CalSTRS to sock local school budgets

CalSTRS to sock local school budgets

Prop 30 adCalifornia’s pension crisis just keeps getting worse. The major crisis now is the California State Teachers’ Retirement System. Gov. Jerry Brown warned about the crisis in his Jan. 2014 budget proposal, but didn’t do anything about it. Election year.

We’ll have to see what his Jan. 2015 budget, due out in a couple weeks, says about the problem.

But here’s the latest, from the U-T San Diego:

A state-mandated sched-ule for replenishing California’s cash-strapped teachers’ retirement fund means school districts will see their pension contributions triple by 2021 and remain high for decades, according to budget forecasts released this month by several local districts.

Administrators say they’re at a loss for how they’ll come up with the cash, which for some districts could be tens of millions per year. The forecasts come just six months after a legislative deal was struck by Sacramento lawmakers to recover billions of dollars for the California State Teachers’ Retirement System, or CalSTRS.

Some school districts in San Diego County highlighted the sticker shock in so-called “interim midyear” budget reports released this month that show escalating contributions from teachers, school districts and even the state as a way to dig the teachers’ retirement fund out of debt over the next several years.

Now we know where that $7 billion from Proposition 30, advertised as going for schools, really is going.

 

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  1. Dawn Urbanek
    Dawn Urbanek 30 December, 2014, 19:38

    Unfunded Pension Liabilities

    Capistrano Unified School District, Orange County has $57,265,077 million in Unfunded Pension Liabilities. That is up from $49,680,278 in 2011.

    Source: http://capousd.ca.schoolloop.com/file/1229223560406/1218998864154/4733164299538810046.pdf at page 74 (page 70 of 100)

    For High lights of the Districts Annual Fiscal Report see:
    http://disclosurecusd.blogspot.com/2014/12/capistrano-unified-school-district_13.html

    Source: 2013-2014 Second Interim Report at page 135 of 143 http://capousd.ca.schoolloop.com/file/1229223560406/1218998864154/8880828758283900707.pdf

    Regarding Future Pension Contributions.

    Pension contributions are projected to climb to over 10% of the Districts budget by 2021

    Governor Brown is forcing Districts to contribute substantially more money to CalSTRS and CalPERS in order to shore up the underfunded pension plans. CUSD pension contribution will increase from its current:

    CalPERS: 11.442% to 20.4% by 2021
    CalSTRS: 9.50% to 19.1% by 2021

    Which will represent 9.6% of CUSD’s total unrestricted budget.

    Source: Financial Report- Governor’s 2014-15 Proposed Budget and May Revise Up-date at Page 12 2j
    http://capousd.ca.schoolloop.com/file/1229223560406/1218998864154/1331468026996732138.pdf

    Employee compensation is currently 92.7% of the Districts budget. That means that employee costs will exceed 100% of the District’s budget. CUSD will need to borrow money to offer any student services.

    Source: Capistrano Unified Board Presentation May 28, 2014 http://capousd.ca.schoolloop.com/file/1229223560406/1218998864154/1331468026996732138.pdf

    And listen to the Board Audio at: 29:20:
    http://cusd.capousd.org/cusdweb/boardaudio/5-28-14/05-28-14%20RegularBdMtg.mp3

    Source: http://edsource.org/2014/great-year-for-calstrs-wont-alter-need-for-big-increase-in-contributions/57811#.UynJVq1dUdI

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