowd out education spending on the state and local levels.”
Do these teachers feel an ounce of remorse for taking money at the expense of the quality of kids’ education? Not likely. It’s clear our pension system is broken, but in many places, the teachers unions are unwilling to do anything to make the problem less burdensome to the rest of us.
The Chicago Teachers Union (CTU), for example, recently engaged in a high-profile pension battle with Chicago Public Schools (CPS) that resulted in an agreement the CTU president called “imperfect.” It will require the district to continue paying for 7 percentage points of the 9 percent CPS employees are required to contribute to fund their own pension plan.
Across Illinois, taxpayers have been forced to pay $421 million more for teacher pensions since in 2017. “Yearly pension costs now consume more than 25 percent of the state’s general fund budget and are crowding out spending on social services, higher education, and nearly every other core government service,” reports the Illinois Policy Institute (IPI), which also declared, “Illinois’ pension math has never worked.”
Is pension math working anywhere? The Education Writers Association, reporting on teacher pension fund data released in 2015 by the National Council on Teacher Quality (NCTQ), wrote, “Taxpayers contribute to state teacher pension systems, but most of those dollars are not being invested in the future retirement of current employees.” According to the NCTQ report, “An average of 70 cents of every dollar contributed to state teacher pension systems is paying off the ever-increasing pension debt.”
Diane Ravitch, a notorious champion of the failing public school system, wrote in 2014 in defense of teacher pension costs, “Most teachers will never collect a pension. … Most teachers will not stay on the job long enough to collect a pension.”
Even if Ravitch is right, can you imagine how much more broken the pension system would be if more teachers were to collect pensions?
“And it must be noted that one of the implicit goals of the current ‘reform’ movement is to encourage teacher turnover, specifically to reduce future pension costs,” Ravitch wrote. “That’s not good for the teaching profession or for children or for education, but it helps cut costs.”
Teacher turnover is not the evil Ravitch would have us believe it is, especially when “turnover” is part of the weeding-out process of unfit or unmotivated teachers from the profession. I suppose Ms. Ravitch and other like-minded defenders of the public school establishment would prefer for every teacher in America, no matter how incompetent, to forever remain within the public school system.
And, by the way, cutting costs is good for the teaching profession, unless teachers who worked long enough to earn a pension want to end up like the 407,000 union workers and retirees who now fear for the viability and sustainability of the struggling Central States Pension Fund, which CNN reports is “currently paying out $3 for every $1 it takes in, and is expected to run out of money in 10 years.”
The silver lining of all this is the teachers unions have been and will continue to be exposed—and in dramatic fashion—for what they really are: greedy moochers who don’t give a fig about kids, the people who end up getting hurt the most as a result of outrageous pension demands.
The pension crisis will ultimately reach a breaking point; maybe then Americans will learn their lesson about responsible funding plans. Or, perhaps the crisis will attract a new wave of teachers who go into the profession to actually help children and not because of the exorbitant pension benefits.
[Originally Published at Townhall]