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Report Documents Increased Pension Costs on Schools, Contributions Set to Triple by 2024

November 13, 2017

A new report shows that school district contributions to pension funds reached a record high in 2017 and are poised to climb even higher, hindering the ability of California school districts to invest in the classroom and provide students with the supports needed to succeed in college, career and civic life.

The California School Boards Association documents the effects of the pension crisis in a report released on November 8, titled The Impact of Pension Cost Increases on California’s Schools. Drawing on data from a 2017 survey of school board members across California, the report found that:

  1. 43 percent of respondents have already cut programs that are included in their Local Control and Accountability Plan (the plan every California school district develops to indicate its goals for students and the actions it will take to achieve them)
  2. 68 percent of those who have not yet cut programs anticipate making cuts and/or engaging in deficit spending in the next two to three years

Despite pension reform at the state level, pension costs are set to double by 2021. By 2024, district contributions to pensions will have tripled from 2014 levels. As a result, districts are forced into difficult choices that undermine the education of California’s 6.2 million public school students. Immediate action is needed to mitigate this problem so that all students have better access to the resources needed for a high-quality education. CSBA has distributed a copy of the pension report to every member of the State Legislature and called on them to address the pension crisis.

For some school districts, higher pension costs are already outpacing Local Control Funding Formula (LCFF) increases, meaning they have less money for students now than they did before the program was implemented. This trend will only intensify in future years as scheduled LCFF revenue increases expire and employer pension contributions continue to grow.

The spike in pension contributions comes as school districts and county offices of education are facing increased financial pressure from rising healthcare, transportation, and utility costs and the burden of new, unfunded state mandates. California already ranks near the bottom nationally in school funding and staffing levels; skyrocketing pension costs exacerbate that problem.

Source:  California School Boards Association

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