Addressing Pension Debt and Other Hidden Inequities in School Funding

Carrie Hahnel

 In many states across the country, education funding is at record levels thanks, in part, to federal COVID relief aid but also to the recent economic boom. Yet on the ground, many school districts feel like they’re in the midst of a recession. Here in California, some districts are even closing schools and others are using federal relief funds to plug budget holes — and that’s an emerging trend not unique to California. School district budget woes have a disproportionate effect on low-income, English learner, and BIPOC students, since these are the very students who benefit the most from the additional services that are often cut.

It would be easy to blame the pandemic for the budget crunch. After all, it costs more to address disrupted student learning, soaring mental health needs, and constantly evolving health and safety requirements. And to be sure, money matters: with adequate funding, districts can significantly improve student outcomes. But the problem isn’t just one of adequacy. We also need to look more deeply at the structural weaknesses in systems, policies, and practices undergirding normal school operations and view them through an equity lens. The fact is, there are hidden inequities eating away at school district budgets or diverting dollars from the highest-need schools and students, even in a progressively funded state like California.   

At the Opportunity Institute, we believe that any conversation about school finance needs to be a conversation about equity. Whether we’re talking about how to count students for purposes of allocating funding, how to adjust for declining enrollment, how to distribute money to school sites, or how to reduce skyrocketing pension debt, equity must be a lens through which we make decisions and craft policy.

The Opportunity Institute aims to surface evidence and foster conversation about how state and local education leaders can improve resource equity in our schools. We are working with advocates and researchers in California, Mississippi, New York, and other states to make sure that state and federal dollars are spent equitably to ensure BIPOC students, low-income students, English learners, and vulnerable students such as foster and homeless youth are centered in education decision-making and receive the highest quality education. 

But in addition to looking at spending, we are also looking at structural issues. One of those relates to teacher pensions. Today, teacher pension spending accounts for 14 percent of education spending nationally. California alone spent a whopping $10.5 billion on teacher pensions in 2020. The state’s spending on pensions has nearly tripled since 2010. That’s a lot of money, which could be fine if it meant that California could provide teachers with quality retirement benefits, sustain the system for the long term, and equitably distribute pension aid to districts needing it the most. Unfortunately, none of that is true. Moreover, pension spending consumes about 13 percent of California's total K-12 budget, crowding out other education spending. Making matters worse, those costs disproportionately harm lower-wealth communities and compound education inequities across the state.   

 The Opportunity Institute outlines the problems and potential solutions in a new report: Expensive, Inequitable, and Out of Reach: The Problems With California’s Teacher Pension System— and What Can Be Done.

As author Max Marchitello describes, the problem is not the pension itself: teachers deserve quality retirement benefits. The problem is that teacher pensions have become more expensive for state and local leaders to maintain, even as the actual benefit for teachers has gotten worse. In fact, teachers today work longer and receive less out of their retirement plan than the generations of teachers who came before them did. That’s not a big surprise, since most teacher retirement systems (including California’s state teacher retirement system, CalSTRS) were established in the early 20th century, at a time when labor markets, job changing, and student and teacher diversity looked radically different than they do today. But we don’t even have to go back that far to see that benefits have deteriorated in quality. As recently as 2014, state leaders reduced pension benefits for newer teachers. This was an effort to reduce costs, but it misguidedly came on the backs of teachers and their students.

 The current system is simply unsustainable. Even as education budgets grow, more and more dollars must go toward pension debt, leaving less for today’s students and teachers. And, these impacts are not felt equitably. With state pension debt crowding out other school spending, the districts most dependent on state aid are the ones who feel the pinch the most. Not surprisingly, these are the districts with less property wealth and higher student poverty. 

 Further widening the gap, the state’s contributions to the pension fund on behalf of districts are structured so that the state always pays the same percent, regardless of how much the teachers earn or how well-off the district may be. And we know that higher wealth communities pay their teachers more. We’re a state that takes its progressive income tax structure for granted, but we’ve never questioned our regressive pension structure.

 The solution is not to take away or reduce pension benefits, but instead, to reduce the debt, imagine alternatives that make sense for today’s teachers and students, and shift more state support to our highest-need communities. Those are not easy things to do, but they need to happen if we are to achieve adequate and equitable school funding. 

 We invite advocates and equity-minded leaders to join us in asking lawmakers how they plan to both safeguard educators’ retirement and also deal with pension debt so that more resources are freed up to serve today’s students and teachers — especially in the highest-need communities. This year’s state budget is a good place to start. With state revenues soaring, lawmakers could make a significant supplemental pension payment that would free up more funding for schools. Regardless of the solution, public education advocates, including BIPOC teachers, families, and community members, need to be at the table to ensure that pension decisions are made in the interests of equity, student success, and dignified retirement for our educators. Far from being mutually exclusive, these goals are in fact intertwined.

Communities as Architects of Public Policy, Not Objects of Public Policy

Rachel Mayes, Southern Echo & Winsome Waite, The Opportunity Institute

Over the last 12 months, our communities have lived through a series of contrasting occurrences:  Economic devastation among low-income households and yet record surpluses in the state budget; a violent insurrection at the U.S. Capitol to prevent the transfer of presidential power versus a return to competency in presidential leadership; the benefits of scientific education and process made real in the middle of a deadly pandemic even as would-be naysayers continue to flout science, reason, and the demands of equity in many of our states.  

Mississippi remains, as much as ever, a place where spirited new community leaders continue to rise in the image of freedom fighters like Fannie Lou Hamer and Ella Baker while the state remains locked in battle with the grown children of Jim Crow. For example, Mississippi replaced a key symbol of the Confederacy by adopting a new state flag in 2021, yet white nationalists have given up “dog whistles” for outright howling. Mississippians have gained historic and beneficial federal investments in public education, public infrastructure, and healthcare, but continue to face multi-front battles against entrenched white supremacy. The battles are manifested in many ways, such as the manufactured “outrage” over critical race theory, abortion rights, ongoing attacks on the integrity of the election system, and governmental disregard for the health of all.

As we stop for a moment of reflection, our next push forward for equity begins with a timely look back on the past.

Southern Echo was founded in 1989 to empower African American and low-wealth communities in Mississippi and the Southern Region with the knowledge, skills, and resources needed to demand accountability and to take action to secure political, education, economic, and environmental justice. Southern Echo uses an Intergenerational Model to empower communities, increase their understanding of important issues, and take action to improve their quality of life and wellbeing.  This includes learning about the historical roots of inequity, getting civically engaged and becoming the architects of public policy and not the objects of public policy.  

More than 1,500 miles from Mississippi, and 25 years after Southern Echo’s founding, the Opportunity Institute sprung to life. National leaders then were seeking new ways to support the advancement of equity in states through more strategic sharing of information, staffing and resources. Like Southern Echo, the Opportunity Institute supports practices and policies to advance equity for underserved communities – by integrating supports and services for the “whole child”.  This is accomplished by aggressively pursuing greater transparency and equity in the allocation of funding and resources, and by highlighting evidence-based approaches to serve communities. Southern Echo, a statewide organization, and the Opportunity Institute, a national organization – work together to effectuate impactful changes and to support policies and practices in specific school districts and their communities. Stakeholders in our targeted communities (Indianola, Greenville, and Moss Point) are knowledgeable of their needs and can impact policy by advancing effective strategies to meet their own needs.

The work of Southern Echo and the Opportunity Institute’s Whole Child Equity Adolescent Learning and Development Project is to put young people - with the help of all the adults around them - at the center of problem-solving and decision-making. Schools are the most pivotal and accessible locations for advancing equity in education and life within communities. We value the work of educators and recognize fully the enormous responsibility they carry. And we know that it takes more than the schoolhouse acting alone to advance academic learning and community wellbeing. This is why we build our efforts around the essential principles for learning and development: 1) strong and supportive developmental relationships; 2) environments that are safe and help people feel that they are valued and belong; 3) robust academic learning experiences grounded in social and emotional wellbeing; 4) culturally affirming development of habits, skills, and mindsets; and 5) integrated systems of support that attend to the holistic development of children and young people. 

The beauty of this work is that there is room for all of us– community organizers, lawmakers, parents, youth, educators, attorneys, stakeholders, marchers, protestors, and all others. The collective charge is to help all of us find the key roles we need to play in advancing equity, justice, and shared prosperity. These roles are deeply intertwined, and the strategy must include people of different ages and abilities. The recent passing of Congressman John Lewis is cause to remember that the Voting Rights Act finally passed Congress mere days after the march from Selma to Birmingham. Recall also that the historic march was only successful on its third attempt -- two previous efforts were thwarted, including the infamous “Bloody Sunday” attempt where a young John Lewis was brutally beaten.

After a late December respite, the lights are on in the statehouse in Jackson, and doors are open in the County seats and City Halls across Mississippi. We can take pride in the things that have undoubtedly changed for the better in the last year, as we acknowledge that there are tough fights ahead. Perhaps some of our victories may ultimately prove to be more superficial than structural, but we the people keep fighting.

The basic elements of the change we need are the same now as they were 60 years ago.  As Southern Echo and the Opportunity Institute collaborate with voices on the ground, we seek to ensure a common phrase often used in our work - “community must become the architects of public policy and not the objects of public policy.”

From Greenbacks to Backpacks: Transforming Public Education in Mississippi

Winsome Waite, The Opportunity Institute & Rachel Mayes, Southern Echo

In Mississippi, as in much of the United States, the re-opening of schools has been a study in contradictions: bus driver shortages amid huge federal investments in public education; bitter and uninformed backlashes against vaccination policies and “Critical Race Theory” amid broad consensus that students need positive and supportive learning environments. Recent National Assessment of Educational Progress (NAEP) results showed Mississippi’s commendable gains in reading and mathematics but lost their shine with the familiar and persistent race-based disparities reflected in those scores.

With the highest overall poverty rate in the nation, familiar divides persist among the wealthy and the poor in Mississippi. More politically connected communities thrive while lower-income areas worry whether the electrical grid will hold up to the first freeze, or how much longer their children will have to drink lead-tainted water. To be fair, much of this can also be seen at a national level: even in the worst of the pandemic, while poorer communities of color struggled to keep the electricity on, the national economy was busy minting new waves of white billionaires. Some billionaires even decided to shoot themselves into space to keep busy.  

The Hard Truth about Progress in Education

Back on earth, those of us who sat through webinars and presentations watched a bevy of national experts, better known for giving sound bites about “transforming education” than for offering much in the way of actual help, talk briefly about the depth and reach of race-based entrenchment and inequity before quickly transitioning to easy platitudes and truisms. The mind boggles to consider what would happen if they and the Rocketeers got together to focus on the real-life challenges of providing just and equitable learning opportunities for all children.

In reflecting on inequity, it is worth remembering that our collective “mixed bag” of school reopening experience is not by accident – it is by design. To change the design will require a good deal more than merely writing, delivering remarks, and pushing reports and toolkits out to those who have the responsibility of “doing.”  

It's not just the experts on webinars, either. Far too many education and government leaders continue to believe that simply making funds available for impacted communities will be sufficient to “fix” longstanding inequities. Particularly in COVID-ravaged communities, there is no question that federal rescue funding through the American Rescue Plan, the CARES Act, and related legislation was essential. There is also no question that inadequate attention has been given to how this funding can be used to uproot racial inequalities by strategically addressing the full range of needs of young people in places like the Mississippi Delta.

Of course, there was insufficient time, given the urgency and lethality of the pandemic and the tight timeframes in which districts had to develop plans for use of the federal Elementary and Secondary Emergency Relief (ESSER) funds, to strategically target the use of these funds on eradicating the various pernicious manifestations of American racism. Still, a good portion –most, even most of this failure is attributable not to the urgent timeframes of the pandemic but to ongoing, built-in systemic factors.

When those in charge of allocating resources are those who have benefitted personally from the uneven playing field, it is hard to envision funds being used to comprehensively support low-income communities of color. While there are indeed leaders willing to undertake the challenging work of advancing equity in underserved communities, they are working amid great and urgent need, with severe time constraints, limited staffing capacity, and intractable state and federal bureaucracies. Most do not last long in their positions.

This is why, as we say in our work, “it takes a village”: more people in positions of power, those with knowledge, expertise, and resources, must undertake the difficult work of more actively supporting the implementation of policy. Even those in research must begin to connect more deeply with the work in school districts and communities. We must get beyond merely talking about breaking down silos; we must collaborate as a community in the actual doing of the work.

A More Equitable Path

Even well-intentioned policy and ample funding, when disconnected from local priorities and knowledge of actual conditions and practices, do not create equitable change. Our states and localities are littered with examples of good policy gone stale due to lack of attention to people and practice.

The work of Southern Echo and the Opportunity Institute in Mississippi is to bring together policymakers, education leaders, and community to better connect broad-scale work with local needs and assets. “Transformation” in public education is indeed possible, but only with a deliberate focus on money, mindset, and movement.

Listening Carefully to Community

Over the past few months, our organizations have engaged in a series of listening sessions with families, youth, community members, educators, and businesses in Sunflower County. From this work, we are learning what individuals at a local level are prioritizing with regards to education. They want closer partnerships with schools, more resources within the community, opportunities for workforce training and sustainable employment, and a major focus on adolescents and teenagers – those in school and those that have dropped out. They want to center equity in all of this to ensure schools do not return to the old ways that did not work for many of their children.

The basic idea of “whole child” education – that the success of the system is tied to meeting the full array of students’ learning and developmental needs – is the essential premise of our work. We are excited to be partnering with superintendents, school administrators, community, and business leaders in Sunflower County to support the “whole child,” and aim to do the same with other low-income school districts in the state and elsewhere. The alternative —empty platitudes—should no longer be an option.

Digital Inclusivity in American Education

Nearly 20 million Americans still lack access to fixed broadband service. In rural areas the numbers are even more alarming: nearly one-fourth of the population doesn't have threshold speed internet services.

This digital divide results in too many children struggling to learn remotely, without access to the technology and high-speed internet they need.

Maria Echaveste joined Rep. Chrissy Houlahan (D-PA), co-chair of the Congressional Women in STEM Caucus, and Ed Chang, Executive Director of redefinED Atlanta, for a conversion about digital inclusivity in American education, hosted by Changing America.

The panelists discussed how we can tackle digital inclusivity, what steps we must take to create equal opportunity for students of all economic backgrounds and how as a country we put our education system on course for a successful future in the digital age.   

Maria touched on how the pandemic revealed for the first time to all Americans the uneven playing field in education equity and how the future is a digital future:

“Without access to the internet you will be limited in your opportunities...We electrified the country many many decades ago because we saw that as essential for bringing all Americans together and progressing. We need to think of internet access that way.” 

Check out the entire panel discussion at Changing America.

To Infinity and Beyond, Tour of Infinity Space Museum!

More than 40 participants of Southern Echo’s Science, Technology, Engineering, and Math (STEM) program participated in a tour of the Infinity Science Museum on June 25, 2021. The STEM program is a track in Southern Echo’s Youth Empowerment 4 Scholars (YES!), and its goal is to expose students from diverse backgrounds to STEM learning and technology.

Participants experienced the future exploration of Mars in the X-SPHERE-ience Theater, the Earth and Space Galleries simulators, artifacts, video theaters, Smithsonian-loaned artifacts, and a life sized, walk-through mockup of the International Space Station’s Destiny module. They learned about space suit technology, new space rockets, and pre-Apollo history. They also viewed a progression of NASA programs from Apollo and Gemini to the International Space Station and the new SLS program, designed to take the first humans to Mars.

Southern Echo will continue its STEM program by offering its ASTRO Camp beginning Thursday, July1, 2021. The virtual camp is opened to participants 8 to 18 years of age. The goal of Astro Camp is to inspire future scientists, astronauts, engineers, and mathematicians.

Tracey Milton, a participant, stated that the field trip exposed youth to a new world of science that they don’t typically get to see in their everyday lives. Milton also noted that youth participants were able to engage in hands-on science activities in a fun learning environment. According to Rachel Mayes, Executive Director of Southern Echo, Inc., “it is more important than ever that our young participants are exposed to and can see themselves in STEM fields of work.” Mayes continued stating, “Field trips like this move the horizon line for what’s possible. They can see that they really can be and do anything they put their minds to.”

Southern Echo’s STEM program will continue with STEM workshops, hands-on-activities (if permissible with COVID-19 guidelines), guest presenters, and additional tours. The STEM program will provide the mechanism whereby Southern Echo can make a comprehensive investment in the training of youth in Mississippi.
Southern Echo, Inc. (SE) is a comprehensive, intergenerational leadership organization whose primary goal is to empower grassroot community leaders to impact the formation and implementation of public policy.

Southern Echo aggressively educates and trains underrepresented minorities with the political, educational, economic, and environmental tools necessary to become community leaders. Southern Echo’s geographical area of concentration is the State of Mississippi and the southern region. For additional information about Southern Echo and its STEM program, call (601) 214-3601, or visit us at www.southernecho.org.

Opportunity Institute Awarded a California 100 Grant to Evaluate California’s Fiscal Future

The Opportunity Institute is pleased to announce that it is the recipient of a research award from California 100, an ambitious statewide initiative to envision and shape the long-term success of the state. The California 100 research award, along with technical assistance from the Institute For The Future, will enable the Opportunity Institute to research and identify how best to improve the state’s fiscal policy over the next century. The Opportunity Institute’s fellows, Carrie Hahnel and Patrick Murphy, will lead the research team this summer, which will involve an extensive evaluation of California state fiscal policies and trendspotting. 

“Too often in California and across the U.S. revenue and spending debates are solely focused on short-term goals of balancing a budget for a specific fiscal year. We are thrilled to be part of the California 100 Initiative and for the opportunity to shape the long term financial success and health of California,” said Murphy. 

The project will combine a review of historical public finance data to develop a picture of where California stands historically, as well as relative to other states. The team will also interview state policy experts for their perspective on California’s current fiscal status to inform key insights into what could be expected in the future. The Opportunity Institute will also review fiscal policies through an equity lens, aiming to identify how the costs and benefits of state fiscal policy are distributed across all Californians, as well as recommend how to improve fiscal policies to better tackle inequities. 

The research will be complete by December 2021, and will lead to a set of policy alternatives for the future of California. The policy alternatives will be developed in conjunction with research teams from 12 other issue areas, and will be coordinated by Henry Brady, director of research of the California 100 Initiative and former Dean of the Goldman School of Public Policy at the University of California Berkeley. “We are excited to work with our research partners that are international experts in their issue areas,” Brady noted. “We will not only develop a comprehensive knowledge base on various policy issues, but we will also offer actionable recommendations for the California 100 Commission and the larger public to consider.”

The California 100 Commission is a multi-generational advisory body that will develop recommendations for the state’s future and test those recommendations across a broad set of policy areas by directly engaging Californians. Karthick Ramakrishnan, executive director of the California 100 Initiative, is tasked with assembling and engaging the Commission, and ensuring that the research stream intersects with the initiative’s other activities including advanced technology, policy innovation, and stakeholder engagement.

“From climate change, to aging populations and rapid changes in industry, California will face enormous challenges in the years ahead,” Ramakrishnan noted. “We are fortunate to be able to draw on the deep talent of researchers in California to produce evidence and recommendations that will inform robust public engagement and set the state on a strong, long-term trajectory for success.”

About the California 100 Research Grants

California 100 is a new statewide initiative being incubated at the University of California and Stanford University focused on inspiring a vision and strategy for California’s next century that is innovative, sustainable, and equitable. The initiative will harness the talent of a diverse array of leaders through research, policy innovation, advanced technology, and stakeholder engagement. As part of its research stream of work, California 100 is sponsoring 13 research projects focused on the following issue areas: 

• Advanced technology and basic research

• Arts, culture, and entertainment

• Education

• Economic mobility, inequality and workforce

• Energy, environment and natural resources 

• Federalism and foreign policy

• Fiscal reform

• Governance, media, and civil society

• Health and wellness

• Housing and community development

• Immigrant integration

• Public safety and criminal justice reform

• Transportation and urban planning

For more information about California 100, please visit California100.org.