Today, Fox's The Five suggested teachers' pensions have led to budget problems for school districts and are to blame for the increased yearly school supplies spending parents are seeing this year. But decreased revenues and state and local budget cuts are causing school funding to shrink, not pensions.
The National Retail Federation released a survey last month estimating that parents of K-12 students will spend around $688 on their children's back-to-school supplies, up from $603 the year before. The hosts of The Five used this news to launch Fox's latest assault on pensions for public employees.
During the August 22 edition of the show, co-host Dana Perino suggested the reason parents are being required to provide more school supplies for their children is partly because of "the squeeze that a lot of school districts feel because of pensions." Co-host Eric Bolling continued this line of attack by claiming that "the school districts are getting crushed by pensions" because teachers "stay on tenure, they continue to get benefits," and the school districts "can't keep up."
However, public pensions are not the cause of local school districts' budget woes.
A May 2011 report by the Center for Budget Policy and Priorities (CBPP) explicitly showed that "long-term pension shortfalls are not the cause of current state fiscal problems" and explained "[s]tate economies and budgets continue to struggle because of shrunken revenues and higher needs."
Additionally, the report noted:
The long-term nature of the problem means that most state and local governments can fashion a plan that postpones significant additional pressure on state budgets for a few years until revenues have recovered from the current downturn.
In a similar, but more recent, report, CBPP found that "states' ability to fund services remains hobbled by slow economic growth." The report went on explain that state "budget gaps result principally from weak tax collections" because of "the largest collapse in state revenues on record" due to the recession. The loss of revenue combined with the increased education obligations for the states have led to budgetary problems. From the report:
Meanwhile, states' education and health care obligations continue to grow. States expect to educate 540,000 more K-12 students and 2.5 million more public college and university students in the upcoming school year than in 2007-08.
Like the CBPP, a March 6, 2011, McClatchy article, citing Boston College's Center for Retirement Research, stated that public pension obligations account for a very small percentage of spending and are not the cause of states' budget problems:
Pension contributions from state and local employers aren't blowing up budgets. They amount to just 2.9 percent of state spending, on average, according to the National Association of State Retirement Administrators. The Center for Retirement Research at Boston College puts the figure a bit higher at 3.8 percent.
Though there's no direct comparison, state and local pension contributions approximate the burden shouldered by private companies. The nonpartisan Employee Benefit Research Institute estimates that retirement funding for private employers amounts to about 3.5 percent of employee compensation.
Nor are state and local government pension funds broke. They're underfunded, in large measure because -- like the investments held in 401(k) plans by American private-sector employees -- they sunk along with the entire stock market during the Great Recession of 2007-2009. And like 401(k) plans, the investments made by public-sector pension plans are increasingly on firmer footing as the rising tide on Wall Street lifts all boats.
Yet Fox's attack continues on middle-income teachers and other public employees who worked hard to contribute part of their pay toward their pensions throughout the years so they could live modestly at retirement, and this is just one front in their war on unions and workers.