OHIO — A recent report by the Equable Institute in conjunction with the Opportunity Institute indicates money being spent to fund teacher retirement is interfering with the state’s ability to improve K-12 education outcomes.
What You Need To Know
- K-12 spending increased 27% while spending on retirement benefits jumped by 85% over two decades
- Retirement ages and cost of living were adjusted, while teachers were asked to pay more into the state retirement system
- Ohio’s exhausted ways to pay for teacher pension debt costs
Anthony Randazzo, Executive Director for the Equable Institute, said that this is a problem all over the country.
“They’re not getting the same kind of investment returns that they used to in the past, so there’s a need to put more money into teacher retirement systems,” said Randazzo. He added that this is also important because teachers haven’t gotten an inflation adjustment in years.
Still, the report noted there’s another problem. Spending on retirement benefits has outpaced K-12 spending between 2001 to 2020.
“The cost of providing retirement benefits had just grown a lot faster. It’s grown to 85% relative to 27% growth in K-12,” Randazzo said.
In an attempt to solve the problem, Randazzo said Ohio took away money going into the retirement system for healthcare benefits. Teachers were then asked to pay more into the system, while adjustments were made to retirement ages and costs of living.
At this point, Randazzo said the state’s exhausted its options on how to solve the problem.
The concern now is that the state will seek more money, but this time from school districts, which would intensify the existing problems with education equity, especially in low-income areas already suffering.
If the money doesn’t come from districts, the question is where will it come from to deal with the pension debt. “The state needs to consider whether or not it should be using general dollars to pay for an increased cost of living adjustment as opposed to just simply having the Teachers Retirement System issue that and come up with the dollars on its own.
“There’s no way that they can adjust fees or do anything on the margin to be able to pay for those additional benefits that teachers deserve,” said Randazzo.
