School Finance

Dating to 1920, Ohio's State Teacher Retirement System (STRS) is the oldest of the Buckeye State's five public pension systems. It now covers close to half a million members--active, inactive, and retired--or one member for every ten Ohio households.

Despite its long history and prodigious size, all is not well with Ohio's teacher pension system. In this Fordham Institute report, nationally renowned economists Robert Costrell and Mike Podgursky illuminate some of the serious challenges facing STRS.

Among the report's findings are serious questions about the system's long-term health and sustainability. STRS is becoming increasingly expensive for all contributors. Employees contribute 10 percent of their earnings to the pension fund and employers contribute 14 percent, for a total contribution of 24 percent. This total has drifted up from 10 percent since 1945. Yet this is still insufficient to meet the state's funding goals: the system's unfunded liability is $19.4 billion, which represents a debt of over $4,300 per Ohio household. This liability far exceeds that of the state's other four public pension systems combined, despite the fact that STRS's membership is little more than one-third of those systems.

A system that is so large and increasingly costly should meet basic public policy requirements of transparency and efficiency. Sadly, the system fails to meet either requirement: it lacks transparency, and its incentives are perverse. As a result, Ohio's pension system almost certainly hinders rather than helps in the recruitment and retention of a highly qualified teaching workforce.

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Everyone agrees that education funding today is a mess. But a broad, bipartisan coalition now urges a new method of funding our public schools--one that finally ensures the students who need the most receive it, that empowers school leaders to make key decisions, and that opens the door to public school choice. It's a 100 percent solution to the most pressing problems in public school funding--and it's called Weighted Student Funding.

Of all the controversies swirling around the nation?s charter schools, none is more hotly contested than the debate over funding. Into the fray leaps Charter School Funding: Inequity's Next Frontier, the most comprehensive and rigorous study ever undertaken of how public charter schools are funded, state by state, and how their revenues measure up to dollars received by district-run schools.

In just more than five years, Mary Anne Stanton has led 13 Catholic schools from high-poverty Washington, D.C. neighborhoods into a consortium that has not only strengthened each school's financial health, but has also greatly improved the academic performance of the children the schools are charged with educating. To get there, she's installed a new standards-based curriculum, shaken up old bureaucratic approaches, and streamlined operations. In its latest Fwd: Arresting Insights in Education, the Thomas B. Fordham Foundation presents a compelling story of just how much change can be made by one determined school leader with a vision.

This report, prepared for the Thomas B. Fordham Institute by Public Impact, compares charter school funding and district school funding. It finds that charter schools are under-funded compared to their district counterparts, even after accounting for differences in students and grade levels. These findings should be taken seriously by those who argue that charter schools drain funds from district schools.

Prepared for the Thomas B. Fordham Institute By Public Impact

How much government aid do parochial schools and their students actually receive? Connell finds that public aid flows to church-affiliated schools through many channels, though amounts vary greatly from state to state. This report is especially timely in light of the Supreme Court's important decision upholding government aid to religious schools.

With OECD data, Walberg shows that the United States' educational system is the "least productive in the developed world."

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