Last night I listened into a webinar for San Francisco parents anguished about the strike situation at SFUSD. No one mentioned the real reason SFUSD doesn’t pay its current teachers more. This is that reason:
SFUSD’s spending on pension and other retirement costs has grown at nearly five times the rate school revenues have grown, squeezing out funds needed for teacher salaries. The increase in pension spending was entirely predictable and avoidable. I know because, as a board member of the State Teachers’ Retirement System (STRS) in 2006, I predicted it and told the board how to avoid it. Instead, the State Senate kicked me off the board. The LA Times wrote about my defenestration in an article entitled “Can The State Win Its Pension Gamble.” In short, at that time STRS based upfront pension contributions on the assumption it could earn 8% per annum. I said STRS should not assume more than 6.2% and that school districts would face huge deficits if it continued to assume 8%. I was right and today’s teachers, students and taxpayers are paying the price. Had STRS adopted my recommendation, SFUSD’s pension spending would not have soared. To add insult to injury, pension spending is going even higher. That’s because even though the stock market is more than 400% higher than it was in 2006, STRS is less well-funded than it was then because of accretion of the phony discount created by its fraudulent investment return assumption.
STRS and its sister pension fund PERS are fraudulently creating more new debts every day. They still assume an inflated investment return assumption because that creates debt in favor of public employees to which elected officials in the pockets of public sector unions turn a blind eye.
From On California by David Crane
