Despite historic revenue gains, California’s public schools are in financial trouble. While California’s public schools often suffer financial distress during recessions, their current plight is alarmingly taking place during an economic recovery and after a large tax increase. The principal cause is exploding spending on pension and retiree health care obligations.
State funding for schools is up nearly 60 percent compared to six years ago:
And spending per pupil now exceeds $15,000 per student:
But less and less money is reaching classrooms because more and more money is being diverted to pensions and retiree health care. For example:
Smaller districts are also climbing steep pension cost hills:
In total more than $250 billion will be diverted from California classrooms to finance unfunded retirement promises. That’s five times more than Bernie Madoff stole. Even the 2008 federal bank bailout doesn’t compare because in that case taxpayers got all their money back plus profits. The money already stolen in the Great California Classroom Robbery —it’s truly a theft, as explained below — will never be recovered and provides a devastating illustration of how “debt devours the future,” as Thomas Piketty puts it in Capital in the 21st Century. The victims are schoolchildren, young teachers and taxpayers.