The Education Gadfly The Education Gadfly A Bulletin of Weekly News and Analysis from the Thomas B. Fordham Institute
Volume 11, Number 24. June 23, 2011.

In This Edition

New from Fordham: Charting a New Course to Retirement: How Charter Schools Handle Teacher Pensions

In this new "Ed Short" from the Thomas B. Fordham Institute, Amanda Olberg and Michael Podgursky examine how public charter schools handle pensions for their teachers. Some states give these schools the freedom to opt out of the traditional teacher pension system; when given that option, how many charter schools take it? Olberg and Podgursky examine data from six charter-heavy states and find that participation rates in traditional pension systems vary greatly—from over 90 percent in California to less than one of every four charters in Florida. As for what happens when schools choose not to participate in state pension plans, the authors find that they most often provide their teachers with defined-contribution plans (401(k) or 403(b)) with employer matches similar to those for private-sector professionals. But some opt-out charters offer no alternative retirement plans for their teachers (18 percent in Florida, 24 percent in Arizona). Read on to learn more.

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Opinion and Analysis

Teacher pensions in the charter sector
What charters do when freed to innovate
Opinion | Amanda Olberg and Michael Podgursky

Setting the record straight: Fordham and charter-school sponsorship
Why Fordham authorizes charter schools despite the costs and hassles
Opinion | Terry Ryan

Detroit school reform: Take 1,362
Could the latest from Gov. Snyder finally do the trick?
News Analysis

Short Reviews

METCO Merits More: The History and Status of METCO
A tried-and-true integration program gets support from across the ideological spectrum
Review | Alicia Goldberg

Too Simple to Fail: A Case for Educational Change
A "no brainer" premise that makes you think
Review | Josh Pierson

Eliminating the Achievement Gap: A White Paper on How Charter Schools Can Help District Leaders
Three cheers for portfolio school districts
Review | Daniela Fairchild

From The Web

Mike and Richard play cops and robbers
Making sense of Michigan, CCSSO, and NAEP
Education Gadfly Show Podcast | Hosts: Mike Petrilli and Richard Colvin

Higher spending associated with higher rates of special-education identification
Will the “new normal” drive down special-ed ID rates?
Flypaper's Finest | June 20, 2011 | Mike Petrilli

When you actually know the topic about which The Economist writes
School-funding reporting gets lazy
Flypaper's Finest | June 20, 2011 | Daniela Fairchild

Extras

Rethinking “local control”
A new approach to school governance
Briefly Noted

Do you (Mind) Trust?
The Mind Trust is looking for a VP of edu-initiatives
Announcement

Work those teacher incentives
AEI offers lessons from NC's teacher bonus program on June 28
Announcement

Golden Peaks and Perilous Cliffs: Rethinking Ohio's Teacher Pension System
With lessons for the whole country
Featured Fordham Publication

Opinion and News Analysis

Opinion: Teacher pensions in the charter sector
By Amanda Olberg and Michael Podgursky

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.

Click to read "Charting a New Course to Retirement"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. When given the option, how many of these schools choose to participate in their regular state (or local) teacher pension plans, and how many do not? When they do not participate in state plans, what—if anything—do they offer instead?

To answer these questions, we examined data regarding the pension arrangements of “opt-out” charter schools in six states: Arizona, California, Florida, Louisiana, Michigan, and New York. We chose these six because they contain large numbers of charter schools and comprise over 75 percent of all of the charter schools that have the pension opt-out right.

We found that the rates at which charter schools participate in their state plans are low in jurisdictions where teachers in the state plan also participate in Social Security (New York, Florida, Michigan, Arizona). However, in states where teachers in the state retirement plan are not also included in Social Security (California, Louisiana), charter participation rates are high. In the latter states, opting out of the state system means opting in to Social Security, which evidently creates an incentive for charters to favor their state retirement systems.*

We surveyed a random sample of opt-out charters and found that their most common alternative retirement plans are 401(k) and 403(b) plans. The figure below shows the overall results. (Detailed state-level profiles and a more extensive analysis of the results are included in our full report, released yesterday).

Alternative Retirement Plans Offered by Charters

Alternative Retirement Plans Offered by Charters

A significant number of charter schools that opt out of their state retirement plans offer no alternative retirement plans for their teachers. This varies widely by state, however. For instance, while only one non-participating school in Michigan offers no alternative, 18 percent of non-participators in Florida and 24 percent in Arizona have no alternative retirement plan. In Michigan, 401(k) retirement plans are overwhelmingly the preferred alternative; a majority of charter schools in Florida and Arizona also choose those plans. Most charter schools in Louisiana and New York instead opt for 403(b) retirement plans. In California, the majority of charters are split evenly between 401(k) and 403(b) retirement plans. Types and amounts of employer and employee contributions also varied widely, as shown in the figure below. (Again, a detailed examination of these findings is available in the full report).

Types of Employer Contributions for Charters Not Participating in State Plans

Types of Employer Contributions for Charters Not Participati

As is often the case in this kind of analysis, the data raise at least as many questions as they answer. For example, do charter-school participation rates vary depending on characteristics such as authorizer type or grade span? What might we find in the other ten states that also allow charters to opt out of state retirement systems? What is the effect of charter-pension policies on teacher recruitment, retention, and quality? What important lessons can be gleaned from charter-school experimentation with alternative retirement systems? And finally, how can these lessons inform ongoing reform efforts in traditional public schools?

Charter schools were created in part to serve as laboratories for innovative practices and alternative approaches within the broad framework of public education. In certain areas, such as personnel policy, they’ve diverged considerably from traditional public school practices. Most, for example, forego formal collective bargaining and conventional teacher tenure. Many use various forms of differentiated and performance-related pay. The present study, the first of its kind, makes clear that some charter schools are also innovating in the teacher-pension arena.

There is no single pattern in the retirement alternatives offered by charter schools, but it is clear that traditional defined-benefit plans are not the only possible way to organize teacher pensions. Mobile teachers are apt to spend parts of their careers in different places and even different lines of work. Perhaps these teachers prefer portable 401(k)-style retirement plans, whereas those interested in job security and planning a long career at the same school might be less satisfied with such plans. Perhaps it is possible to restructure retirement options in a way that enhances the growth of human capital in all our schools. At the very least, we know that fiscal realities dictate fresh thinking about teacher pensions—and charter schools may point the way forward.

*Note: Not all public employees participate in Social Security; individual states decide.

Reactions to "Charting a New Course to Retirement: How Charter Schools Handle Teacher Pensions

Mike Petrilli "Charter-school pensions: The sum of teacher unions' fears," by Mike Petrilli Rick Hess "Charter schools & teacher pensions," by Rick Hess
Richard Kahlenberg "The no-pension 'innovation'," by Richard Kahlenberg Karen Hawley Miles "Learning from charters," by Karen Hawley Miles

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Opinion: Setting the record straight: Fordham and charter-school sponsorship
By Terry Ryan

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 we’ve pushed the legislature to allow for a new statewide authorizing entity that would merge the school portfolios of several existing sponsors, us included. Still others claim we are financially greedy and seek to expand our sponsorship efforts in order to boost our revenues. Such allegations are hokum and need to be refuted.

Our charter-school sponsorship philosophy

The Thomas B. Fordham Foundation has been sponsoring charter schools in Ohio since 2005.* Today there are six schools in our portfolio. (The all-time peak number was ten.) Two of these are in Columbus (KIPP: Journey Academy and Columbus Collegiate Academy), two are in Dayton (Dayton Liberty and Dayton View), one is in Cincinnati (Phoenix Community Learning Center), and one is in Springfield (Springfield Academy of Excellence). Collectively, these schools serve about 1,850 students, more than 85 percent of whom are economically disadvantaged. Next month, two more charters enter this fold: Sciotoville Elementary Academy and Sciotoville Community School, both located outside Portsmouth, in southern Ohio.

Fordham’s sponsorship efforts are aligned with NACSA’s Principles and Standards for Quality Charter School Authorizing. We believe that quality sponsors provide their schools with maximum flexibility and space for innovation while holding them accountable for performance, fisical integrity and sound governance. If a school performs well, it should rarely see or hear from its sponsor beyond basic compliance issues (mandated—sometimes to excess—by state law) and required school site visits. If, however, the school struggles to deliver academic achievement, faces financial problems, or encounters other serious operational deficiencies, the sponsor has a solemn duty to push it hard to make needed changes. Under Ohio law, such pressure may include probation and closure—and threatening to take such actions if remedies are not forthcoming. Quality sponsors carry out these threats if a school fails (or refuses) to improve over time. Nothing is worse for children than to allow them to languish in a failed school. As a sponsor, Fordham has closed four schools since 2005; fortunately, these closures were done amicably and in partnership with the governing boards of each school involved.

Financing our sponsorship efforts

In contrast to many Ohio charter authorizers, we believe it is inappropriate, unethical, and sometimes immoral for sponsors to sell any supplemental services to the schools they authorize. Whether these services take the form of business management, instructional support, special education, professional development, or something else, such an arrangement creates an inherent conflict of interest, invites profiteering by sponsors and their agents, and pressures schools to obtain services from entities that wield enormous power over their very existence. It also creates strong economic incentives for sponsors to turn a blind eye to poor school performance.

Fordham doesn’t “make money” as a sponsor. To the contrary. We’re gradually losing our shirts. While Ohio allows authorizers to levy sponsorship fees of up to three percent of a school’s state funding, Fordham charges just two percent while investing north of $100,000 a year in its sponsorship operations. That’s money taken from our own endowment or raised from external funders. (See our annual report here.) Further, we reward performance, providing performance rebates based on a school’s academic rating and calibrated to its enrollment.

New statewide sponsor entity

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. For months we’ve been exploring with six other sponsoring organizations that also subscribe to NACSA’s quality principles the joint creation of a new sponsor entity with the scale and resources necessary to advance the improvement of Ohio’s charter program. (Those organizations are: the Educational Service Center of Central Ohio, Montgomery County Educational Service Center, Dayton Public Schools, Reynoldsburg City Schools, Loveland City Schools, and the Columbus City Schools. Others are also considering joining this venture.)

This undertaking has been driven by the need for stronger quality in a time of tighter resources. We explained our reasoning to the State Board of Education in May 2010 in these words:

For most sponsors in Ohio, quality sponsorship costs more than school fees can generate. Consider the numbers for a moment—the state has sixty-seven active sponsors. Two of these—the Lucas County ESC and the Ohio Council of Community Schools (both based in Toledo)—collectively authorize one third of all Ohio charter schools. The state’s remaining sixty-five sponsors authorize on average three schools each. Fifty-two sponsors have two or fewer. Yet quality sponsorship costs money to deliver. For example, sponsors need the resources to meet the legal costs of closing a school, which can accrue quickly.

It is because of limited resources for sponsors and the need for scale and shared expertise that the Thomas B. Fordham Foundation and the Educational Service Center of Central Ohio (ESCCO) are proposing—with planning-grant support from the National Association of Charter School Authorizers—to launch a new statewide charter school sponsor. Both ESCCO and Fordham have developed the tools, resources, and expertise needed for quality authorizing, in Fordham’s case with help from the Bill and Melinda Gates Foundation. We are willing to cede these assets to a new entity that we believe can help consolidate and improve Ohio’s charter school sponsorship landscape.

Fordham remains firmly committed to advancing educational excellence in Ohio and nationally. We embrace this struggle openly. Charter schools are an important tool in the reform struggle, and for more than a decade we have put our money, time, and energy where our mouth is.

Not everything we’ve done in the Buckeye State (or elsewhere) has worked. (We’ve tried to be candid and forthcoming about the misfires, too.) Through it all, however, we’ve been motivated by the need to improve educational options for needy kids. We are honored to work with policymakers, others in the state’s charter sector, and with district educators who are committed to creating, leading, supporting, and sponsoring great charter schools that embrace high standards of excellence. As the General Assembly winds up its crucial work on the state’s biennial budget, we are proud to call these individuals allies and friends.

* Sponsors (aka authorizers) are the organizations responsible for helping birth charters, for holding them accountable over time for their performance, for providing technical assistance and guidance when appropriate, and—if necessary—for closing schools that no longer work for children.

This piece originally appeared (in a slightly different format) in the Ohio Education Gadfly and on Fordham’s Flypaper blog. To subscribe to the Ohio Education Gadfly, click here; to subscribe to Flypaper, click here.

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News Analysis: Detroit school reform: Take 1,362

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 plans to recruit the talent needed to staff schools in the EAS. But it’s an encouraging sign that the Motor City may have some life left after all.

Click to play

Click to listen to commentary on Synder's reform plan from the Education Gadfly Show podcast

Rick Snyder to announce sweeping DPS reforms Monday,” by David Jesse, Chastity Pratt Dawsey, and Chris Christoff, Detroit Free Press, June 19, 2011.

New hope for state's hopeless schools,” The Detroit News, June 21, 2011.

Plan aims to revitalize Detroit schools,” The Associated Press, June 20, 2011.

Detroit Announces New Authority For Failing Schools,” by Joy Resmovits, The Huffington Post, June 20, 2011.

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Short Reviews

Review: METCO Merits More: The History and Status of METCO
By Alicia Goldberg

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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Review: Too Simple to Fail: A Case for Educational Change
By Josh Pierson

Too Simple to Fail coverThis 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 thing to do from time to time.

R. Barker Bausell, Too Simple to Fail: The Case for Educational Change, (New York, NY: Oxford University Press, 2011).

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

Eliminating the Achievement Gap coverThis 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.

Robin Lake and Alex Hernandez, “Eliminating the Achievement Gap: A White Paper on How Charter Schools Can Help District Leaders,” (Seattle, WA: Center on Reinventing Public Education, June 2011).

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From The Web

The Education Gadfly Show Podcast: Mike and Richard play cops and robbers

Mike sits down with guest host Richard (Lee) Colvin of Ed Sector to hash out what Michigan’s new reform efforts may mean for Detroit, what the CCSSO accountability blueprint may mean for the feds, and what NAEP history scores may mean for the country. Amber puts a magnifying glass on teacher pensions in charter schools and Chris crosses the pond to play Cowboys and Indians.

The Education Gadfly
Click to listen to the podcast on our website. You can also download the podcast here or subscribe on iTunes here.

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Flypaper's Finest: Higher spending associated with higher rates of special-education identification 
By Mike Petrilli

A few weeks ago, we at Fordham released a short analysis, Shifting Trends in Special Education. We noticed that some states, like Massachusetts and New York, identified almost twice as many students as needing special education as those in other states, like Texas and California.…

I couldn’t help but wonder if per-pupil school spending (adjusted for cost of living) was driving the differences. After all, you don’t have to be a rocket scientist to notice that Massachusetts and New York spend a ton of money on their schools and California—similar to them in so many other ways—spends a fraction as much.* Perhaps a sense of scarcity in resource-starved states like California encourages school districts to avoid identifying lots of kids for pricey special education services.…

The Education Gadfly
Click to read the rest on Flypaper.

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Flypaper's Finest: When you actually know the topic about which The Economist writes
By Daniela Fairchild 

From Austin, The Economist explains that “many cities and states, struggling to make up budget shortfalls, have put schools on the chopping block.” These cuts will add up to billions and will be “readily apparent when schools reopen in the autumn—among those that do re-open, that is.”

This melodramatic proclamation—both unjust and only a bit ignorant in its assertion—doesn’t help readers understand the complexities of America’s public-school spending leviathan. Few schools are slated to close in the coming year due strictly to budget cuts (to low student achievement, district consolidation, underenrollment, sure). Schools aren’t being shuttered willy-nilly, leaving little Johnnies and little Susies without. And it isn’t simply budget cuts brought on by a slackening economy that have forced this hand.…

The Education Gadfly
Click to read the rest on Flypaper.

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Extras

Briefly Noted: Rethinking "local control"

  • Education governance may not be a sexy topic; but without major changes to our current model, all the incremental reforms thus far undertaken may be for naught. Where do we go from here and how do we get there? Checker Finn begins to articulate what governance should look like tomorrow in this Defining Ideas piece.
  • This week, Florida reminds us all that patience is a virtue. After an interminable search process, the Sunshine State’s board of education voted unanimously to hire Gerard Robinson as the state’s education commissioner. A fantastic choice—and worth the wait.
  • David McCullough moves from author to subject in last weekend’s Wall Street Journal interview. It’s laced with his incisive thoughts on American K-12 education, and includes some great zingers like, “textbooks have become ‘so politically correct as to be comic.’”
  • KIPP recently learned that about one-third of its first middle-school cohort went on to graduate from college (within six years of enrolling). Curious as to what KIPP is doing with that information? Check out this interview between Rick Hess and KIPP CEO Richard Barth for the answer. (Hint: As part of their efforts, KIPP has teamed up with the UNCF and the Corporation for Enterprise Development to launch the Partnership for College Completion.)
  • For those gunning to teach in D.C., be on notice that resumes, interview suits, and reference forms are no longer enough. The District now requires an “audition component”—a videotaped lesson plan executed by the applicant—to be eligible to apply.
  • Duncan Hunter’s and John Kline’s recently penned education bill, which would grease (and in some cases unlock) doors for quality charter programs looking to expand, has passed through committee with bipartisan backing.
  • With his gruff, “I do what I want” demeanor, Chris Christie definitely failed “Constituent Relations 101.” But that’s what makes him so engaging if not always endearing. Watch this video, “Where I send my kid to school is none of your business,” as a great case-in-point.

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Announcement: Do you Mind (Trust)?

The Mind Trust—an Indianapolis-based organization dedicated to improving K-12 education through entrepreneurial ventures—is searching for a new VP of education initiatives. If you’re ready to lead the group’s core education programming, including its new charter-school incubator program and renowned education-entrepreneur fellowship, apply here.

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Announcement: Work those teacher incentives

Do teacher incentives actually make schools better? According to new research from Thomas Ahn, the answer is a resounding “yes.” If you’d like to learn more, head to AEI on June 28, from 11:30AM to 1:00PM—Ahn will be presenting his findings along with colleague Jacob Vigdor. Register here.

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Fordham's featured publication: Golden Peaks and Perilous Cliffs: Rethinking Ohio's Teacher Pension System

Golden peaks and perilous cliffs cover

In this 2008 Fordham Institute report, nationally renowned economists Robert Costrell and Mike Podgursky (co-author, with Amanda Olberg, of our new report on charter-school pensions) illuminate some of the serious challenges facing Ohio’s State Teacher Retirement System (STRS). Among the report’s findings are serious questions about the system’s long-term health and sustainability. STRS is becoming increasingly expensive for all contributors. Even with a total employee/employer contribution of 24 percent, STRS’s unfunded liability is $19.4 billion, which represents a debt of over $4,300 per Ohio household. This liability far exceeds that of the state’s other four public pension systems combined, despite the fact that STRS’s membership is little more than one-third of those systems. Further, the system’s lack of transparency and perverse incentives almost certainly hinder rather than help in the recruitment and retention of a highly qualified teaching workforce. Read on to learn more.

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The Education Gadfly is published weekly (ordinarily on Thursdays), with occasional breaks, by the Thomas B. Fordham Institute. Regular contributors include Daniela Fairchild, Amy Fagan, Chester E. Finn, Jr., Alicia Goldberg, Chris Irvine, Jamie Davies O’Leary, Emmy Partin, Marena Perkins, Michael J. Petrilli, Josh Pierson, Terry Ryan, Janie Scull, Gerilyn Slicker, Chris Tessone, and Amber Winkler. Have something to say? Email us at thegadfly@edexcellence.net. Find archived issues or other reviews of reports and books here.

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The Thomas B. Fordham Institute is a nonprofit organization that conducts research, issues publications, and directs action projects in elementary and secondary education reform at the national level and in Ohio, with a special emphasis on our hometown of Dayton. (For Ohio news, check out our Ohio Education Gadfly, published bi-weekly, ordinarily on Wednesdays.) The Institute is neither connected with nor sponsored by Fordham University.

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