August 13, 2018

Pension debt swamps school budgets

CA’s public schools have enjoyed a remarkable restoration of funding since the bone-deep cuts they endured during the recession, but many are now facing a grave financial threat as they struggle to protect pensions crucial for teachers’ retirement.

Over the next three years, schools may need to use well over half of all the new money they’re projected to receive to cover their growing pension obligations, leaving little extra for classrooms, state Department of Finance and Legislative Analyst’s Office estimates show. This is true even though the CA State Teachers’ Retirement System just beat its investment goals for the second straight year.

Some districts are predicting deficits and many districts are 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 schools.

At the same time, some districts are grappling with how to simultaneously afford raises for teachers who have threatened to strike. The situation could become even more bleak if CA’s economy doesn’t keep growing.

Click here for the full article…