OC School Districts Will Pay More In Pension Contributions To Fill $71 Billion CalSTRS Funding Shortfall

A new report says CalSTRS received $6 billion in contributions last year and paid $10.7 billion in benefits. CalSTRS needs $4.5 billion more a year to fully fund pensions over the next three decades. That is a 75% increase in the total annual payments now being made by teachers, school districts and the state. Without a rate increase, CalSTRS projects that the funding level will continue to drop, depleting the investment fund by 2047. With no revenue from investment earnings, pay-as-you-go pension costs would jump to an estimated 50 percent of pay. See: http://resources.calstrs.com/publicdocs/Page/CommonPage.aspx?PageName=DocumentDownload&Id=71ae7477-0...

Currently Teachers contribute 8 percent of pay, school districts and other employers 8.25 percent of pay, and the state 5.2 percent of pay.

Can Local School Districts Really Afford To Pay More For Retirement Benefits?  

Capistrano Unified School District has cut $130 million from its budget since 2006. See (http://sanjuancapistrano.patch.com/groups/eye-on-education/p/cusd-wrecking-ball--what-does-130-milli...) and has $51 million in unfunded pension liabilities.

Even with the passage of Prop 30, CUSD was forced to cut $20 million from last years budget. 

For the first time in 7 years, Jerry Browns January budget up-date gave the glimmer of hope that CUSD may not be forced to implement $12 million in budget cuts identified for 2014- 2015. 

Governor Browns’ New Local Control Funding Formula is projected to bring CUSD $8.24 million in "new" revenue. CUSD's current budget plans to use $5.6 million of that to restore salaries to employees. While that is good news for employees, where will CUSD get the funding it needs to restore what students have lost during the past seven years. Even when fully funded, the New LCFF  revenue will not be sufficient to restore class sizes, bring our facilities up to standards, or restore programming. At best, students can expect status quo.

• CUSD has the highest average class sizes in the State of California and possibly in the nation at 34:1 in all grades.
• Despite the passage of Prop 30 which produced California's largest revenue stream ever at $104 billion, CUSD had to furlough its students and staff this year to balance its budget.

• CUSD facilities need $1 billion dollars in repairs. We have Trustees falling through dlapidated bleachers, and rats falling from the ceiling at San Clemente high.

• Our district continues to rely on donations and fundraising to pay for core educational programs.

What will happen if both the State and Federal Government place additional financial burdens on School Districts such as:

• higher CalSTRS contributions,
  

• higher medical cost contributions, 
  

• the cost of the implementation of the new Common Core State Standards 
  

• and even the cost of building the new Rancho Viejo Schools now that Jerry Brown is talking about ending California's longstanding commitment to split facilities costs with districts.
  

The new funding formula is unfair to suburban school Districts. The formula is designed to provide greater funding to School districts with a higher proportion of disadvantaged students and English learners; which will then force local suburban school Districts to raise taxes on themselves to pay for services that the State is constitutionally obligated to pay for.  see: Article IX of the California Constitution which requires the State of California to fund a Free and Equal education for ALL students no matter how rich or how poor. 

So I would ask taxpayers in Orange County- why should we allow Jerry Brown and the State Legislature to inadequately fund the education of our children so that tax money can be spent on:

• High Speed Rail- Jerry Brown wants to set aside $300 million for what is actually a slow speed train that will probably be stopped by the Courts,

• Drivers Licenses for Illegal immigrants- estimated to cost $1 billion per year and require the State to higher 900 new government workers (and their salaries pensions and benefits). This new program will not benefit a single legal resident in the State of California why should our children be deprived of a good education to fund this program?

• Transitional kindergarten- CUSD cannot afford to educate the children that are currently in the K- 12 system and the State expects us to add a new grade level that will cost the District $1 million dollars per year to run.