Bill Gates: fraudulent state budgets hide cost of teacher pensions

Ever since its inception in 2007, the Aspen Ideas Festival has been a proving ground for thinkers who want to break with liberal orthodoxy on certain subjects. One is education. The event, sponsored by the Aspen Institute, has been a annual refuge for Democrats who would like more choice and competition in K-12.

"The education system is built on the three pillars of mediocrity: lockstep pay, lifetime tenure and seniority," was Joel Klein's assessment at this year's Festival. He ought to know -- he's the chancellor of the New York City Department of Education, the nation's largest school system.

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This year, Mr. Klein also had some backup from a friend (and former rival in the Microsoft antitrust case), Bill Gates, who has devoted much of his time to education since stepping down from full-time work with the company in 2006. Undermining public education, he said, is a system that channels too much money to pensions for retired teachers. He predicts that state and local governments will have to lay off 100,000 active teachers in the next couple of years. "I'm very much against that," said Mr. Gates who noted that many of the teachers who lose their jobs will be younger, more motivated teachers at the bottom of the seniority system.

Mr. Gates said a big part of the problem is "fraudulent" state budgeting systems, which fail accurately to account for the cost of pension promises. A legislator who "says 'yes' doesn't feel any pain at all," he said. Thus the "accounting fraud" that lets politicians treat generous teacher pensions as a free lunch rewards them for spending more on retired teachers than on current students.