California school districts are asking Gov. Gavin Newsom to delay scheduled increases to their pension payments and to divert money from a variety of relief funds to help them get through the economic downturn caused by the coronavirus outbreak.
The superintendents of five major school districts, including Sacramento City Unified, outlined the requests in a letter to Newsom on Friday.
Schools started closing in mid-March around the state, and they will remain closed for the rest of the school year. Learning has gone online, creating logistical challenges including the need for digital devices for all students.
“The ramp up for distance learning is not cheap,” said Kevin Gordon, whose lobbying firm represents California school districts. “It’s really expensive.”
The state is protecting funding for schools’ regular staffing costs and providing an additional $100 million in emergency money, according to the letter. Federal coronavirus aid will provide an $1.6 billion in short-term emergency money for California schools, the letter says.
But the money won’t be enough to ensure access to online learning, provide meals to children and adults and to provide “overtime, stipends and differential pay to maintain a minimum level of staffing,” the letter states.
The superintendents ask the state to direct more money from general relief funds — both state and federal — to schools.
“In addition to our vulnerable populations, students whose parents are experiencing job loss, homelessness, or who may be in foster care will need additional supports to ensure their academic success,” the letter states.
The superintendents ask Newsom to declare a budget emergency to use the state’s rainy day fund, known as the Budget Stabilization Fund, to bolster a stream of school funding that can vary with economic changes.
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During a downturn, California law allows the state to dramatically reduce school spending. The superintendents are asking the governor to avoid dropping school budgets to minimums.
“The time is urgent to support and protect California’s efforts to close educational achievement gaps,” the superintendents wrote in the letter.
The letter was signed by the superintendents of school districts in Sacramento, Los Angeles, San Diego, Long Beach and Riverside County. Sacramento County Superintendent of Schools David Gordon made similar requests in a separate letter.
The superintendents ask the state to freeze school districts’ contributions to the California State Teachers Retirement System and the California Public Employees’ Retirement System.
The districts have been paying an increasing amount of money into the systems each year since 2013 under long-term plans to improve the pension systems’ financial health.
School districts pay a percentage of each teacher’s salary toward their pensions. In 2013, districts paid a rate of 8.25 percent of salaries toward teachers’ pensions. Last year, the rate was about 18 percent. It’s scheduled to rise to about 19 percent this year before dropping back down to about 18 percent next year.
“The CalSTRS funding plan assumes contributions to the system will continue as scheduled,” CalSTRS CEO Jack Ehnes said in an emailed statement. “The employer contribution rate, which is set in statute, is largely protected from market volatility and slated to go down slightly when the Teachers’ Retirement Board has the authority to adjust the rate in 2021-22. If contributions are delayed now, they could be even higher in later years.”
Pension payments have also been increasing for school employees that aren’t teachers, who have pensions with CalPERS. Combined, the contributions are on track to take up one-fifth of districts’ general funds, the letter states.
CalPERS in a written statement warned that delaying payments could increase costs over time for employers.
“We recognize the financial issues that the current environment has placed on schools. Any deferred payments today will only result in higher costs in the future. We have a fiduciary responsibility to fund the system to pay long-term benefits. We will work with our employers to provide the tools and programs to help during this difficult time,” said CalPERS spokeswoman Megan White.