Cal Teachers in 2021: 19.1% of Pay Goes to Pensions!

Over the next four years, the teachers of California will get close to a 20% CUT in their pay.  This will pay for the collapsing CalSTRS pension system—that means, in four years, 38% of a teachers salary will be going to a failed pension plan.  We currently have a teacher shortage.  I wonder how many could afford 38% of their salary going to pensions—then still pay the taxes, forced union dues, pay for a portion of their health care.  Are we setting up teachers to receive Food Stamps and other forms of welfare—obviously they can not afford to live on a teachers salary and what is left after mandatory deductions.

“The effects of Gov. Brown’s plan are starting to be felt in districts across the state. Earlier this month, San Diego Unified School District announced major, pension-induced budget cuts.  Voice of San Diego showed the district had paid $75.7 million toward CalSTRS contributions in 2014. This year, with the contribution percentage jumping to 12.58%, the cost is nearly $124 million, and SDUSD is feeling the squeeze. They’re not alone. As districts take on the majority of the contribution increases, money that could otherwise go toward raising teacher salaries, combating teacher shortages, hiring classroom aides, or expanding pre-k will instead go to paying down the state’s pension debt. Over time, districts may get less money from the state as well, as the state’s share of the contributions also ramps up.”

Could it be the CalSTRS is pricing people out of teaching?  Could it be that the taxpayers will be forced to be taxed higher to keep checks flowing.  We see in three years the San Diego schools are spending $50 million more for pensions and $50 million less for education.  Anybody willing to discuss reform now?

Photo courtesy of 401(K) 2013, Flickr

Photo courtesy of 401(K) 2013, Flickr

California’s Pension Bear Is Beginning to Roar

Kirsten Schmitz, Teacher Pensions.org  1/9/17

Back in 2014, we wrote about California Governor Jerry Brown’s plan to increase teacher, district and state contributions to the state teacher pension fund. The California State Teachers Retirement System (CalSTRS) was facing a staggering $74 billion unfunded liability, accrued over years of over-promises and lower-than-expected returns. At the time, we commended Governor Brown for taking preemptive measures to pay down those debts.

As the plan ramps up, it’s beginning to take a toll on district budgets, and it’s worth revisiting what was in that plan. Under Gov. Brown’s proposal, teacher, district, and the state pension contributions will ramp up such that, by 2021, 38 percent of each teacher’s salary will be going directly into the pension system. Districts will bear the brunt of this burden. Their costs will jump from paying 8.25 percent of each teacher’s salary in 2014 up to 19.1 percent in 2021.

The effects of Gov. Brown’s plan are starting to be felt in districts across the state. Earlier this month, San Diego Unified School District announced major, pension-induced budget cuts.  Voice of San Diego showed the district had paid $75.7 million toward CalSTRS contributions in 2014. This year, with the contribution percentage jumping to 12.58%, the cost is nearly $124 million, and SDUSD is feeling the squeeze. They’re not alone. As districts take on the majority of the contribution increases, money that could otherwise go toward raising teacher salaries, combating teacher shortages, hiring classroom aides, or expanding pre-k will instead go to paying down the state’s pension debt. Over time, districts may get less money from the state as well, as the state’s share of the contributions also ramps up.

At the same time, teachers may feel frustrated. They may not know that district contributions are going up; after all, those contributions don’t show up on their paystubs, even if they are real costs born by their employer. Yet, teachers’ own contributions went up as well, and those are already showing up as lower take-home pay.

Perhaps worst of all, most of the new money is going to pay down pension debts, not to fund actual teacher retirement benefits. Most California teachers will never see a benefit from their pension system and are simply subsidizing past debts and the retirements of very long-term veterans.

Existing legislation ensures these district contributions will continue to rise through at least 2021. This is better than ignoring the mounting debt, but it will dramatically hinder school in their ability to serve teachers and kids. Instead, California teachers may want a refund.

 

 

About Stephen Frank

Stephen Frank is the publisher and editor of California Political News and Views. He speaks all over California and appears as a guest on several radio shows each week. He has also served as a guest host on radio talk shows. He is a fulltime political consultant.