SFUSD Financial Update
- Retirement costs are consuming $2,000 per student this year.
- Retirement liabilities grew 15 percent in one year, to nearly $1 billion.
It doesn’t take deep financial analysis to figure out that SFUSD’s exploding spending on pensions and other retirement costs is the principal reason behind inadequate staffing of and pay for active teachers and that in the absence of reform, worse is yet to come. But the sponsors of a ballot measure to impose $50 million in new taxes on San Franciscans for SFUSD aren’t disclosing those material facts. $50 million won’t even cover annual interest expense on the retirement liabilities. The new tax would be a band-aid that temporarily and dangerously covers up a cancer that should be attacked now.
SFUSD should reform its retirement plans before asking San Franciscans for more money. The district could adopt a reform similar to that enacted by Glendale that utilized California’s excellent Obamacare exchange and pension benefit increases could be suspended until pension funds are better funded. Tens of millions of dollars would be freed up for active teachers.
Providing more money to SFUSD before it reforms retirement spending is like providing heroin to an addict. Using a bandaid to cover up SFUSD’s retirement spending problem would allow that problem to grow and create even bigger problems down the road. A new tax that doesn’t solve the inadequate staffing and pay problem is unfair to San Franciscans struggling to survive in an expensive city. Sponsors of the tax measure should tell the truth.