Pensions devour school budgets, flatten teacher pay
“California’s public schools have enjoyed a remarkable restoration of funding since the bone-deep cuts they endured during the recession, but many now face a grave financial threat as they struggle to pay the escalating costs of teachers’ pensions,” reports Jessica Calefati on CalMatters.
More than half of the new money will go to pension costs, estimates the state Department of Finance and Legislative Analyst’s Office.
Some districts are predicting deficits and many are already bracing for what’s to come by cutting programs, reducing staff or drawing down their reserves even though per-pupil funding is at its highest level in three decades and voters recently extended a tax hike on the rich to help pay for school
Four years ago, “school districts, teachers and the state all agreed to pay more” to reduce the unfunded liability, now $107 billion, of the California State Teachers’ Retirement System, writes Calefati.
An economic downturn could lead to disaster, said Michael Fine, CEO of the Fiscal Crisis and Management Assistance Team.
Los Angeles Unified School District faces declining enrollment and a rising bill for teacher pensions.
“Building maintenance could suffer, grounds care could suffer, class size could suffer, instructional coaches could suffer, athletic programs could suffer, technology could suffer, intervention programs could suffer,” Fine said.
If states and school districts had put new money into salaries instead of pensions, they’d “be able to spend about $4,300 more per teacher per year, equivalent to giving each an immediate 7.2 percent raise,” he writes. In addition, “37 states and the District of Columbia have increased mandatory teacher contribution rates into their state’s pension plan,” cutting teacher take-home pay by an average of about $800 a year.
Even teachers who spend their careers in the classroom and eventually collect a pension will be losers, writes Aldeman. “This is essentially a giant transfer of wealth from one generation to the next, and no current or future teacher wins from this arrangement.”