International Leadership Charter, which has a rocky history, is moving to its own space. (Riverdale Press)
All students at P.S. 368 in Harlem will get Arabic lessons twice a week, in a first. (NY1, Post, Daily News)
Advocates want the state to take more time to phase in more stringent diploma rules. (GothamSchools)
Parent activists are weighing political campaigns as they look toward Bloomberg’s exit. (GothamSchools)
A janitor was hit in the leg when teenagers sprayed the Lower East Side’s P.S. 2 with BB pellets. (Post)
Two new Success Academy charter schools in the Bronx attracted 30 applications for each spot. (Post)
A relatively new city private school is boosting enrollment by accepting some boarding students. (WSJ)
Channeling Obama, Mitt Romney said education was “the civil rights issue of our time.” (Times, WSJ)
Chicago teachers held a citywide rally for the first time in decades, against Mayor Emanuel. (Sun-Times)
Larry Littlefield
So what is causing the big fight between the Democratic, union-backed Mayor of Chicago and the teacher’s union? The city is on the verge of bankruptcy.
Why is the city on verge of bankruptcy? Retroactive pension enhancements, and past pension underfunding. The Mayor of Chicago recently warned that soaring pension costs and collapsing services will cause people to flee the city and the state of Illinois.
The Democratic Governor of Illinois pushed through big pension cuts for for EXISTING workers and retirees. With the near unanimous suppport of state legislators from both parties. They way he is doing it is to take retiree health insurance away from anyone who does not accept a smaller pensions. The response will probably be a lawsuit.
What is the difference between Chicago/Illinois and NYC. Well, our pensions are just as underfunded. But there taxpayers get more of the blame. We have the highest tax burden in the country, while Illinois was below average — and underfunding its pensions for years and years. In many years there were zero taxpayer contributions to the pension funds there. The Illinois income tax rate had been just 3 percent, recently raised to 5 percent, compared with a 10 percent rate state and local combined in NYC.
Here in NYC taxpayers have sacrificed hugely for the highest pension contributions in the U.S., but retroactive deals have left us in the same situation somehow.
Larry Littlefield
BTW, in case you are wondering, the places that are worst off with regard to pension funding are NYC, Rhode Island, New Jersey, Illinois, city plans in places such as Philadelphia. Pittsburgh, Detroit and Chicago, and teacher pension funds in states such as Oklahoma and West Virginia. Watch these places to see what might happen here.
The New York State pension funds, which also cover local government workers (including teachers) in the portion of New York State outside NYC, are among the best funded. How the city plans ended up so much worse off than the state with the same legislature making the rules for both — and taxpayers elsewhere in the state paying far less into the pensions — I don’t know.
California is somewhere in between. Although there is a lot of controvery there, they aren’t nearly as bad off as NYC.
Follow the Money
Seriously – seriously – are you an algorithm?
Larry Littlefield
One more point about Chicago Mayor Emmanuel. He inherited disaster from his predecessor, as most future politicians will. And yet he came into office with this whole education reform agenda, just like Mayor Bloomberg has. Was he nuts? It’s game over.
At least he has sobered up, and is now taking about the schools collapsing instead of improving and fighting with the union about falling inflation-adjusted wages and layoffs rather than all this other stuff.
You want public education? Move to…many fewer places than when parents fled the NYC schools in the 1970s. Homeschooling anyone?
Mr. Flerporillo
The only downside to John Liu not becoming the next mayor is that we won’t get to see the confused look on his union supporters’ faces when he continues Bloomberg’s policy of layoffs, attrition, and reduced services.
Larry Littlefield
I would have thought one of the candidates, or the union, would have objected when Bloomberg and the City Actuary announced plans to defer some required pension contributions into the next administration.
Mr. Flerporillo
It is surprising that at least Thompson didn’t pile onto that. Quinn obviously can’t, she’s beholden to Bloomberg. Presumably Liu can’t, either, because it’s his job to manage the (purportedly) $120 billion in the city’s pension funds (which he apparently does when he’s not poring over invoices submitted by tutoring companies), and he’s publicly staked the viability of the system on a rate of return that the actuary now says is too high. So Liu, who based his comptroller campaign on his experience as a former pension actuary, rejects the actuary’s recommendations. The thinking seems to be that the city “can’t afford” to revise the ROR assumptions, which is a truly scary statement on the city’s finances. And it only gets worse, as anyone who starts their 401K (a term I encourage the teachers here to google) too late in life knows.
Larry Littlefield
Thompson was the Comptroller during the period when many of the pension deals were done, and didn’t say anything when the cost of pension improvements was pegged as zero. He was Comptroller during the time the current pension hole opened up. So he has nothing to say, either.
Liu may be in charge of the pension funds now, but the disaster was already there when he arrived. Most people don’t get those subtleties, but certainly Thompson wouldn’t dare bring the pension situation up.
And that ex-state legislator who is running voted for all the deals up in Albany. Quinn and the Council had no say.
Bottom line — everybody’s guilty. Which is why no one brings it up.
Mr. Flerporillo
“Thompson was the Comptroller during the period when many of the pension deals were done”
And North was the pension actuary, wasn’t he? Long time kicking this can down the road.
Tiredofyout
Is this a teacher blog or is this a Littlefield and Flerpi blog?
When is enough enough?
Give someone else a chance.
Larry Littlefield
Yes, North was actuary during all the deals. He’ll be retiring with a retroactively enhanced pension soon. Meantime, Bloomberg News just posted an article going through many of the places with the worst pension problems, but one is missing. The only with higher taxpayer contributions than any of those mentioned.
I think both of these guys have a problem with enhancements. Can you imagine having such a problem? I really have no problem with this. I think they are both hung up on these enhancement problems and need immediate medical care.
Vote NO!
Larry, and Flerp
How do you two have this much time to spend at this site complaining about teachers, and their pensions?
Pensions are NOT the problem! The weak economy is..You should be focusing in ways to grow the economy, and not obsess over bringing other people down. That will only make things worse.
Batt
When you spend the day hung up on enhancements you have all the time in the world. I never spent one moment of my life ever questioning any other persons enhancement. I quess it a function of having nothing better to do. Ask them why they don’t spend any of their free time tutoring needy students.I know the answer and so do you.
They know how to use their hidden agenda to slant every conversation that takes place on this site. Its never about the subject.
Pogue
Help! I’ve mistakenly inserted myself into Larry and Flerp’s Bermuda Triangle of pension discussion. Wow, it’s cold in here.
Larry Littlefield
This is a post on a series of articles. I bring up other articles showing that one thing driving the conflict in an article cited is pension underfunding. And I get a rant that I have hijacked the discussion.
I post census data showing actual facts, and links to articles. Some others just toss out insults. People keep repeating “hidden agenda.” When the biggest hidden agenda of the past decade was a large increase in school funding that went not to education, as promised, but to pension enhancements, as the UFT probably planned all along.
You may not want to hear about it, but that’s too bad.
Batt
If you can’t stay on the topic and you rant and rave constantly about things you can’t ever change keep telling us but here is the secret, “Nobody cares but you and your best friend”.
Ill tell you whats too bad “Your hang up on enhancements”
I asked you yesterday to spend some of your free time and work with some kids who could use some positive effort in making their lives more productive but here you are trying to justify other peoples enhancements.
Is it that you are here just to get under teachers skin? Wow what an exciting way to go thru life!
You use articles and to you its evidence that you are right but there is so much more to life but you will never know.
Larry Littlefield
“If you can’t stay on the topic.”
I am on topic. There are a series of posts above this and a series below this and a series below this that do not interest me, and on which I provided no comment.
This post raised the issue of conflict of scarce fiscal resources in Chicago. I provided additional information on what is causing that fiscal scarcity in Chicago, the same thing that is doing so in New York.
You just don’t want to hear about it. But unfortunately, it is what has been driving and will be driving everything in public education for years. And being nasty isn’t going to prevent me from pointing that out.
And I did serve as a volunteer tutor in the schools some years back, as a matter of fact. Early 1990s.
Batt
Your topic and not anyones else’s. You just can’t stay into today not yesterday and not years ago. You worked in a school years ago wow so you can’t do it now because your so busy and you don’t have any free time.
Its funny Chicago, New York but there are plenty of places where your discussion just doesn’t matter.The only person driven with all this is you, truthfully nobody cares but you and thats because You are looking out for all of us. I get it, its all about you so feel free to keep up your unless comments and understand that we all get where your coming from. Stay on the topics discussed
Michael M. (parent still)
According to then-Chancellor Joel Klein, and presumably still the policy, beating up on teacher hiring, pay, and retention, equates to “the civil rights issue of our time.”
“Poor and minority students will never get their fair share of
educational opportunity — and are far more likely to lead unsuccessful
lives — until administrators and political leaders commit to
fundamentally changing the way teachers are recruited, rewarded, and
retained.”
– Joel Klein
“Pensions are NOT the problem! The weak economy is..”
Ah, I had forgotten about your expertise in economics. This is like telling somebody that it’s not the bullet lodged in their chest that’s the problem, but the gun. Noted. But let me try to explain this again in simple terms.
Why are pension costs out of control? Partly because the economy is not growing fast enough to allow the pension funds to earn the kind of return they need to meet their enormous obligations. Partly because of the enormity of the obligations, which would be huge even without the retroactive enhancements that Larry’s always talking about. And partly because of the city’s failure to fund the pensions in accordance with what reality dictates.
Note that these are all inter-related. Say you start a mutual fund for retirement, and your goal is to have $750,000 in it by the time you’re 65. 10 years later you show your 401k statements to an accountant, who tells you that you’re only on track for $500,000, and that if you want to get back on track for $750,000, you’ll have to start doubling the amount that you put into the fund each month. You ask your accountant how this could be. Would I be on track if the fund had performed better in the past? Would I be on track if I had contributed more money in the past? Would I be on track if I had set more realistic goals for retirement? Technically speaking, the answers are yes, yes, and yes. So what do you do? You have two choices: (1) double your contributions and find a way to reduce your living expenses accordingly, or (2) lower your expectations for retirement.
That’s a decent analogy to New York City’s pension funds, with one gigantic exception: The State Constitution bars New York City from lowering public employees’ expectations for retirement. It can increase its pension contributions and cut spending by the same amount. It can also play with the accounting and hope nobody complains. The city’s doing both.The city now spends 12% of its budget–$8 billion–on contributions to the pension funds. In 2002 it spent $1.3 billion. Why is it spending so much money now on pensions? It’s partly because of the market’s performance relative to the actuarial assumptions that the city’s contributions were based on. This also explains why the city spent so much less in the late 1990s, when market returns were insanely and unsustainably high. But it’s also partly because the pension obligations have increased, not because of an unexpected increase in the number of retirees, but because the retirement benefits of those retirees were retroactively enhanced. I don’t think this is actually disputed (although the amounts of the enhancements are disputed). For example, John Liu’s office released a report last year that listed the causes of “unanticipated” pension cost increases. The first cause was “lower investment returns,” which he estimated caused 48% of the increases. The second cause was benefit enhancements that went into effect in 2000, accounting for 40%. Benefit enhancements that went into effect after 2000 caused another 4% of the increase, he wrote. So 48% caused by the market, 44% by pension enhancements. That’s from John Liu, not Larry Littlefield. As much as the city’s spending on pensions now, it’s going to get worse, and that’s also not in dispute. The city’s actuary has recommended a revision in the funds’ annual rate-of-return assumption to 7% from 8%. The city isn’t following that recommendation because if it did, it would immediately blow another $2 BILLION hole in the budget. So, unable to deal with reality now, the city decided to deal with it later. This means that the city is intentionally underfunding the pensions today in hopes that it will be able to afford to make up that funding later. But the city knows that this will be even more costly in the long term, because anytime you shortchange the pension funds on contributions, there’s less money in the funds earning *any* return. It’s like deciding to underpay your mortgage payments today because you can’t afford to make the full payments, or to reduce your 401K contributions this year so you can afford to meet your mortgage. Unless you start making a lot more money or changing your spending habits, the difficulty in paying off your mortgage or accumulating enough money to retire will increase exponentially.We’re talking about BILLIONS of dollars annually here. And this is not some abstract argument about accounting and the future. This is already hitting New York City, and it will keep hitting us for many, many years. This is big, big money, and it’s why there are fewer teachers, firefighters, and police officers every year. This is why class sizes can’t come down, and why firehouses are closing. I understand why public employees don’t like to hear about it, but I would hope you’d understand why it’s important.
Larry Littlefield
Let’s look at the record. According to Census Bureau data from 2009 (2010 due soon), total NYC spending on teacher wages and benefits was $12,965 per student, compared with an average of $12,795 in the Downstate Suburbs. NYC’s spending had been much lower earlier. Problem solved?
Well, there is the fact that NYC’s spending instructional wages per student was $1,000 per student lower than the Downstate suburban average and its spending on benefits, including pensions, was much higher.
Since then pension costs have soared more, a teacher wage freeze has been imposed, the number of teachers has been cut, and Klein has resigned. All due to irrevocable decisions in the past. And because of those decisions Klein’s point, like all the reform drama, is pretty irrelevant.
After a long battle, NYC school spending did soar. And it all went to pension enhancements. So now the idea is since the past increase went to retirement benefits, another increase of a similar proportion is needed in the highest school spending state in the country? The extra money was supposed to go to teacher hiring, retention and pay. And it’s gone.
$ 12,965 $ 12,795
Tiredofyou
Sure your not on THE BIG BANG program.
B. Werder
Is it just me? This is fantastic stuff from Mr. Flerporillo and Larry Littlefield. Do either of you have a blog?
This work is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 United States License.