Good morning, California.
“We need to repeat that performance year in and year out, on average, over the next 30 years.”— Christopher Ailman, chief investment officer for California State Teachers’ Retirement System, announcing a return on investment of 8.96 percent in the last fiscal year.
School pension crisis is upon us. Who’ll pay?
Teachers’ pension debt could swamp school budgets.
California’s public schools are facing a grave financial threat as they struggle to protect pensions crucial for teachers’ retirement, CALmatters’ Jessica Calefati reports.
Numbers: Retired teachers’ pensions average $55,000 a year. The California State Teachers’ Retirement System pension fund sits at $223.8 billion. The unfunded liability is $107 billion, Calefati reports.
In years to come, schools may need to use more than half of all new tax revenue to cover growing pension obligations, leaving little extra for classrooms. The situation exists even after school districts, teachers, and the state agreed four years ago to pay more to reduce the unfunded liability.
Dennis Meyers, executive director of the California School Boards Association, told Calefati: “We simply need more revenue, and we’re out here waving the white flag, looking for relief.”
Translation: The next governor, Legislature and Superintendent of Public Instruction will have no choice but to focus on pension debt. More school districts will turn to voters for help. Some school districts will fall into receivership.
P.S. I asked the two candidates for Superintendent of Public Instruction for brief statements about what they’d do about unfunded pension debt.
Marshall Tuck: “We need a great teacher in every classroom. That means paying teachers fairly and living up to our obligations. But it also means confronting this challenge, not ducking it. A fair solution will require shared sacrifice and creative thinking.”
Assemblyman Tony Thurmond’s campaign didn’t offer a statement.