A report by a team from a Stanford University public policy organization makes a case that taxpayers and educators should heed.
The growing cost of pensions for public school teachers is driving local school taxes while eating away at the local voters’ generous support for raising those taxes.
Backers of the local tax measures typically go to great lengths to separate the need for more funding and rising pension costs.
No district has gone to the voters for a tax explicitly to help cover teachers’ pensions. That would be a tough sell, especially when most voters don’t have pensions separate from social security.
The current budgetary dilemma for public school districts is the state-approved formula for rescuing the giant California State Teachers’ Retirement System, which is severely underfunded to meet its long-term obligations.
To fix that fiscal mess, the state Legislature approved a formula for catch-up funding coming from three sources: the state, local districts and teachers.
But the teachers’ union complains that pay packages being offered are falling short of growing costs Marin educators incur for their pensions and other benefits.
Meanwhile, at the bargaining table, districts are claiming they are strapped by pension costs that are expected to rise by double-digit percentage increments in the coming years.
School boards aren’t exactly innocent bystanders in this mess. They approved the contracts, including pensions and other retiree benefits. Those promises are factored into their local shares in the state’s formula for fiscally righting CalSTRS’s listing ship.
Based on the state’s fix-it formula, districts’ obligation for promised pensions has gone from 8.25% in 2014 to 19.1% in 2020 — and it is expected to remain at that higher level for nearly three decades.
Districts’ revenue falls short of that projected steady increase. Without reforms, the current situation is unsustainable. Local trustees prefer to blame Sacramento.
What is the local trustees’ solution? They have made cuts. They are also turning to Marin taxpayers. The blueprint is to go to the voters and make a case that programs will have to be slashed and that smaller class sizes will be a thing of the past.
The report by the Policy Analysis for California Education, based at Stanford’s Graduate School of Education, is appropriately titled, “The Canary in the Gold Mine: The Implications of Marin’s Rising Pension Costs and Tax Revolt for Increasing Education Funding.”
It specifically looks at parcel tax elections in the Kentfield School District, where a 2016 tax measure was rejected by voters, and one in the Mill Valley School District, which was approved by a margin of only 23 votes.
Both measures needed two-thirds voter approval, a high political mark to surpass, but one that local schools, for years, have achieved thanks to the high priority in which local voters place their public schools.
Voters’ growing focus on rising pension costs is becoming a bigger problem in winning a super-majority, a reason why backers of tax measures go to great lengths to avoid the issue.
While Marin County Superintendent of Schools Mary Jane Burke is hoping for a financial life raft from the state, in Sacramento — from Gov. Gavin Newsom’s office to the Legislature — there is little interest in significant reforms that could help to rein in long-term costs.
Few local trustees have broached the issue loud enough to generate any local public attention.
The “canary in the gold mine,” aka Marin voters’ generous support for school taxes, is showing signs of shortness of breath. The report shows what’s ailing the bird; it’s starting to choke on the rising cost of promised pensions.
