The 2022 stock market plunge has taken a toll on some of the nation’s largest state and municipal pension funds, making it harder for governments to pay for future retirement benefits to millions of K-12 teachers and other public employees.

Here, Michael Addonizio, an education policy expert at Wayne State University, provides insight on how teacher pensions are affecting K-12 school budgets overall and what, if anything, can be done to better manage pension systems and close funding gaps.

1. Is there enough money to pay teacher pensions?

Yes and no. There is enough money to pay pension benefits to current retirees. But there is not enough money to pay all promised benefits to future retirees.

U.S. teacher pension funds collectively manage about US$3 trillion in assets. These dollars are invested in various ways – stocks, bonds, real estate, foreign currency, and other ways. But these assets held by the retirement plans are generally less than the plans’ liabilities – that is, the projected cost of benefits promised to future retirees. As of 2022, this gap between assets and liabilities is about $878 billion. Put another way, the ratio of assets to liabilities is about 77%. This ratio is down from about 84% in 2021, but is higher than any other year since 2008.

The amount spent on teacher retirement costs in 2020 – $65.9 billion – represented 5.5% of total state and local K-12 spending.

The problem is that these retirement costs have been growing faster than total K-12 expenditures for decades. In 2001, retirement costs amounted to only 1.3% of total state and local school spending.

The growth in teacher retirement costs is due mostly to an increase in payments for unfunded pension liabilities, often referred to as pension debt. This is the amount of money that states and municipalities pay annually into their retirement systems to cover previously unfunded liabilities – that is, the shortfall that a pension fund needs to pay all future promised benefits.

2. How do these pension funding shortfalls occur?

Every year, pension planners have to make assumptions about how fast teacher salaries will grow, how many teachers will teach long enough to qualify for a pension, how long qualified retired teachers will live and collect benefits and how the pension fund’s investments will perform. If all these assumptions are correct and the plan’s expected assets cover its expected liabilities, the plan is considered fully funded.

But the typical teacher pension plan has not been fully funded at any point since about the year 2000. Overly optimistic investment assumptions are often the biggest part of unfunded liabilities. In response, states or big cities often redirect money from school operating budgets into the pension funds. But these governments often fail to make these payments in full.

States and cities face fiscal pressures from other spending demands and from tax collections that fail to keep pace. Pushing some unfunded pension liability costs into the future is often seen as less painful than cutting current government programs or raising taxes. But skimping on covering costs for future retirees often compounds the system’s liability problem over time.

In 2021, fully 69% of teacher retirement costs went to cover unfunded pension liabilities, up from 17% in 2001. In other words, the cost of future benefits is growing faster than the cost of current-year benefits.

Could it be due to increasingly generous retirement benefits? No. A recent report by the Equable Institute, a bipartisan nonprofit that studies public pensions and advises employees, communities and policymakers, concludes that the average value of lifetime benefits for new teachers is about $100,000 less than for their more senior colleagues.

Rather, unfunded pension liabilities can rise because of downturns in the financial market, lowering the systems’ investment earnings. Also, they may increase when schools hire more teachers and support staff, increasing the numbers of workers in the pension system. It can also be due to the rising cost of borrowing,

3. What does this mean for education funding?

As more public dollars flow to teacher retirement systems, fewer resources are available for schools and classrooms. From 2002 to 2020, total state and local K-12 spending rose 33%, while teacher retirement spending rose 220%. Nationally, and in most states, teacher pension costs have been rising faster than K-12 spending for the past two decades. States then take money from state funds normally dedicated to school operations and move them to the pension fund. The result has been less spending for school operations, in the form of either spending cuts or a smaller share of a growing spending pie.

For example, in the 2022-23 fiscal year, my state of Michigan will pay nearly $3 billion from the state School Aid Fund into the state-administered Public School Employees Retirement System to cover future pension costs. However, while this move will lower the amount of unfunded liabilities in the system, these dollars will come directly from state funds intended to support general K-12 school operations.

This practice has been repeated in many states over the past two decades. According to the Equable Institute study, the “hidden cuts” of using K-12 funds to cover pension costs have risen from $457 per student in 2001 to $1,290 per student in 2021 – a 182% increase in constant 2021 dollars.

4. How can the problem be solved?

The solutions rest with the states, and there is no “one size fits all” remedy. Each state has its own K-12 funding system and teacher retirement plans, which are governed by many rules that are embedded in state constitutions and laws. These state laws vary. For example, teachers in 15 states, including California and Texas, aren’t covered by the Social Security system. But there are some common issues and ways to address them.

One common problem is transparency. While it’s usually relatively easy to see how much states, districts and schools are spending for operations, it’s much more difficult to find public data on teacher retirement costs, particularly pension liability costs, because the data is remarkably scarce.

Pension dollars are as much a part of public education budgets as spending on teacher and staff salaries, books, buses and the rest. Careful monitoring and reporting of pension costs, both payments and liabilities, may improve management of these costs before they inflict more damage on budgets for teaching and learning.

Secondly, many states have reduced their financial support for K-12 schools in recent years. The share of personal income given to K-12 schools has steadily declined since the 2007-2009 Great Recession in 39 states.

States could protect school operating budgets by using general fund revenue to pay pension liability costs, not dedicated K-12 aid. Local districts could be responsible for the cost of current-year retirement benefits but cannot do much to manage unfunded pension liabilities. States could cover pension debt costs without reducing state aid for school operations, but it would require raising taxes or cutting programs in other areas.

To begin moving in this direction, states could restore their pre-recession levels of tax effort for K-12 education. A recent study by researchers from Rutgers University, the University of Miami and the Albert Shanker Institute concluded that had all states done this by 2016, schools would have reaped $288 billion in added funding.

Trading off pension support against school operating funds is not an inevitable result of rising pension costs. Whether states have the economic means or political will to address this problem effectively remains to be seen.

Michael Addonizio, Professor of Educational Leadership and Policy Studies, Wayne State University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Forests are critically important for slowing climate change. They remove huge quantities of carbon dioxide from the atmosphere – 30% of all fossil fuel emissions annually – and store carbon in trees and soils. Old and mature forests are especially important: They handle droughts, storms and wildfires better than young trees, and they store more carbon.

In a 2022 executive order, President Joe Biden called for conserving mature and old-growth forests on federal lands. Recently Biden protected nearly half of the Tongass National Forest in Alaska from road-building and logging.

The Biden administration is compiling an inventory of mature and old-growth forests on public lands that will support further conservation actions. But at the same time, federal agencies are initiating and implementing numerous logging projects in mature and old forests without accounting for how these projects will affect climate change or forest species.

As scientists who have spent decades studying forest ecosystems and climate change impacts, we find that to effectively slow climate change, it is essential to increase carbon storage in these forests, not reduce it. A first step toward this goal would be to halt logging federal forests with relatively high-biomass carbon per acre until the Biden administration develops a plan for conserving them.

Balancing timber and climate change

Many of the 640 million acres that the federal government owns and manages are used for multiple purposes, including protecting biodiversity and water quality, recreation, mining, grazing and logging. Sometimes these uses conflict with one another.

Legal mandates to manage land for multiple uses do not explicitly mention climate change, and federal agencies have not consistently factored climate change science into their plans. However, at the beginning of 2023, the White House Council on Environmental Quality directed federal agencies to consider the effects of climate change when they propose major federal actions that significantly affect the environment.

Some logging projects fall into this category. But many large logging projects that affect thousands of acres have been legally exempted from such analysis.

What’s lost when old trees are cut

Most forests in the continental U.S. have been harvested multiple times. Today, fewer than 5% of these forests are more than 100 years old. Old, very large trees are the ones that hold the most carbon, and harvesting forests is the main driver of forest carbon loss.

For example, in Oregon’s national forests east of the Cascades crest, a 1990s policy formerly spared trees larger than 21 inches in diameter – but the rule was rolled back in 2021 so that large trees could be cut. A recent analysis found that these larger trees comprised just 3% of all trees in the six national forests, but accounted for 42% of living tree carbon.

In the Green Mountain National Forest in Vermont, federal officials have approved 40,000 acres of harvest since 2016, targeting many mature and old trees. One 14,270-acre area that was approved for harvest in 2019 contained more than 130 stands older than 100 years. This project required the construction of 25 miles of logging roads, which can have harmful effects, including fragmenting forests, polluting streams and making forests more vulnerable to human-caused wildfires.

Canada is also allowing large, mature trees to be harvested. In British Columbia, mature forests that include old-growth trees historically absorbed more carbon than they released to the atmosphere, resulting in a net carbon sink annually. But since 2002, these tracts have emitted more carbon than they removed from the atmosphere, primarily because of logging, beetle attacks and wildfires. According to British Columbia’s greenhouse gas emissions inventory, these forests now emit more carbon than the province’s energy sector.

In eastern Canada, the Pacific Northwest and the southeastern U.S., timber companies have removed many old trees and replaced them with plantations that contain just one or two tree species. This shift has reduced the structural diversity of the forest canopy – the ecologically important layer formed by the crowns of trees – and the diversity of tree species. Losing old-forest habitat has also caused broad-scale population declines among many forest bird species in eastern Canada, and is likely having the same effect in the U.S.

More harvesting releases more carbon

One argument forest product companies make to support logging is that wood can be regrown, and it releases less carbon dioxide to the atmosphere than other building materials. Such claims often make optimistic assumptions that overstate the carbon benefits of harvesting trees by factors of 2 to 100.

Some studies indicate that thinning forests by harvesting some trees and reintroducing low-intensity fires can reduce the intensity of future wildfires, leaving more carbon stored in trees. But these studies don’t account for the large amount of carbon that is released to the atmosphere after trees are cut.

In a review published in 2019, we worked with colleagues to estimate how much carbon was contained in trees that were harvested in Washington, Oregon and California from 1900 through 2015, and what happened to it after the trees were logged. We calculated that just 19% of the harvested carbon was in long-lived wood products like timber in buildings. Another 16% was in landfills, and the remaining 65% was released into the atmosphere as carbon dioxide.

In contrast, in 2011 the Australian state of Tasmania suspended logging on half of its old-growth forest area. Within less than a decade, Tasmania was storing more carbon than it released because it was avoiding harvest emissions and the mature trees it saved were accumulating so much carbon.

In the U.S. Pacific Northwest, implementation of the 1994 Northwest Forest Plan, which the Clinton administration developed to protect endangered species in old-growth forests on public lands, significantly increased carbon storage over the next 17 years. In contrast, privately managed lands in the region accumulated virtually no additional carbon after accounting for losses from wildfire and harvesting.

The cheapest and simplest way to capture carbon

President Biden has set a goal of reducing U.S. greenhouse gas emissions to net-zero by 2050 to avoid catastrophic climate change. To reach that goal, U.S. forests, lands and oceans will have to remove as much carbon dioxide from the atmosphere as the nation emits from fossil fuels, industry and agriculture.

In the western U.S., our research shows that protecting half of the mature carbon-dense forests in zones that are relatively less vulnerable to drought and fire could triple carbon stocks and accumulation on protected forests by 2050. A majority of these forests are on public lands.

The carbon dioxide that human activities are releasing into the atmosphere today will elevate global temperatures and raise sea levels for 1,000 years or more, unless societies can find ways to remove it. In its 2022 climate assessment report, the Intergovernmental Panel on Climate Change concluded that protecting existing natural forests was “the highest priority for reducing greenhouse gas emissions.”

Conserving forests is one of the lowest-cost options for managing carbon dioxide emissions, and it doesn’t require expensive or complex energy-consuming technologies. In our view, sufficient science exists to justify a moratorium on harvesting mature trees on federal lands so that these forests can keep performing their invaluable work.

Beverly Law, Professor Emeritus of Global Change Biology and Terrestrial Systems Science, Oregon State University and William Moomaw, Professor Emeritus of International Environmental Policy, Tufts University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

It may come as a surprise to fellow land-dwellers, but the ocean actually accounts for most of the habitable space on our planet. Yet a big chunk of it has been left largely unmanaged. It’s a vast global common resource, and the focus of a new treaty called the biodiversity beyond national jurisdiction (BBNJ) agreement.

For 15 years, UN member states have been negotiating rules that will apply to the ocean lying more than 200 nautical miles from coastlines, including the seabed and the air space above, referred to as the “high seas”.

Covering nearly half the Earth’s surface, the high seas are shared by all nations under international law, with equal rights to navigate, fish and conduct scientific research. Until now, only a small number of states have taken advantage of these opportunities.

This new agreement is supposed to help more countries get involved by creating rules for more fairly sharing the rewards from new fields of scientific discovery. This includes assisting developing countries with research funding and the transfer of technology.

Countries that join the treaty must also ensure that they properly assess and mitigate any environmental impacts from vessels or aircraft in the high seas under their jurisdiction. This will be especially relevant for novel activities like removing plastic.

Once at least 60 states have ratified the agreement (this may take three years or more), it will be possible to establish marine protected areas (MPAs) in high sea locations of special value.

This could protect unique ecosystems like the Sargasso Sea: a refuge of floating seaweed bounded by ocean currents in the north Atlantic which offers breeding habitat for countless rare species. By restricting what can happen at these sites, MPAs can help marine life persevere against climate change, acidification, pollution and fishing.

There are obstacles to all nations participating in the shared enjoyment and protection of the high seas, even with this new treaty. Nations joining the new agreement will need to work with existing global organisations such as the International Maritime Organization (IMO), which regulates shipping, as well as regional fisheries management organisations.

The new treaty encourages consultation and cooperation with existing bodies, but states will need to balance their commitments with those made under other agreements. Already, some departments within governments work against each other when implementing broad, international treaties. For example, one division may chafe at greenhouse gas pollution regulations imposed at the IMO while a sister agency advocates for more stringent climate change measures elsewhere.

A new research frontier

A key element of the new treaty addresses the disproportionate ability of developed countries to benefit from the scientific knowledge and commercial products derived from genetic samples taken from the high seas. More than 40 years ago, when the law of the sea convention was being negotiated, the same issue arose over seabed minerals in areas beyond national jurisdiction.

Industrialised nations had the technology to explore and intended to eventually mine these minerals, while developing countries did not. At that time, nations agreed that these resources were part of the “common heritage of humankind” and created the International Seabed Authority to manage a shared regime for exploiting them.

The extreme conditions for life in the open ocean have nurtured a rich diversity of survival strategies, from the bacteria that thrive in the extremely hot hydrothermal vents of the deep sea to icefish that breed in the intense cold of the Southern Ocean off Antarctica. These life forms carry potentially valuable information in their genes, known as marine genetic resources.

This new agreement provides developing states, whether coastal or landlocked, with rights to the benefits of marine genetic resources. It does not establish an administrative body comparable to that created for seabed mining, however. Instead, non-monetary benefits, such as access to samples and digital sequence information, will be shared and researchers from all countries will be able to study them for free.

Economic inequality between countries will still determine who can access these samples to a large extent, and sharing DNA sequencing data will be further complicated by the convention on biological diversity, another global treaty. The BBNJ agreement will establish a financial mechanism for sharing the monetary benefits of marine genetic resources, though experts involved in the negotiations are still parsing what it will eventually look like.

The best hope for robust marine protected areas and equitable use of marine genetic resources lies in rapid implementation of the BBNJ agreement. But making it effective will depend on how its provisions are interpreted in each country and what rules of procedure are established. In many ways, the hard work is beginning.

Although areas beyond national jurisdiction are remote for most people they generate the air you breathe, the food you eat and moderate the climate. Life exists throughout the ocean, from the surface to the seabed. Ensuring it benefits everyone living today, as well as future generations, will depend on this next phase of implementing the historic treaty.

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Cymie Payne, Associate Professor of Human Ecology and Law, Rutgers University and Robert Blasiak, Research Fellow in Ocean Management, Stockholm University

This article is republished from The Conversation under a Creative Commons license. Read the original article.