Generational warfare is here. The benefits states are obligated to pay retirees are taking a larger and larger share of the budget pie. As claims have increased in the last decade, state support for higher education has decreased. To cover the shortfall, most public colleges and universities have raised tuition.
How bad is it? Chad Alderman explores the topic in an interesting post in Education Next. Alderman found that 10 states spend more on employee retirement costs than on higher education. It’s a problem that is only likely to get worse before it gets better.
So how did North Carolina do? Hard to say since, Alderman did not make the raw data available (I did request in a subsequent email). A rough estimate shows North Carolina contribution to TSERS (Teacher and State Employee Retirement System) in 2016-17 could be approximately $1.5 billion. UNC Budget is approximately $2.6 billion. The TSERS number would also include state employees, so it’s not an exact fit. So North Carolina doesn’t appear to be in as bad a shape as some states.
Still, in 2004 the state contribution to employee retirement was 3.42 percent of total employee salary. By 2015, the number had risen to 15.32 percent of salary. Those increases along with looming demographic changes are enough to dampen whatever optimism exists that North Carolina can wholly avert this crisis.