Districts Cite Financial Concerns As Brown Signs CalSTRS Budget Bill

California Governor Jerry Brown has signed a crucial piece of the new state budget into law that’s intended to stabilize the California State Teachers Retirement System, but school districts are nervous about their increasing costs.

There’s been little disagreement that something should be done about CalSTRS’ $75 billion unfunded liability. The question has always been, what? The budget deal negotiated by the governor and Democratic legislative leaders relies on increased contributions from three entities: individual teachers, school districts, and the state. Each party will send CalSTRS a little more money this year, with contributions rising in future years.

“Teachers are entitled to – and deserve – to have pensions that are solvent,” says California School Boards Association President Josephine Lucey, a member of the Cupertino Unified School District board. But she says districts shouldn’t have to shoulder more of the burden than teachers or the state.

“The amount of money, though, that school districts themselves are being asked to pay, and the last-minute – particular this year – amount, is really a challenge for many, many districts,” Lucey says.

School district contributions will rise from the current 8.25 percent of payroll to 19.1 percent over the next seven years.