Ballooning pension costs mean LAUSD and other California school districts are headed for cuts, Stanford study says

Pension payouts are growing so fast that California’s school districts are being forced to lay off staff and close schools, a Stanford professor and author of a new study says.

LA Unified will have to cut spending by about 3 percent in 12 years in order to pay for the ballooning cost of its retirees’ pensions, according to the study. And it’s not alone. School districts, municipalities, and the state will have to contribute more to their retired employees’ pensions, which are “crowding out” money spent on services like teachers, librarians, and healthcare workers, former Democratic Assemblyman Joe Nation found in the recently released 200-page report called “Pension Math: Public Pension Spending and Service Crowd Out in California, 2003-2030.” Nation is a professor of public policy at Stanford University.

“Pension costs have crowded out and will likely to continue to crowd out resources needed for public assistance, welfare, recreation and libraries, health, public works, other social services, and in some cases, public safety,” Nation wrote.

In an interview, Nation said some school districts have started cutting back spending already by closing and consolidating schools, trimming programs, and not filling vacant positions.

“If 85 or 80 percent of their expenditures are on people, it’s hard to do anything but cut that largest share of the pie. That’s the challenge that they have,” he said.

LA Unified was one of the three school districts Nation studied in his report. The others were Mill Valley in a wealthy area of Marin County and Visalia Unified, a high-poverty community in the Central Valley.

By 2029-30, Nation estimates that 12 percent to 13 percent of LA Unified’s operating budget will be spent on pensions.

But LA Unified’s own projections show that by 2031-32, 22.4 percent of available funds will be spent on pensions. Click here to read more: http://laschoolreport.com/ballooning-pension-costs-mean-lausd-and-other-california-school-districts-are-headed-for-cuts-stanford-study-says/