Category Archives: Teacher Pensions

Kentucky Has a New Governor. We Hope He’s Not a Jerk About Education Policy.

Although he took more than a week to concede, Kentucky’s 62nd governor, Republican Matt Bevin, will not serve a second term. Experts agree that his provocative and insulting style, particularly his comments about teachers, attributed to his loss. Most notoriously, Bevin called teachers “thugs” and blamed them for the sexual assault of children and the shooting of a seven-year-old girl, after teachers protested the legislature’s sneaky efforts to reform the state’s pension systems. 

We are both Kentucky-based Bellwarians, and in the short conversation below, we discuss why Governor Bevin failed to advance education reforms in the state — and what Governor-elect and Democrat Andy Beshear might be able to accomplish given Kentucky’s Republican-dominated legislature. 

Katrina: I think you and I have some diverging ideas and perspectives about politics in general, and even about some education policies. But is it safe to say that we both think Matt Bevin is, well, a bit of a jerk?

Alex: I think we definitely have some common ground there, although I’d be careful about calling him a jerk — he might label you with a nickname like “Kooky Katrina.” More seriously though, I think a big part of his legacy will be the policy wins he left on the table, due in large part to his incredibly abrasive approach to governing.

Katrina: You’re not wrong about that. I was a fan of some of his policy positions, especially much-needed pension reform and increased school choice. If he had a bit more goodwill and emotional intelligence, he might have been able to demonstrate how those policies could actually help teachers and students.

Alex: Yep, but because of his style, pension reform and school choice are likely off the table for the next four years. And while some may be satisfied with the status quo on those issues, there are a lot of teachers and thousands of students who could benefit from reform to teacher pensions and school choice policies. 

Katrina: So where do you think Beshear has the opportunity to move the ball forward on education policy? 

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To Address Their Teacher Pension Problems, States Need to Better Understand West Virginia’s History of Reform

Despite its relatively small size, the state of West Virginia has had a significant influence on national politics. Take for example West Virginia’s educators, whose two-week strike in 2018 sparked similar protests across the country.

Yet, stagnant salaries are not the only financial problem facing teachers and states: there is a growing teacher pension crisis.

Here again, West Virginia is at the center of the debate. The state reformed its pension plan in the early 1990s, but by 2005, reverted back to the statewide pension system. The West Virginia experiment is now frequently cited as a cautionary tale when other states attempt to refashion their teacher retirement systems. Critics argue that pension reform simply doesn’t work.

However, that reading of West Virginia’s pension reform is incomplete and based on commonly held myths about pensions and alternative retirement plans. Continue reading

Media: “West Virginia shows states how not to reform teacher pensions” in GOVERNING magazine

I have an opinion piece out today in GOVERNING magazine. Despite the insistence that West Virginia’s pension experience proves reform can’t work, a closer analysis actually reveals how the state’s missteps can be instructive for other states looking to address their own teacher pension problems:

…the limited success of the state’s DC plan wasn’t the result of an innate shortcoming of DC plans in general. Rather, the state’s design choices undermined the ability of the plan to provide a sufficient benefit to most teachers. Indeed, both plans were designed in such a way that at least 40 percent of teachers never qualified for any retirement benefits from the state at all.

Read the full op-ed here. And check out our new report on teacher pension reform in West Virginia here.

Media: “Kamala Harris’s Flawed Proposal to Help Teachers Could Make Problem Worse” in The Hill

Last month, Senator Kamala Harris (D-CA) introduced a plan for a federal-state partnership to boost teacher salaries. In a new op-ed for The Hill, I write that Harris’ proposal relies on flawed data on teacher pay and ignores the real factors holding teacher salaries back — namely, the rapidly rising costs of teacher benefits like pensions and health care:

Of course, teachers can’t use their health care or pension plans to pay their mortgage or buy groceries, but total compensation is still the only apples-to-apples way to analyze across sectors — especially because deferred compensation through pensions is such a fundamental aspect of teacher compensation today.

Failing to accurately account for pensions and health care obscures the extent to which these costs are crowding out resources for teacher pay. To give one example from Sen. Harris’s home state, in Los Angeles, where teachers recently went on strike, spending on teacher salaries increased 24 percent over the past decade, whereas health care and pensions increased 138 percent. Overall compensation is rising even if teachers don’t see it in their paychecks or the supports they receive in their classrooms.

While Harris’ proposal is well-meaning, it would not address the root causes for why teacher salaries have been flat for so long. Without more meaningful attempts to control benefit costs, teachers are likely to see a growing disconnect between their take-home pay and their total compensation package.

New Report: Benefit Spending Consumes Growing Share of Education Budgets

The recent teacher strikes in Arizona, Colorado, and West Virginia highlight a common problem: education spending is stagnant or in some cases decreasing. If teachers working multiple jobs to make ends meet isn’t bad enough, here’s worse news: skyrocketing benefit costs, such as healthcare and pensions, are consuming an increasing share of K-12 education budgets.

In a new report, “Benefits Take Larger Bite out of District K-12 Budgets,” I analyzed district education and benefit spending from 2005 to 2014. The results are troubling. Over that ten-year span, benefit spending increased more than 22 percent nationally. K-12 spending, on the other hand, grew less than 2 percent. As a result, more than $11 billion fewer dollars made it to classrooms in 2014 compared with 2005, after adjusting for inflation.

The problem of rising benefit costs varies significantly by state. As shown in the graph below, in the vast majority of states, benefit spending grew far faster than education budgets overall. In North Carolina, for example, benefits grew 48 percent while the state’s education spending only increased 2 percent. The problem persists even in states like Michigan that cut both K-12 and benefit spending, because they weren’t cut at the same rate. The Wolverine State cut education spending by 19 percent, but benefits were cut by only 2 percent. As a result, benefits eat up an even greater share of Michigan’s education budget than they did previously.

via “Benefits Take Larger Bite out of District K-12 Budgets”

Barring a dramatic change, the problem of ballooning benefit spending will only get worse. Due to many states’ histories of underfunding their pension systems while simultaneously increasing the generosity of the plan, costs will continue to rise. Legislators will need to find politically viable solutions that both meet existing obligations and mitigate rising costs going forward.

Read my full report here.