The Albany Times Union this weekend ran two, intrinsically linked, stories. Playing to suit, the Times Union failed to make the connection.
In the first story, the Times Union reported that New York taxpayer contributions to public employee pensions have risen another 11 to 12 percent over the prior year. The lavish public employee pension system of defined benefits, bloated with relatively young retirement ages and early retirement incentives, now consumes more than 20 percent of government payrolls. The extravagant pensions of police and firefighters eat up almost 29 percent of payroll.
The second story reported that New York per pupil spending topped the nation ringing in at $18,618 per student, per year. New York spending outpaced second place New Jersey by a full $2,000 per pupil. The national average is $10,615.
Proving that spending does not equal quality (or “compassion”) New York remains near the bottom in most measurements of academic achievement. For instance, New York ranks 38th among the 50 states in graduation rate. Despite massive spending fewer than 3 out of 4 students finishes high school, and only 1 in 3 graduates is considered, by the state Board of Regents, to be “college ready.”
So, in brief, New York spends more money than anyone on public K-12 education. The results of this spending range from inadequate to shameful.
The usual suspects lobby perpetually for more dollars – as if the finish line were in sight, and the finely tuned engine of education just needs a little more gas money to complete the race. The conversation that we don’t have enough of in New York is about the existing appropriations. Where does all the money go?
There is a great deal of variance from one district to another, but to use approximate and round numbers, about 75 percent of a district budget goes to personnel costs.
Of per pupil spending, just less than $14,000 goes to personnel. This would drop New York from first to seventh in national per pupil spending. With an average class size of about 22 students, this leaves about $300,000 per classroom for personnel expenditures. The average New York teacher salary tops $72,000 per year (with summers off!), so yes, top-heavy administration is a big problem – but we are getting off the topic.
Making the connection the Times Union failed to link, subtract another 20 percent off the per pupil personnel spending to account for pension obligations. The result is $2,800 per year per student is being paid for teachers who no longer teach. The leftover dollars, $11,200, drops New York down near the national average – and New York has a higher than average cost of living.
Pension costs are choking out dollars that taxpayers provide help elevate the state’s failing school.
If this were not bad enough there is, in the term of E. J. McMahon at the Empire Center of the Manhattan Institute, a “pension bomb” ticking amid the state’s finances.
New York is dealing with rising pension costs by deferring obligated payments. In 2010 New York deferred $250 million of the $1.6 billion pension contribution, and in 2011defered $635 million of the $2.1 billion contribution. From 2012 to 2018 the state expects to defer an additional $4.4 billion in mandated pension contributions.
Sustainability has become a favorite catchphrase in politics, but no one wants to apply it to the only meaningful place it is appropriate. If our financial situation “explodes” there will be no way to enforce sustainability through myriad other programs that have become so fashionable.
Public employee pensions are bankrupting governments from California to Wisconsin. In New York, we sit on a ticking time bomb that threatens not only our fiscal future, but our children’s education. This is a story that needs to be told. The Albany Times Union does no one any favors by refusing to follow the course of the fuse.