This week is Teacher Appreciation week in the United States and if it’s anything like the past few years, schools and districts will celebrate teachers with a pizza party or bags filled with air. Politicians and parents will say kind words about the value teachers bring to the classroom and how important they are for kids and the future of our nation. But, to us here at Equable Institute that rings hollow.

If we want to talk about truly showing our appreciation to educators, we need to deal with one of the biggest challenges preventing state and municipal governments from providing better wages, offering more valuable benefits, and giving teachers the classroom resources and support they need — pension debt.

Despite record education budgets, it’s been an intensely rough few years for teachers that have been marked by fewer resources, bigger class sizes, and new challenges that stretch the job expectations of an educators. And that’s on top of stagnated wages in many places and declining value of benefits for new teachers.

Teachers today have a bleaker outlook on life once they retire and leave the classroom. In fact, we’ve seen one of the largest exoduses of educators from the profession in contemporary history and states have dramatically loosened the standards for educators just to keep schools staffed.

Here’s how pension debt is contributing to those challenges.

At the end of 2022, state and local K-12 retirement plans had more than $816 billion in pension debt and this mean they only had about 77% of the cash they need to pay for promised pension benefits. In 2001, these retirement plans were nearly 100% funded. Over the last two decades, states have systematically underfunded teacher pension funds in favor of diverting budget dollars to other priorities. And, instead of finding new revenue sources to backfill funding gaps, they have relied on riskier investments like private equity, real estate, and hedge funds to make up the difference, which has done little to improve these trends.

And teachers (and their students) are the ones feeling the downstream effects of these concerning pension funding trends. In a recent report, we demonstrated how rising teacher pension costs driven by pension debt are eating into K-12 dollars that should be making it to teachers’ wallets and classrooms. Because of the cost of pension debt, the cost of providing pension benefits has risen more than 95% in the last two decades. Despite this rising spending, the lifetime value of teacher pension benefits has declined by 6%, or about $100,000 on average since 2005. In the same time period, teachers salaries increased marginally, but so have their pension contribution rates, ultimately blunting the impact of any raises they may have earned when paychecks hit their accounts each month.

How much money in pension income or take home pay do teachers have to sacrifice before we admit there’s a problem?

To be clear, pensions aren’t the problem. Nor are teachers who deserve these hard-earned benefits. The way states have systematically underfunded public pension funds through failing to pay their full contributions every year, adjust their investment assumptions, and find new revenue sources in the face of underperforming investments, is the problem. The problem isn’t and never will be educators or their retirement benefits.

Policymakers who kick the can down the road in fully funding pensions while insisting that teachers are invaluable to our children and our communities who are the problem. It is the investment managers and neoliberal union actors who funnel billions to the worst actors on Wall Street, through risky private equity investments with sky-high fees in search of impossible returns instead of advocating for responsible funding practices who are the problem.

The more underfunded pensions become, the more vulnerable they become to political attack from bad actors who would like to eliminate pensions for educators and other public servants because the pension debt becomes very expensive to deal with. But rather than address the systemic root of the problem and working to solve it, too many decision-makers and advocates would rather bury their heads in the sand and pretend that it’s not happening or that the problem isn’t that bad.

To truly solve this problem, we think states should be using money from the general fund to pay off pension debt, so education budgets aren’t bearing the cost of policymaker’s failures. States need to offer the public more transparency about pension costs as a share of education spending, so the hardworking education activists and well-intentioned policymakers can fight for budgets that increase education spending at a higher rate than pension spending. Finally, legislatures need to get serious about pension funding policies so future generations aren’t left to solve yet another problem short-sighted decision makers have decided to ignore.

As a society, we can’t claim that we appreciate teachers and their service by continuing to ignore this and offering educators a slice or two of pepperoni and some words of affirmation on a yearly basis. It’s time to course correct on pension debt in ways that hold teachers harmless and meaningfully improve their material conditions. Once we do that, maybe the pizza won’t feel like such a slap in the face.