Employee pensions threatens to engulf California school budgets

California is increasingly headed down a road from which it may not be able to exit. The state, while still having state employee pension funds in much better fiscal shape than those in some other states, like Illinois, is nevertheless seeing a seemingly intractable increase, year after year, of the size of the obligations it owes to retired state employees. It is rapidly becoming apparent to experts, even as it is largely unnoticed by the public, that the current situation is completely unsustainable. If something is not done to correct to increasing liabilities, California may be facing collapse in some of its government services, the largest of which is public education.

An unceasing rise in liabilities

For school districts like San Jose Unified, the reality of budgetary catastrophe is already here. Just a decade ago, the district only had a tiny fraction of its total budget going towards paying public employee pensions. As of today, that figure has swelled to nearly 30 percent of the payroll, the district's largest expenditure. It has been projected by the district's own budgetary experts that in just two years, the San Jose Unified School District will be paying more than 50 percent of its payroll costs to the state pension system. Such rapid bloat can be seen in other districts as well.

Just north of there lies the San Bruno School District, in an enclave of Palo Alto. As bad as the recent budgetary strains have been on it's neighboring district in San Jose, San Bruno is experiencing far more severe problems. Not only have the amounts of liabilities that the district is paying to the pensions of retired state employees skyrocketed, but the district is rapidly losing its student base as well. And this means that the district is receiving dramatically less funding from the state, because its funding is allotted on a per-pupil basis.

Unfortunately, the San Bruno School District's plight is seen across the state. Places throughout California, such as Palo Alto, have experienced astounding rises in living costs over recent decades. At the same time, rich parents have largely abandoned the state's public school system, opting instead to send their children to more exclusive private schools. As a result, the public schools in California are largely filled with underprivileged minorities. This has made school districts extremely sensitive to cost-of-living increases. Large increases have caused the flight of poor students, whose parents can no longer afford to live there.

Read More: https://edsource.org/2017/districts-oppose-advocacy-groups-bill-demanding-more-accounting-for-spending-lcff/584344


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