Hiding the Bill for Teacher Pensions

Michael Regnier

The debate about charter school funding was split wide open last week when a new study found that charter schools receive much less public support per pupil, when accounting for the full value of retirement promises to district school teachers. The valuation matters because the City is not saving enough for today’s workers’ future benefits, instead effectively running up a credit card bill.

The new study, by Harry Wilson and Jonathan Trichter, factors in that credit card balance. Using the study’s low estimates, and adding in charter schools’ 2010 funding increase, charter schools receive $2,078 less public support per-pupil if they are in a DOE building, and $5,086 less per pupil if they are not. See the Charter Center’s briefing here.

Today, the New York City Independent Budget Office (IBO) offered a rare public reply, to argue that its own analyses on the subject (1, 2) had not been “flawed” per se. Blogging for the IBO, Doug Turetsky, the IBO’s Chief of Staff/Communications Director, responds that the IBO’s focus was strictly “the current level of actual public spending in support of charters and traditional schools in a given school year.”* Here’s the problem: while the city will make catch-up payments to teachers’ retirements later, district schools are benefiting from its teachers today. So any snapshot comparison of “public support” needs to include all the expenses that the City is accruing to attract and retain its teaching force.

Cities, like too many credit card holders, tend to think short-term. They weigh the value of a purchase against their next minimum payment, not its full cost. But when the card is only used to help one type of public school, it isn’t fair to hide the bill.

Finally, don’t forget that this entire disagreement only concerns 50% of charter school students. The IBO agrees that charter students in private buildings – 35,000 of them this year – receive significantly less public support than district school students.

*Turetsky also suggests a hypothetical scenario: if NYC fully funded its teacher payments, he says, charter funding would go up by formula, potentially enough to make charter schools over-funded. It’s a clever argument, but too clever by half. The public debate is about equity in today’s world, where charter school funding isn’t actually rising, while district teachers—with guaranteed retirements–really are teaching students. Meanwhile, the charter funding “formula” is hardly guaranteed, having been set aside through a funding freeze for three years and counting.