Each Marin household is shouldering between $1,000 and $24,000 — or more in overlapping areas — in school district pension debt, according to a new report from Stanford University.
The Ross School District, for example, has the highest individual load to carry in Marin schools, with $24,181 in pension debt per household. The lowest is the Marin County Office of Education, with $1,005 per household. Someone living in Kentfield, a “feeder” elementary school district to the Tamalpais Union High School District, could be holding the $10,715 pension debt from Kentfield, the $4,991 from Tam Union, and a $1,786 per-household unfunded pension liability from the College of Marin.
Those are just a few examples from Stanford’s five-year-old online tool, PensionTracker.org. Pension Tracker has just added state retirement system data from all California school districts, including 18 districts in Marin (K-12 and College of Marin).
“We hadn’t covered school districts before,” said Stanford professor Joe Nation, who presided at a webinar Friday to release the new data. “So we now cover 3,400 total agencies in the state, including 1,700 school districts — and all of those in Marin.”
Pension debt refers to the so-called “unfunded liability,” or obligations for future pension payouts that are not currently in hand in local coffers. Those payouts are guaranteed and so will eventually have to be paid by taxpayers in some form or another, such as fee increases, bumps in parcel or property taxes, sales taxes or rate hikes, said Nation, who represented Marin in the state Assembly from 2000 to 2006. Nation, who is now project director for the Stanford Institute for Economic Policy Research, said Pension Tracker has just been updated to cover 2017 data — the latest year processed.
Including school districts to the existing data on local governments, water districts and other public agencies, California’s total pension debt as of 2017 is $1.052 trillion, or $80,643 per household using a “market” assumption of a 3% rate of return.
Using an “actuarial” 7% rate assumption — the rate used by state retirement system agencies — the total public retirement debt is less, but still $308.5 billion, or $23,632 per household.
Nation said the “market” rate is generally thought to be more realistic, according to finance specialists. Meanwhile, he said state efforts to curb the mounting pension costs are trickling down to the local level.
“This has not yet peaked,” Nation said, referring to the rising mandatory rate of pension debt contributions to be made by state school districts.
The latter is the result of Assembly Bill 1469, passed in 2014, which “more than doubles the school district required contributions to the California State Teachers Retirement System or CalSTRS, which is massively underfunded,” said Kenneth Broad of Mill Valley, a political activist, in a letter to the editor of the Independent Journal. “These mandated employer contributions ramp from 8.25% in 2014 to 19.1% in 2020, and remain at that elevated level for nearly three decades.”
“It seems logically inconsistent that California is banking record tax revenues, yet our schools are suffering cuts a full decade into a lengthy economic expansion,” Broad added. “How is this possible?”
Broad, meanwhile, said on Monday he agrees with Nation and other Pension Tracker staff that “even more troubling is the assumption that stock and other investment markets earn 7% annually. If not, the budget situation will go from dire to dystopian — the cuts will truly be savage in the next recession.”
Broad acknowledged that Gov. Gavin Newsom’s budget this year offers school districts some help in paying down the pension debt. But, he said, “It’s like a parent telling a child, ‘I’ll help you get out of credit card debt by paying your minimum monthly payment. It doesn’t do anything to remedy the underlying problem.'”
Pension Tracker’s Marin school district rankings statewide for per-household pension debt, using the “market” earning rate of 3% annually:
No. 116: Ross School District, $24,181.
No. 319: Shoreline Unified School District, $16,497.
No. 360: Union Joint Elementary School District, $15,375.
No. 541: Reed Union School District, $11,420.
No. 543: Novato Unified School District, $11,398.
No. 577: Kentfield School District, $10,715.
No. 583: Larkspur-Corte Madera School District, $10,635.
No. 607: Mill Valley School District, $9,993.
No. 688: Ross Valley School Distirct, $8,157.
No. 691: Dixie (now Miller Creek) School District, $8,157
No. 712: San Rafael Elementary School District, $7,585.
No. 733: Lagunitas, $7,149.
No. 768: Nicasio, $6,410.
No. 819: Tamalpais Union High School District, $4,991.
No. 844: San Rafael High School District, $4,224.
No. 904: Sausalito Marin City School District, $2,277.
No. 919: College of Marin, $1,786
No. 948: Marin County Office of Education, $1,005.
