Wasteful Retirement Spending Hurts Bay Area Teachers, Students, and Communities they Serve 

Last month, the West Contra Costa Unified School District (WCCUSD) was issued a “lack of growing concern” determination from the Contra Costa County Office of Education. Simply put, this means the district is teetering on the brink of financial collapse.  

In the report issued last month, the County Office of Education noted that the district “….is no longer fiscally healthy and is unable to meet its financial obligations.” Furthermore, the district’s problems are expected to come to a head in the 2023-2024 school year.  

In the report, several reasons were given as to why the WCCUSD was headed for fiscal disaster. However, the report fails to account for a large source of its current deficit, that being: “Other Post-Employment Benefits” (OPEB). According to David Crane of Govern for California, “…60 percent of its deficit is accounted for….” via OPEB spending.  

While it is common for an employer to provide benefits for retired employees, OPEB goes well-beyond the norm. Crane notes that the San Francisco Unified School District (SFUSD) uses OPEB benefits to subsidize retirees who get medical coverage via Medicare, and those receiving coverage through Covered California. Both practices are ludicrous given that such practices disregard current employees who must find a way to live day-to-day in one of the most expensive regions of the country. 

Data on TransparentCalifornia.com shows that in 2020, the average “Regular Classroom Teacher” in the SFUSD earned $69,248.45 a year. Crane points out that the SFUSD spends $5,888 dollars on each premium for retirees, as it is one of the “…. few districts to subsidize retirees on Medicare.”, and “…SFUSD doesn’t take advantage of generous federal subsidies available under Obamacare for retirees under age 65.”  

This practice effectively takes away money that could go to employees currently working for the SFUSD. These same employees may be struggling to make ends meet in an area where affordable home ownership is almost impossible. 

More importantly, in the case of the WCCUSD and other Bay Area school districts, OPEB spending comes at the expense of the students, parents, taxpayers, and communities they serve. 

When measuring OPEB spending by student, Crane shows both the WCCUSD and SFUSD spend over $500 per pupil. If such funds are not going to be paid to the teachers instructing these students in the SFUSD or WCCUSD  (the average pay for “Teacher Regular Education” in WCCUSD for 2020 was only $73,440.55), they should be reinvested to provide resources for the students served by the district.  

The same report that highlighted WCCUSD’s fiscal crisis, notes one of the factors contributing to the financial spiral is “…..declining average daily attendance (ADA)….”. Instead of spending more than $500 per student on OPEB, why not reinvest that money in solutions that could ensure students are showing up to class every day? This would help eliminate one of the causes of this financial mess, and lead to long-term benefits for students, families, and local communities  

If you are interested in learning more about school district spending, you can find all the latest numbers at Transparentcalifornia.com