SACRAMENTO, Calif. (AP) — California schools are on the hook for $24 billion in future health care costs for their retirees, a mountain of debt that’s forcing some districts to curb benefits or spend less on teacher salaries and classroom equipment, according to a new state report.
Los Angeles Unified School District boasts a whopping 56 percent share — or $13.5 billion — of the unfunded liability, although it educates nine percent of California’s public school population. It’s historically provided some of the most generous retiree health benefits, including lifetime coverage for retirees and their spouses.
Teachers’ union representatives argued good health care is an essential tool for recruiting and retaining teachers. But the looming debt means newer teachers are offered skimpier benefits and less money is available to spend in classrooms.
“Districts have to pay our bills and our basic bills are employee costs,” said Teri Burns, a lobbyist for the California School Boards Association. “As that goes up, there’s just that much less that’s available for everything else — books and modernization, computers, professional development.”
Beyond retiree health benefits, California’s teacher pension fund is facing nearly $100 billion in future payments it can’t currently afford.
“A hundred and 25 billion is like an anchor for families with kids in public schools,” said David Crane, a Stanford University lecturer who writes on state pensions. “It drags down the performance of schools because the money doesn’t even make it into the classroom. It’s a really big problem.”