The American public school system has never been in worse shape. Between declining standardized test scores, worsening graduation rates and rapidly fleeing middle-class students, who are increasingly turning to charter schools, the public education system of the United States could fairly be described as being in a state of crisis.
Now, the state of Kentucky is laying one more straw on the already strained back of the country’s public ed sector. In a recent article in the New York Times, it was revealed that the state of Kentucky’s public pension system, of which the teachers’ pension is the largest part, may be underfunded by up to $85 billion. Restated, the teachers pension system is only 15 to 30 percent funded, meaning that it is in a state of imminent crisis.
But the state of Kentucky is not alone. Teachers’ pensions systems ranging from Illinois to New Jersey are facing similarly dire circumstances. The upshot is that these state governments, if they aren’t already scrambling for an ad-hoc solution to a structural problem of their own doing, will soon be facing the kinds of choices that only a bankruptcy court may be able to resolve. And if history is any guide, municipal bankruptcies – there’s never been an entire state that has yet reached total insolvency – often lead to the near total destruction of the public school systems under their jurisdiction. We can see this in places like Detroit and Stockton, where entire school districts often don’t even meet the most basic levels of proficiency on standardized tests.
Meanwhile in Kentucky, the taxpayers will be on the hook, in 2018, for over $2 billion in direct funding that will be needed to keep that state’s teachers’ pension afloat. But this already painful measure will only be a temporary fix. The taxpayer contribution to the teachers’ pension will continue to sharply rise in the years to come, as the baby boomers retire, straining a system that was designed for many workers and only a few retirees.