humbling harbinger

Squeezed by ballooning pension costs, charters cut programs

A Queens charter school that pays for pension costs directly out of its budget is cutting programs to afford pensions.
A Queens charter school that pays for pension costs directly out of its budget is cutting programs to afford pensions.

Stacey Gauthier at the Renaissance Charter School is worrying a lot these days — about money. This year she’s had to increase class sizes, cut the summer school program, and forgo hiring experienced teachers when an older teacher retires. Yet she still hasn’t cut enough to be able to afford the school’s rising pension costs, which have grown from $12,000 per teacher in 2004 to $21,000 per teacher this year.

Pension costs for city teachers have been rising steadily over the past decade, but for the most part the expenses have been hidden from individual schools, which rely on the city to cover all pension costs. Yet for a small number of charters schools like Renaissance that participate in the Teacher Retirement System (TRS) out of their own budgets, the ballooning price of a comfortable retirement has been acutely felt.

“We have another year to live,” Gauthier said. “We’re dipping into our savings now, which is okay, but if things don’t rebound, we won’t be financially viable.”

Although TRS costs have always been high relative to the private sector, their impact on charter school budgets has become especially burdensome since state lawmakers froze planned increases in charter school funding two years ago. (A breakdown of several charter schools’ pension and 401(k) payments is below the jump.)

The freeze made it harder for schools to pay their TRS contributions, which have increased by 10 percent since 2008. At a loss, schools said their pension payments are often coming at the expense of other school programs — a situation that the district schools could see themselves in if promised budget cuts are approved for next year.

“Our costs are growing astronomically,” said Vicki Zubovic, the managing director of development at the KIPP charter schools. “It’s becoming harder and harder to meet these needs.”

The TRS pension squeeze affects at least 12 charter schools in New York City. The rest offer some sort of 401(k) or 403(b) defined contribution plan in which employees contribute a portion of their salary to a fund and employers agree to match that amount up to a certain percentage.

The difference in cost between the two options is enormous.

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PHOTO: Nicholas Garcia
The more generous public pension plan costs much more per student than a slimmer 401k retirement option.

According to an analysis using the fiscal audits from 2008-2009, on average, non-TRS schools contributed about 2 percent of all payroll expenses to their pension funds. TRS schools contributed around 14 percent of all payroll expenses to the TRS. This comes down to a difference of over $1,400 per student that TRS schools must spend on pensions that other charters are free to direct elsewhere.

Citywide, pensions cost on average $2,000 per pupil — a higher figure than charter schools face because district teachers are generally older and because of the way the TRS accounts for charter school pension costs. Overall, pensions make up $2.1 billion, or 10 percent, of the DOE’s total budget of $21 billion.

Most charter schools in the TRS joined because they are “conversion” schools that transformed into charters from traditional public schools — and as a result were required by the state to keep the same union benefits afforded district school teachers. But a handful of charter schools that belong to TRS opted into the plan on their own.

School leaders said they wanted to offer their employees the same benefits offered by district schools. There is simply no way that a 401(k) plan can offer the benefits that the TRS promises, such as free retiree health care and a guaranteed yearly pension that gets paid whether the market is down or not.

“We knew going in we were going to offer the TRS,” said Leonard Goldberg, the principal of Opportunity Charter School. “It’s hard for a teacher who has five, ten years in a system to try working in a charter school if the charter school doesn’t offer the same benefit.”

Goldberg said that TRS membership has helped Opportunity meet its goal of attracting and retaining experienced teachers. The plan is expensive, he said. But he added, “We believe at the moment it’s worth the investment.”

To compete, some charter schools that don’t participate with TRS have tried to make their 401(k) plans as lucrative as possible.

Take the plan at KIPP S.T.A.R., the only one of the four New York City KIPP schools that is not in the TRS. KIPP S.T.A.R. matches 50 percent of employee contributions up to the federal limit of $16,500 per year. In addition, the school offers employees a partially subsidized health care plan.

Despite all this, KIPP officials conceded that this plan, which is generous by most standards, still can’t compete with the TRS.

Not all unionized charter schools participate in TRS; two that offer 401(k) plans are Amber Charter School in Manhattan and Merrick Academy in Queens.

Even if the TRS schools stop thinking the plan is worth the investment, there’s nothing they can do: According to state law, once a school is in the TRS, it can never leave.

But that hasn’t stopped the schools from asking for relief. Several schools in the plan are pushing to get an increase in state funding to cover the costs. The UFT has proposed pension relief for charter schools that would require the Department Of Education to pay for the schools’ TRS costs. How that would work in practice has yet to be worked out.

But most schools in the plan agree that the simplest option — letting the charter schools opt out of the TRS — would not be a fair resolution.

“I think that there are some ridiculous parts of the pension, but we didn’t set that up,” said Gauthier of Renaissance. “The politicians, traditional public schools, they all have this benefit. Why are charter schools expected to be the sacrificial lambs?”

Here is a breakdown of charter schools’ pension plans and payments, as reported in their 2008-2009 audited financial statements. One note before reading: A small contribution to a school’s pension fund does not necessarily indicate poor policy on the part of the school. Because 401k/403b plans state that an employer must contribute to the plan only if an employee contributes, some schools contribute little to no money to their pension plans due to their employees’ decisions.

Headlines

In smaller gun violence protests, hundreds of students walk out of NYC schools to mark Columbine anniversary

PHOTO: Drew Angerer
NEW YORK, NY - APRIL 20: Student activists rally against gun violence at Washington Square Park, near the campus of New York University, April 20, 2018 in New York City. On the anniversary of the 1999 Columbine High School mass shooting, student activists across the country are participating in school walkouts to demand action on gun reform. (Photo by Drew Angerer/Getty Images)

From Brooklyn to the Bronx, students left their classrooms Friday to protest gun violence in demonstrations that were smaller but no less than passionate than last month’s massive walkout.

This time around, school officials weren’t giving a free pass to students for skipping school to protest — the Department of Education said there could be repercussions and Chancellor Richard Carranza urged students to stay in class because “you don’t have to be out of school all day to make your voices known. You’ve already made your voices known.”

According to the Department of Education, attendance on Friday was 89.89 percent, down just slightly from Thursday’s attendance of 91.36 percent. But that number might not account for students who briefly left school to attend protests after the school day started.

The walkout was designed to protest gun violence and planned for the 19th anniversary of the Columbine school shooting.

Many of the demonstrators gathered in Washington Square Park for a “die-in.” But other students stayed close to home, such as the School for Global Leaders on the Lower East Side. Here are some photos and videos shared on Twitter that give a sense of the walkout’s scope in New York.

#NationalSchoolWalkout

Carranza discourages student participation in Friday’s gun violence walkout — which could come with consequences

PHOTO: Courtesy photo/P.S. 261
Students at P.S. 261 in Brooklyn walked out of class in March to honor the victims of the Parkland, Fla. shooting and call for stricter gun control laws.

Last month, 100,000 students streamed out of city classrooms to protest gun violence, demonstrations condoned by the mayor and education department officials.

Similar but scaled-down protests are being planned for Friday, but with a major difference — students are more likely to face consequences for walking out of their classes this time.

For the March 14 walkout, held on the one-month anniversary of the Parkland, Florida, school shooting that killed 17, city education department officials laid out clear rules meant to facilitate student participation. Anyone who left school for the scheduled protest but returned immediately afterward would not be marked absent.

This week, students who are not in school will be marked absent, according to the education department.

At his first town hall meeting with students, Chancellor Richard Carranza implored them not to walk out of class this week.

“I supported it in March,” he said. “This one — I don’t think it’s the same thing.”

Instead, Carranza said, students should focus on having conversations about the issue inside their schools. “You don’t have to be out of school all day to make your voices known. You’ve already made your voices known.”

The department’s revised approach comes as activists planning the day of action worry that focus on gun control policy is diminishing as the Parkland shooting recedes into the past. That shooting has inspired a sustained protest movement led largely by students, but other topics have pushed it out of headlines in recent weeks.

Indeed, advocates are expecting a smaller turnout this time around, with about a dozen New York City schools registered on the national organizing page — including Bard High School Early College Queens and Stuyvesant High School.

One of the biggest demonstrations is expected to be an afternoon rally at Washington Square park, but other schools are opting for a day of action within their own buildings — and some students say they are prioritizing other ways of making a difference.

“We will be hosting a lunch and learn and creating kindness cards,” Urban Assembly School for Criminal Justice junior Robina Afzal said in an email. “We don’t feel the walkouts are most effective. Instead we can stay in school and create a change.”

PHOTO: Courtesy photo/P.S. 261
Fifth-grade students at P.S. 261 in Brooklyn are planning to walk out of school on April 20, marking the anniversary of the Columbine school shooting. They will head to borough hall and deliver letters to their local U.S. representative calling for stricter gun control laws.

At M.S. 51 in Brooklyn, students will take part in a day of assemblies where they will write letters to elected officials to demand action on issues that are important to young people.

“We want to balance our walkout and take real action that might influence policy-makers, rather than making another powerful public statement,” according to a press release sent by the middle school students there.

P.S. 261 in Brooklyn is one of the few elementary schools expected to participate on Friday. The fifth grade students have assigned themselves organizing tasks, with separate working groups dedicated to poster-making, writing original freedom songs, and even a media team. They plan to march to Borough Hall, where students will stand in a circle, sing, and chant to draw attention to young lives lost to gun violence every day across the United States.

“I think we should do it outside of the school because more people can see us walking out, because this is very important,” said Bayan Clark, a fifth-grader who is helping to organize the event. “Kids get shot every single day and it’s not just in school. It’s also outside.”

Principal Jackie Allen said such social actions are woven into the school’s teaching and learning.

When Trayvon Martin was killed in Florida, students wore black armbands in solidarity with protesters who drew attention to racial profiling and bias. When President Trump proposed an immigration ban on majority-Muslim countries, they marched around their school and created posters to signal that everyone is welcome at P.S. 261.

Ever since the Parkland shooting, students have been tackling issues around gun violence, writing letters to local elected representatives and making connections to the Black Lives Matter movement.

“We try to make sure the curriculum is relevant,” Allen said. “What’s happening in the world, it does make our way into the classrooms and kids want to talk about it.”

“We want to reflect democratic values,” she said. “We want kids to take social action and develop social awareness.”