Pension math is like a splinter. A splinter is painful, and it’s going to get
infected and become even more painful if you do nothing. But taking it out is going to hurt too.
States trying to deal with the desperate state of their underfunded
teacher retirement systems confront similarly painful choices. (See here for NCTQ’s latest take on states’ pension health.) In California, Governor Jerry Brown has
proposed steep increases to district contribution rates in an effort to close
an estimated $74 billion deficit.
Required contributions will rise gradually over the next seven years to more
than 19 percent. As the LA Times pointed out, that means a district will need to cough up nearly $10,000 for a teacher
who makes an average salary of $50,000.
Districts are going to feel the pain, as these huge increases
to retirement contributions will have to come from somewhere else in the
budget. And with so much of district
budgets already going toward teacher salaries and benefits, it’s going to be
nearly impossible to prevent the cuts from coming from services to students.
Governor Brown deserves credit for addressing the pension
problem, rather than ignoring it as most policymakers seem willing to do. But here’s where the splinter analogy falls
apart: once that splinter is out, it’s
out. The same can’t be said about pension
math. Just plugging the hole is better than not plugging the hole, but it’s not a permanent solution. Unless real structural and
systemic reform is made to teacher retirement systems—in the best interest of
teachers and taxpayers—we’re going to go through the pain over and over
again.
