Teacher pensions multiply funding inequities for high-poverty schools

If educational equity is an issue you care about, then you already know that more experienced teachers tend to cluster in lower-poverty schools, creating a funding gap between poor and rich schools.

Now, a study by Teacherpensions.org and Bellwether Education Partners reveals that these gaps are actually significantly wider than previously known. The culprit? Much higher pension costs associated with teachers in richer schools. Researcher Max Marchitello gained access to a decade’s-worth of detailed teacher salary data in Illinois.

“After pulling the data, I aggregated educator salaries to the school level and calculated the pension contributions using the state’s actual contribution rates. I then paired that data with each school’s student demographics. This allowed me to track school-level salary and pension spending compared with student poverty rates and student racial demographics.”

His findings are startling. The combined impact Illinois Teachers’ Retirement System and Chicago Teachers’ Pension Fund pension spending increases school funding gaps between high- and low-poverty schools by more than 200 percent, Marchitello found.

“In 2012, low-poverty schools (in Illinois) spent $582 more per pupil on salaries than high-poverty schools. Adding in pensions increases the gap to $1,243 per pupil. This happens because high-poverty schools only spent $492 per pupil on pensions, while low-poverty schools spent $1,153. That is a $661 disparity.”

The study’s findings have potentially profound implications. They tell us that longstanding concerns about public education funding inequities have been based on incomplete data. The gaps that concern us all are, in fact, significantly worse than previously reported. Fixing the funding inequity problem is a tough, almost intractable challenge. But as policymakers and advocates work on it, they should be working from a complete data set.

“Pension spending is school spending. Therefore, how much states and districts spend on teacher retirement should be included when determining school funding levels to ensure that all students receive an equitably funded education.”

While the study examined only Illinois data, there’s every reason to believe that the same holds true in all 50 states, including Colorado. Higher-paid teachers are disproportionately found in low-poverty schools everywhere. Therefore, pension spending in rich schools is higher than in poor schools everywhere.

Many kudos to Bellwether and Teacherpensions.org for this important work.

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