When it comes to pension reform in the education realm, it’s hard to stay positive. Here, we’re saddled with a bona fide fiscal calamity (up to a trillion dollars in unfunded liabilities by some counts), and no consensus about how to rectify the situation. No matter how one slices and dices this problem, somebody ends up paying in ways they won’t like and perhaps shouldn’t have to bear. All we can say is that some options are less bad than others. In The Big Squeeze: Retirement Costs and School-District Budgets, we analyze and project how big an impact the pension and retiree health care obligations will have on the budgets of three school districts: Milwaukee Public Schools, Cleveland Metropolitan School District, and the School District of Pennsylvania. The Big Squeeze: Retirement Costs and School-District Budgets is a summary report by Dara Zeehandelaar and Amber M. Winkler, based on three technical analyses performed by Robert Costrell and Larry Maloney to be released by the end of Summer 2013.
February 27, 2013
Dr. Paul Hill evaluates Governor John Kasich's education budget proposal.
In an era of budgetary belt tightening, state and local policy makers are finally awakening to the impact of teacher pension costs on their bottom lines. Recent reports demonstrate that such pension programs across the United States are burdened by almost $390 billion in unfunded liabilities. Yet, most states and municipalities have been taking the road of least resistance, tinkering around the edges rather than tackling systemic (but painful) pension reform. Is the solution to the pension crisis to offer teachers the option of a 401(k)-style plan (also known as a "defined contribution" or DC plan) instead of a traditional pension plan? Would this alternative appeal to teachers? When Teachers Choose Pension Plans: The Florida Story sets out to answer these questions.