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Report Finds K-12 Pension Debt Costs Threaten Education Equity in California

BEREKELY, Calif., Jan. 31, 2023 /PRNewswire/ -- Equable Institute and Opportunity Institute have released new research exploring the effect of teacher pension debt on education resource equity in California.

The report, titled Pension Debt Challenges for Equity in Education: The Effect of Teacher Unfunded Liability Costs on K?12 Education Funding in California, found that growing unfunded pension liabilities for teachers and other school employees have silently undermined California's ability to improve education outcomes for students and inequitable impacts on teachers through growing costs and regressive funding mechanisms that subsidize wealthy districts.

"School districts have faced growing pension costs that have outpaced state and local K-12 spending over the past decade. But only a few wealthy communities have been able to handle those contribution rate increases with parcel tax adjustments or other revenues sources," says Equable executive director Anthony Randazzo. "A 2014 law called AB1469 has put most of the growth in CalSTRS pension debt costs on local communities, many of which report having to reduce services in some way to pay for growing pension costs?which had particularly notable effects in exacerbating learning losses during the pandemic. At the same time, the state's regressive pension subsidy is providing more money to wealthier school districts that have the ability to pay teachers more and retain them longer."

Specifically, the report finds:

Opportunity Institute and Equable Institute note that without increased transparency on how public school employee retirement benefits impact overall school budgets, pension debt costs will continue to exacerbate already existing education resource Inequities.

"Transparency should lead to changes in how retirement benefits are financed," stated Maria Echaveste, President of the Opportunity Institute. "This is necessary to ensure that current and future teachers are able to retire with dignity, but equally important, to make sure students in low-resourced schools have the same access to enrichment programs like music and art, state of the art technology, and are able to attract highly qualified teachers with better compensation--these are examples of budget items that get cut when pension costs overwhelm the local school district budget."

This report is one of four reports detailing the impact of unique pension debt challenges facing state education budgets across the U.S. Please visit pensionequityineducation.org to download California's report along with reports for Texas, Florida, and Ohio.

Equable Institute and Opportunity Institute will be hosting webinars covering the findings of each of the reports in March 2023. Click here to sign up to be notified when registration opens.

About Opportunity Institute

The Opportunity Institute (OI) is a national education policy organization that focuses broadly on cradle-to-career education policy, practice issues, and adjacent areas of social policy. Our work bridges the domains of policy, research, advocacy, and addresses equity in three main areas of work: "Whole Child" equity; resource equity; equity indicators.

About Equable Institute

Equable is a bipartisan non-profit that works with public retirement system stakeholders to solve complex pension funding challenges with data-driven solutions. We exist to support public sector workers in understanding how their retirement systems can be improved, and to help state and local governments find ways to both fix threats to municipal finance stability and ensure the retirement security of all public servants.

SOURCE Equable Institute

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News published on 31 january 2023 at 11:00 and distributed by: