California’s public school districts may be hit hard financially as state officials consider moving funds into the retirement fund for teachers. Gov. Jerry Brown is proposing to pour money into the California State Teachers’ Retirement System, which would trigger schools cutting their spending for next year.
Kevin Gordon, president of Capitol Advisors Group, which lobbies for school districts, told the Los Angeles Times, “It has a lot of school districts reeling in terms of how to grapple with this unanticipated expense in the coming school year, throwing a major wrench into everything.”
Brown’s plan would raise the pension contribution from school districts from 8.25% of payroll to 9.5%, the Times reports, and rise to 19.1% over seven years. That increase would mean teachers earning $50,000 a year would receive an extra $9,550 annually for their retirement from the district.
Some feel Brown isn’t going far enough. David Crane, a lecturer in public policy at Stanford University, criticized the gradual increase in pension contributions because payments in the future may be jeopardized by a bad economy. He told theTimes: “Long term, it means the next generation will have less money to spend on services of benefit to them because they’ll have to use their taxes to pay off our debts.”
Yet Perris Union High School District Superintendent Jonathan Greenberg told the Times that the proposal to pay that much into the pension system “could be devastating,” as it would force schools to reallocate spending from other priorities.
Supt. Christopher J. Steinhauser in the Long Beach School District said his district had been conservative with their funds and should be fine, but in L.A. Unified, community groups and activists are demanding that students receive more funding, and employee unions want big raises and their jobs restored if they were laid off.
L.A. Unified Supt. John Deasy said that those community groups may be furious with the proposed changes, stating: “This is something I am very worried about. We’ve made commitments to the community. Everyone has a sense of: ‘We want more, not less.’ And now we have to decide what to cut. We will lose credibility.” L.A. Unified would lose roughly 10% of its increased funding in 2014-15.