California school districts facing cuts due to pension costs

January 23, 2017

California school districts will soon divert billions of dollars from classrooms in order to backfill pensions, education officials say. The skyrocketing pensions costs are expected to eat up much of California’s increased spending on education. [SF Chronicle]

The school district workers whose pensions require the most backfilling are non-certified employees, such as office workers, custodial staff and cafeteria workers. Most non-certified employees are members of the California Public Employees Retirement System (CalPERS), the state’s flagship pension system, whereas teachers and administrators primarily belong to the California State Teachers Retirement System (CalSTRS), the state’s second largest pension system.

Last month, CalPERS decided to lower its discount rate, or projected return on investment, from 7.5 percent to 7.0 percent. The change will be phased in over a period of a few years, but it will cause pension costs to spike for state and local government agencies, including school districts.

State estimates show school districts’ CalPERS contribution costs will likely double within six years.

School district officials say, due to the rising pensions costs, there may be larger class sizes, stagnant worker pay, fewer counselors and librarians and less art and music. Insolvency and state takeover are possibilities for some districts.

“It’s like an OMG moment of, ‘How are we going to cover this?’” said Dennis Meyers, the assistant executive director of governmental relations for the California School Boards Association. “It’s scaring districts right now. A lot are questioning whether they can stay afloat.”

Factoring in CalSTRS as well as CalPERS, rising pensions costs are expected to eat up more than a third of proposed increases to next year’s state education budget. The state education budget is expected to expand by $2 billion next year to $73.5 billion. At the height of the recession in 2011, the budget was $47.3 billion.

All seven cities in San Luis Obispo County are also CalPERS members. They, too, will face rising pension costs as a result of CalPERS lowering its discount rate.


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shelworth

Government employee unions should never have been allowed in the first place. Private sector unions deal with the company for the company’s money. Government unions deal with politicians who give in to every demand in exchange for campaign contributions, the politicians who make these bad (for the taxpayers) deals know they will be long gone when the sh*t hits the fan. The best thing for the taxpayers would be a complete default of the pension system and a renegotiation of the pensions, say 25-50% on the dollar.


Chinaski

OMG! They answer the phone in SPANISH?? That is a total OUTRAGE!! Why aren’t they hiring more Nordic history teachers???


whoowhoo

Too top heavy. When I went to elementary school, there were three people in the office, a receptionist, a nurse and the principal. I bet there are ten people in my kids elementary school office today and at times, they answer the phone in Spanish.


Mitch C

Agreed! When I was in elementary school the principal taught a 7/8 combination and my education was sufficient to get me accepted to a quality university and accepted to a top drawer masters program. The 11 school districts in SLO County should be consolidated under the County Superintendent (the resulting consolidated district would still be smaller than those in metropolitan areas). Do we really need 11 superintendents with their staffs, 11 payroll systems, 11purchasing departments, 11of this, 11 of that. Then get principals back in the classroom (with students in class what do they do with their day?). Finally, it is over the top to pay a superintendent over $300,000 (salary and benefits) when teachers are payed in the $60,000 range.


TacomaRose

Meanwhile the superintendent of San Luis Coastal gets a slick million dollar (publically funded) loan so he can afford a house here in the happiest place in America. (refer past cal coast article link below)


This BS is so horribly WRONG !!!


https://calcoastnews.com/2016/12/san-luis-coastal-help-top-exec-buy-home/


Russ J

Let the games begin………… This is only the beginning. Teachers pensions are really nothing compared to the overall Armageddon of unfunded pension and insurance liability that will continue to swell like you’ve never seen. Gray Davis started showering state workers with insane pensions and benefits during the dot com boom which was the model for almost all county workers shortly thereafter. It’s the political payoff for greasing candidates campaign coffers. It’s essentially political prostitution. Better run for hills (of another state)!


Pelican1

California taxpayers have been asleep at the wheel for decades, while CALPERS has raped and pillaged the state coffers without remorse. Enough is enough.


jimmy_me

School districts never seem to be short of money when it comes to raising administrator’s salaries. When it’s time to make cuts, it’s always the people doing the work who get cut. When was the last time you saw an administrative position cut? Do you really thing the ditch diggers and administrative assistants are causing this problem?


Do a search on “state worker salary database” and type in the names of all the people you know who work for the state. See for yourself who is making the money. Decide for yourself why the current system is unsustainable.


rukidding

You can also go to “transparent California” and see what all government employees are making. An example is in Atascadero where the top paid 15 employees are firemen. Some real interesting information when you relate the pay and benefit packages of government employees to those in the private sector.


Rawhide

A 1966 M.B. High School Classmate retired from C M C as a Capitan.

At our 50 year class reunion he bragged his retirement check is 100,000 dollars plus


Rawhide

Oops…Captain


Pelican1

Wait a minute…back up the Lotto armored truck! What the hell happened to ALL the money that was to go to education that was generated by the purchase of lottery tickets?????

Must have gone to pay for the lotto bureaucracy that has grown completely out of control.

California is being governed by lunatics.


gjoralemon

If you are going to call out a retired educator for collecting a pension, that’s fine. But be grownup enough to disclose your true name and stop hiding behind some silly handle. The internet has made cowards of us all.

Gary Joralemon


SLOBIRD

Gary Joralemon… This is public information. You can go to any agency in California and post a name and zap, there is the info! This is not confidential information…


kayaknut

Yeah, because we all know no one has ever harassed, threatened, or tried to get back at someone for posting a negative comment about them or against their view…… Come on Gary, wake up and realize the world we live in and the extent someone will go to. Not sure what world you live in but our real world has people willing to go to no end to get back at someone when they set their sights to it, and since the powers to be have been turning our world into one where there are no consequences for ones actions, illegal or not. So a little protection by means of a handle isn’t something a person who isn’t “grownup” does, it is something a smart person does. Bullies always want to know who everyone is so they can pick their targets.


kayaknut

Lets guess why Gary doesn’t want to address to failing pension system, “Gary retired in 2015 as a Chief Deputy Probation Officer with San Luis Obispo County”, Now we know.