Four of the five states with widespread teacher strikes in 2018 have significantly increased education funding this year, according to a new analysis from the Center on Budget and Policy Priorities (CBPP). The increases have ranged from 3 percent in North Carolina and West Virginia to 9 percent in Arizona to 19 percent in Oklahoma. Kentucky is the lone state that kept funding flat.
However, even with the increases, none of these states are close to what they used to put into K-12 education before the Great Recession. The deficit ranges from 6 percent below pre-recession levels in Arizona to 15 percent in Oklahoma.
“While last year’s funding boost in Arizona and other teacher protest states are a step in the right direction," says Michael Leachman, CBPP’s senior director of fiscal policy, "these states have a long way to go to match others in per-pupil funding."
Leachman also cautions that three of the four protest states that raised education funding are relying on what he believes to be unsustainable revenue sources.
Arizona, for example, enacted a 20 percent pay raise over three years. But the new funding mainly relies on “rosy economic growth” predictions, continued cuts in the Medicaid rolls and one-time funding shifts.
Oklahoma passed its first tax hike in nearly three decades to pay for its increased education funding. But the report notes that the new revenue -- increased tax rates on cigarettes, gasoline and oil extraction -- may lose its earning power over time as the country trends toward smoking less and better fuel efficiency.
Still, the report paints the most optimistic picture of education funding in a decade. Nationwide, states reached an important milestone: For the first time since the Great Recession, a majority of states have restored education funding.
In 2016, the most recent year in which comprehensive data is available, a total of 26 states put more money into education than they did in 2008 after inflation is taken into account. Given the continued focus on increasing education funding, CBPP says that total number is likely to be higher today.
“This marks an important shift in the politics around school funding,” says Leachman, “and it's likely because of the success of last year’s protests.”
That teacher unrest has continued into 2019. So far, teachers in West Virginia and the cities of Denver, Los Angeles and Oakland, Calif., have gone on strike. Leachman says he expects the year will see more protests elsewhere.
Budgets are still being finalized for the next fiscal year, but according to the National Association of State Budget Officers, 18 governors are proposing raises for teachers. Chief among them are states that haven’t yet seen teacher unrest but that still have some of the largest education funding deficits: Georgia, Nevada, New Mexico and South Carolina.
Virginia’s governor is also proposing an education funding boost -- teachers there went on a one-day walkout to lobby for higher funding in January -- as is Oklahoma’s.
In other public finance news:
'California Rule' Stays Intact – For Now
The California Supreme Court issued a narrow ruling this week on a closely watched case challenging changes to state firefighters’ pension benefits.In Cal Fire v. CalPERS, the firefighters argued that their option to purchase up to five years of additional service time to count toward their vested retirement benefits was a contractual right. The state’s high court ruled against the firefighters but did not issue a broader ruling on the so-called California Rule, which protects all benefits for existing employees. (The CalPERS pension changes did not affect benefits already earned by retirees.)
This was the first of several opportunities the court will likely have to address the California Rule. Another case, involving changes made by the Alameda County Employees' Retirement Association and the Contra Costa Employees' Retirement Association, is waiting to be scheduled for oral arguments.
The retirement associations’ lawyer, Harvey Leiderman, predicted that case is “likely to be the vehicle for the much anticipated reexamination of a rule that has been talismanic to California's public employees for three generations.”
More Retirement Plans for All
New Jersey Gov. Phil Murphy is expected to sign legislation making it the sixth state to require many private employers to offer retirement savings plans to employees.The legislation is expected to benefit as many as 1.7 million workers in the state, where a little more than half of residents don’t have access to a tax-free retirement savings plan through their employer.
New Jersey joins California, Illinois and Oregon in creating a state-sponsored retirement program for private-sector businesses. Recently, OregonSaves announced workers have so far amassed $13.5 million in savings.
Vermont and New York have similar savings plans but are voluntary for employers. New Jersey passed a voluntary program several years ago, but it never got off the ground. The new bill would apply to employers with at least 25 employees.
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