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The LA Teachers Strike Could Mean Trouble for NYC

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The LA Teachers Strike Could Mean Trouble for NYC

New York Post January 25, 2019
Urban PolicyNYCEducation
Public SectorPension ReformThe Role of Unions

After a weeklong walkout, Los Angeles’ 31,000 teachers ended their strike victoriously on Tuesday. The union got everything it wanted — even if it’s anyone’s guess how it will all be paid for.

The teachers walked out, ­because the district didn’t have enough money to meet the union’s demands. The political will to spend more on education was apparently strong, but the public fisc was weak, to say the least.

In Los Angeles, as in New York, expensive historical retirement-benefit promises are consuming an ever greater share of education spending and limiting the districts’ financial flexibility.

The result: Despite the fact that everyone in Los Angeles — the union, the district, the mayor, the celebrities and the new governor, Gavin Newsom — wanted to spend more money on LA schools, there was still a strike. The district just couldn’t see how it could financially and legally do what ­everyone wanted it to do.

But the strike forced the Los Angeles Unified School District to give up on its notions of fiscal prudence. The union ran the table, winning a 6 percent raise for teachers, caps on class sizes, full-time nurses for every school and librarians for every middle and high school by 2020.

Expensive items, all.

Not surprisingly, neither Mayor Eric Garcetti, Superintendent Austin Beutner nor union leader Alex Caputo-Pearl has offered any details on how the district will pay for all these things. In short, they are all crossing their fingers and hoping for a state bailout if they can’t come up with the money. “We’re spending every nickel we have,” Beutner said. “It’s all in for schools.”

The unreported backstory here is that pensions and retiree health care commitments are putting the squeeze on school district budgets and education spending more generally. By one estimate, in just two years, spending on retirement benefits will ­devour a third of the LA Unified’s budget.

This problem isn’t unique to Los Angeles. As the costs for pensions and retiree health care for education employees increase, less and less money is available for schools in the here and now.

Manhattan Institute scholar Josh McGee has found that teacher pensions are short an eye-watering half-trillion dollars nationally, and as contributions to those systems have risen, spending on everything from salaries to facilities to instructional supplies has plunged.

In New York City, public-employee pension and retiree health care costs have been consuming more of the city’s budget. Pension spending is now 11 percent of the city’s overall budget. And the city’s unfunded retiree health care liability is $84 billion.

To make matters worse, increasing teacher salaries compounds the problem, by driving pension costs even higher in the future. Consequently, Mayor Bill de Blasio’s generous first-term teacher contract will have other implications down the road.

Unless taxes can be increased or new debt issued, these legacy costs will continue to strain the nation’s ability to underwrite new educational spending.

Another consequence is more conflict over education spending, as we saw in LA. Teachers and their unions want higher salaries today, but school districts and states are constrained, because they must pay for past promises to previous generations of educators. So while education spending increases, little appears to change.

This is because new education dollars don’t go for textbooks, ­facilities maintenance, new computers or teacher salaries but to pay off pension debt and ­retiree health care costs.

The predictable result is frustration. Teachers feel underpaid. Schools appear understaffed. Parents are dissatisfied with school performance. And taxpayers wonder where all their money is going.

Another consequence is that greater spending on education is divorced from improved school performance. So don’t expect that all the new spending on LA’s schools to produce better academic outcomes for the 600,000 students in the district.

We live in a confusing new world where we are paying for the past at the expense of the future.

This piece originally appeared at the New York Post


Daniel DiSalvo is a senior fellow at the Manhattan Institute, an associate professor of political science at the City College Of New York (CUNY), and author of Government Against Itself: Public Union Power and Its Consequences (2015). Follow him on Twitter here.

Photo by David McNew / Getty Images