California’s Pension Sink Hole Just Got Deeper

*Cross posted from’s blog.

California’s pension debt is dizzying. The state’s collective unpaid pension debt is now $198 billion, up from $6.3 billion in 2003.  The California Teachers’ Retirement System (CalSTRS) makes up over a third of this debt, $74 billion unfunded. (These numbers look even bigger depending on what discount or interest rates are used.)

Complicating matters, the state can’t reduce any future benefits under an obscure, rigid legal doctrine known as the California Rule. Under the rule, workers are basically promised the same or better benefits as laid out on their first day of work; workers get what they’ve earned so far as well as future earnings. (A new ballot initiative may allow for structural reform and better public accountability, but is still up in the air.)

Put this together and it means that a younger generation of workers are stuck with the state’s massive bill. As we write in our new report, pension reform cuts typically fall on new workers, and now is the worst time in the past three decades to be a new teacher.

See for more info on California and other states, including interviews with former San Jose Mayor Chuck Reed and current Executive Director of the California School Employees Association, Dave Low.

5 Replies to “California’s Pension Sink Hole Just Got Deeper”

  1. Leslie Khan seems to be implying that pension need to be cut for older workers to improve the benefits for new workers. That begs the question, when the new workers become older workers will you call for cutting benefits for them to make room for the next generation of teachers? It is highly unethical to attract someone to a job with a certain level of benefits only to take them away when the employee is vested. The problem is not benefits at all but revenue. California per pupil spending of education is near the bottom of the 50 states. The state is spending 3.8% less this year than it did in seven years ago. If education is to be improved the conversation needs to be about increasing pensions.

  2. Some recent news:
    1. Eduwank claimed that old teachers are devouring young teachers. You know, it is NO different in medical partnership practices or legal practice. Look it up, please.
    2. Arnie talked today about “aggressive change” in education and that teachers deserve our sincere thanks. Yeah, yeah, yeah…in no time flat there will another kick in the teeth.
    3. STRS is at 85% future liability funding. Pretty much standard and the BEST in the nation. Go check their website……CA credit rating is also solid. Another good indicator.
    4. Eduwank is right on in talking about young workers getting saddled with current debt. Well….except that has been going on since the end of WW2. Why it all of a sudden is a huge concern….agitprop paid for by anonymous board members.
    5. What is claimed to be research is NOT. It is pure opinion. Nothing that Edu…. does is peer reviewed in the widely known and accepted fashion. It is better to think of what they do as ADVERTISING for their never openly stated assumptions and objectives. Better to think of Edu…as a professional lobbying organization staffed with the typical revolving door folks from our federal government.
    6. If it is debt that concerns Edu…. then get rid of the FDOE, or at least follow Stiglitz’s lead on tax reform, that BTW, pretty much harpoons much of the non-profit tax status for lobbying organizations.

    7. Or….get rid of all the tax subsidies and double your money in seven years school reform measures. I have always said that if there is gonna’ be good ol’ cronyism corruption, then can I at least get a part of the action….

    So, with education in the dumpster due to messy “innovation” and the need to move fast…imagine if that were the credo in building our next generation of fast attack nuke subs…what is the fall back plan? I mean…we are talking about the future of the kids we love and do not know, and it is a national security threat, and we could add buzzillions to our GDP and eliminate the debt if we could get something like .0000001 standard deviation increase in student learning (more garbage from the edu-reform posse).

    Here is my number of points plan:

    1. Eliminate the FDOE.
    2. Peel the rotten onion of edu-reform right down to the sweet center. Eliminate PARCC, SBAC, pedagogy reform, and textbook monopolies, and all of the non-profit hangers on.
    3. Preserve the CC, the sweet center of that onion. Improve it. Nurture it.

    4. Begin a serious discussion of teacher morale, recruitment, retention, and respect. Edu… and all the other posse members have delivered a first class beat down to teachers. Even a bystander like me, an addicted fisherman…stories on that later…can see that.

    5. Turn over all schooling to the DOD.
    6. Begin a draft of teachers.
    7. Treat them just like enlisted sailors. Give them a contract of enlistment.
    8. Pay for their housing, their allowances, and give them solid health care.
    9. Promote them. Let it be the decision of the principal.
    10. Protect their private life confidentiality, their evils, and their conduct from prying eyes of non-profit muck-rakers.
    11. Discipline them immediately. Even characterize their discharge if the conduct is particularly reprehensible.
    12. Entitle them to JAG representation, at no cost to them, if they are accused of wrong doing.

    14. Have a set pay scale with comp pay for arduous duty or scarce skill sets.

    15. Expect more and hold to a higher standard of accountability anyone who is NOT in the classroom. Thinks in terms of this: “What have you done precisely for the learning that went on in that physics class today.”

    16. No longer accept policy, or talking, or data gathering, as being some kind of contribution to what a kid is doing with a physics book at the moment.

    17. Acknowledge that the infantry in education is TEACHERS. Give them that respect. Then acknowledge that the rest of the blob is nothing but a bunch of rear echelon……..Treat them like that and PAY THEM LESS.

    18. Acknowledge that the REAL EXPERTS are the boots on the ground, the dial twiddlers, the day by day in the mix, folks. Call them what they are: Operational leaders. Pay them more. That means school sites receive top pay. And adopt their recommendation. Stop the outside in approach with remote, can’t do anything else, policy makers calling the shots. Honestly, if you want things to be as screwed up in the military as they are in education, let the defense contractors behave in the same manner the edu-reform blob does.

    19. Acknowledge that teaching, like the military has two equally important aspects: Performance and MORAL OBLIGATION. Stop treating moral obligation as some kind of private sector metric with compensation gradations. The private sector had not done a particularly swell job at self policing and in controlling business cycles. They say they cannot predict human behavior. Perhaps they could see a twitch of human behavior in children.

    20. Stop the promise of present, certain punishment, and a future promise of at best MEDIOCRE COMPENSATION. It is going nowhere. The burn-out in the public school reform effort is palpable. The well-off want no part of this mess, and the now demoted middle class and poor want only blood. Reading Hayek, or Smith reveals that the rich have done a particularly good job throughout history of turning the serfs on themselves.

    21. Talk to a teacher. Meet one. Pretty normal folks. Most are good hearted if not a bit off kilter. You gotta’ be to take the beating they have. Reminds of a dog at the shelter. You see the love in their eyes, even with four broken legs, and a hacked off tail. Edu…, you remind me of the person that continues to beat that dog. Teachers NEVER ONCE claimed to be some policy experts, or some super duper non-profit, powerful lobbyist who cow-tows to powerful people. They just were. I admire that honesty.

    The solutions are pretty straight forward. So where is the will, integrity, and honesty to do this RIGHT NOW. Let me tell where this moral courage is right now…it resides in that same dark place of the heart that tempts a golfer to “mismarks (cheats)” his scorecard, or the flyfisherman who lies about his skills or catch.

    So, how does Edu… plan on repairing education. You guys certainly have broken things. But that is not the goal. How do you make it work. Hint here guys…it will never happen unless folks a heck of a lot more talented and smart than you take up the work. How do you see that happening? Any guesses? The military has done it. There is big, fat hint, for you conceits.

    Now, where am I. I am in Santa Barbara sitting in a deck chair. I fished this morning and hooked two corbina and two shovel nose on the fly. For anyone who knows what I am talking about, that is no small feat.

    I am honest. The one corbina I landed took me to my backing, had me run down the beach, seriously bruised one knuckle on my fly reel handle, all while I stumbled back out of the surf, kept my feet and a tight line. At 24 inches and 6 lbs it is a seriously good fish.

    Edu…you broke it, you delivered the beat down, you had fun, it was all business as usual for you, but….

    Stuff is broke, and most folks look at time as the REAL METRIC. TIme to show some success.

    Because when Obama leaves, Iran and foreign policy go to the front burner.

  3. The reincarnation of Hunter Thompson from Santa Barbara. I like that: Eduwank. Roterham sure does wank. It is quite a hustle he has going to fund his fishing jones. Throw rocks, break it and then claim to know how to fix it. He has no clue. Has he fixed anything? You have some great points. I don’t know about the DOD though. My experience with them is worse than FDOE. What has the military done besides lose the last two big wars. Have taught in LAUSD, Beverly Hills, New Orleans, Sacramento City and now at Calif. State Prison Sacramento Level 4 Maximum Security. Worked with severl exmililtary none has much good to say about DOD. Anyway, Did you use soft shells for bait. That is one big corbina. What beach you at? I used to surf fish in Manhattan Beach for Corbina and Perch and dive for clams. I’m coming down to Cambria and then on to Hermosa with a new hand plane and paipo board in Sept. I would like to meet and talk with you.

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