Levers for More Equitable Teacher Pension Financing
Last week, State Comptroller Natalie Braswell announced that her office would transfer $2.8 billion of Connecticut's rainy day fund into a one-time payment toward the state's unfunded pension liabilities, above and beyond the state's regularly required contributions. According to the press statement, this makes Governor Lamont the first ever Connecticut governor to make additional payments to cover unfunded pension liabilities. Of this one-time payment, $900 million will go to the Teachers' Retirement Fund.
Interestingly, however, beyond the state’s unfunded liabilities, Connecticut’s annual required teacher pension contributions account for over a quarter of the state’s overall K-12 education budget. As we approach the one-year anniversary of our report on teacher pension financing—co-written with the Equable Institute—it’s more clear than ever that the problem of teacher pension debt is two pronged: yes, there are long-standing, unfunded liabilities that have accrued over time; but there is also an unfair and inequitable structure to financing the normal cost each year. That is, municipalities pay no portion of teacher pension obligations—even though these benefits are based upon the teacher salaries that local districts individually set. This setup is impacting district resources and competitiveness when recruiting and retaining educators.
To explore this idea further, the report—titled Who Benefits? How Teacher Pension Financing Impacts Student Equity in Connecticut—established a new equity metric for Connecticut developed by ERN CT, the Per Pupil Pension Subsidy. We divided each public school district's pension obligations by its student enrollment, producing a figure that identifies precisely how much the state is spending on pension subsidies per student in each district. Our alarming finding was that the state's inequitable Per Pupil Pension Subsidies put lower performing, less affluent, and more diverse school districts at a systemic disadvantage when it comes to compensating their teaching workforces.
Since teacher shortages in public school districts continue to be a dominant headline this quarter (e.g.: CT Insider story here.), we should keep in mind the fact that inequitable teacher pension subsidies from the state reinforce the gaps in teacher compensation between one district and the next.
We think it’s time for the legislature to analyze the many variables that could produce a more equitable system of teacher pension financing, one in which municipalities pay a fairer share when the salaries offered by their local school districts rack up disproportionate pension debt.
Pictured above is a throwback to the fun “choose your own adventure”-style policy considerations that we included at the end of the report!
Tell Me Why It Works: The Science Behind Reading
Finished “Sold a Story” (It’s ranked #13 on Apple podcasts today! Wow.) and looking to learn more about literacy? People in Connecticut have an exciting opportunity to see its author, Emily Hanford, live in New Haven on Tuesday, December 6th at an event called, “Tell Me Why It Works: The Science Behind Reading.” Also featured are ExcelinEd’s Kymona Burk, Literacy How’s Margie Gillis, Stamford Superintendent Tamu Lucero, a New Haven public school teacher, and ERN CT’s Amy Dowell to discuss the passage of the Right to Read legislation. Register here, and check out the full program here. The Right to Read Twitter handle (@Read_CT) will also be live streaming for those who can’t make it in person.