Teacher pensions in the charter sector

Amanda Olberg , Michael Podgursky / June 23, 2011

In the wake of the economic downturn, American public schools face serious, long-term fiscal challenges. Of them, rising pension costs are a particular concern. Yet school districts have no mechanisms for reining in these costs; almost all districts are tethered by statute to state pension systems (or, sometimes, their own local pension systems). It turns out, though, that some states allow their public charter schools to opt out of those systems. How they handle this opportunity bears scrutiny—and may suggest some lessons for the larger public education system.

Nationally, teacher compensation comprises 55 percent of current expenditures in K-12 education. (That figure rises to 81 percent when all school staff are included.) A large and growing share of these costs goes to help fund retirement benefits. Between 2004 and 2010, for example, district pension costs (not counting retiree health insurance) increased from 12 percent to over 15 percent of salaries. A recent report from the Pew Center on the States estimated that unfunded public employee pension liabilities in the U.S. grew to $1.26 trillion during the 2009 fiscal year; other studies estimate that the true liability is even higher. Even as states attempt to pay down this liability, pension costs for all public employees, including teachers, will likely keep rising.

In search of alternatives, we looked at public charter schools in some states where there is no requirement to participate in the state teacher-pension plans. That’s the situation today in sixteen states.

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Teacher pensions in the charter sector

Setting the record straight: Fordham and charter-school sponsorship

Terry Ryan / June 23, 2011

Ohio has echoed with controversy in recent weeks regarding House-passed changes to the state’s charter law that would decimate an already weak charter-school accountability system (see here, here, and here). We at Fordham have been outspoken and relentless in commenting on what’s wrong with the House amendments and have forcefully argued for stronger charter accountability and transparency.

That’s not a new argument or a new role for us. For more than a decade, we’ve pressed Buckeye policymakers on charter-school quality. That included co-authorship (with the National Association of Charter School Authorizers and the National Alliance for Public Charter Schools [NACSA]) of Turning the Corner to Quality: Policy Guidelines for Strengthening Ohio’s Charter Schools. This 2006 report urged a “housecleaning” that would close down Ohio’s poorest performing schools. Partly in response, the General Assembly passed a law two months later that forced failing schools to improve or face automatic closure.

	We have no need or desire to sponsor schools in the future if a better option is available for schools and the children they serve.

Because we’ve been so vehement in criticizing the recent House language (currently in conference with the Senate, which stripped that language out of its version of Ohio’s biennial budget), some who disagree with us have questioned our motives. They’ve even charged Fordham with a “power grab” because

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Setting the record straight: Fordham and charter-school sponsorship

Detroit school reform: Take 1,362

June 23, 2011

You can’t fault Michigan for trying. And then trying some more. To heal the ailing Detroit Public Schools, leaders of the Wolverine State have created an emergency financial manager, have renegotiated the teacher contract, have shuttered failing schools, and have pledged to convert nearly half of its high schools to charters. Despite all this, DPS has remained at death’s door. But an ambitious and experimental new treatment, announced on Monday by Governor Rick Snyder (and backed by Arne Duncan) might well provide some relief. The new plan (which, if effective in the Motor City, will expand out to other failing schools and districts in the state) creates a “recovery school district” of sorts for Motown’s bottom 5 percent of schools. This new mini-district, called the Education Achievement System, will give its schools’ principals the authority to hand-pick their teachers and handle their own budgets, as well as increase total instruction time for students. The new district (along with all Detroit public schools) will be under the purview of DPS emergency manager Roy Roberts and a small appointed committee. Much like what’s in place for New Orleans’s RSD, EAS schools will be required to stay in the system for at least five years, at which point improved schools can choose to remain with EAS, return to DPS, or convert to an independent charter. Further, the initiative will expand the lauded Kalamazoo Promise program, a privately-funded scholarship that will foot the bill for two years of post-secondary education for all DPS graduates. Details about the initiative remain scarce—including how the district

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Detroit school reform: Take 1,362

METCO Merits More: The History and Status of METCO

June 23, 2011

Since 1966, the Metropolitan Council for Educational Opportunity (METCO) program has been busing students from Boston and Springfield, MA to quality schools in suburbs that volunteer to participate. Today, the program now links 3,300 students—most low-income and minority—with thirty-seven receiving districts. This white paper from Boston’s Pioneer Institute and the Houston Institute for Race and Justice at Harvard assesses the effectiveness of METCO and offers recommendations to expand it. Overall, the authors find that METCO students consistently beat their peers in Boston and Springfield on state tests. Further, 93 percent of METCO students graduate on time (30 percentage points higher than the Boston or Springfield average) and 90 percent go on to post-secondary education. In light of these successes, Pioneer recommends increased state funding for the program (as well as district reimbursements and competitive grants for participation) and the expansion of METCO to other urban districts in the Bay State. Regrettably, the authors’ analyses of the program’s effectiveness can’t control for student motivation, parent income or education, or selection bias. It will be up to legislators on Beacon Hill to decide whether these promising—but less than “gold standard”—findings warrant an additional investment.

Susan Eaton and Gina Chirichigno, “METCO Merits More: The History and Status of METCO” (Boston, M.A.: The Pioneer Institute, 2011).

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METCO Merits More: The History and Status of METCO

Too Simple to Fail: A Case for Educational Change

June 23, 2011

This new book is based on a premise neither novel nor eye-opening: “Learning comes from time on task, delivered at a level appropriate to the student.” Years of data (and common sense) say that, too. What makes this volume interesting is where its author, a professor at the University of Maryland at Baltimore, takes this insight. Guided by the North Star of increased productive instructional time, the book criticizes almost every aspect of the current public education system—from school assemblies to sports to testing. Each of these “worthless” pursuits detracts from the time that students spend learning the curriculum. Instead, Barker Bausell urges a number of provocative changes. Among them: All schools should adopt a “zero-tolerance” approach to pupil behavior (because any distraction pulls students off task). Teachers should be evaluated based on the amount of time they spend delivering curriculum-relevant instruction (divergences are also unwanted distractions). And testing should be tied directly to curricular objectives (the SATs, for example, don’t make his A-list). Ultimately, Bausell sees classrooms being replaced with learning labs, each student learning at a computer able to tailor a lesson to meet individual needs, much like a private tutor. Unfortunately, as the book builds upon its original premise, cracks in the idea’s foundation are exposed—many of which are left unaddressed. How to ensure, for example, that teachers are following sufficiently rigorous curricula or that rote memorization doesn’t supersede deeper knowledge. Still and all, the book pushes readers to question current reforms. And that’s not a bad

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Too Simple to Fail: A Case for Educational Change

Eliminating the Achievement Gap: A White Paper on How Charter Schools Can Help District Leaders

Daniela Fairchild / June 23, 2011

This white paper (the second in a series on portfolio districts from the Center on Reinventing Public Education) hits the traditional school district hard, asserting that, due to resource constraints and political shackles, it will never be able to make the big gains necessary to ease the achievement gap and ramp up student success. This is where the “portfolio district”—and charter schools—come into play. Charters, the authors argue, have shown the effectiveness of extended days (KIPP), parent involvement and school culture (YES Prep), and intensive professional development (Mastery Public Schools). Districts would be smart to join forces with these proven operators. Frustratingly, however, the paper’s concluding points have little to do with either charters or the achievement gap. Instead, the authors provide what reads like a twelve-step program for districts looking to get on the portfolio-district wagon. Step one: Acknowledge the problem. Step two: Agree that we have to try new things. And on, and on, and on.

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Eliminating the Achievement Gap: A White Paper on How Charter Schools Can Help District Leaders