Delays would mean bigger costs for shoring up teacher pension fund
SACRAMENTO — The longer California’s leaders delay shoring up the cash-strapped teacher pension fund, the more money it will cost taxpayers in the long run, according to an analysis presented to lawmakers on Wednesday.
If lawmakers and Gov. Jerry Brown eliminate the fund’s $71-billion shortfall over the next 20 years, the extra contributions needed from the state, schools and teachers would total a little more than $180 billion in that time period.
But if they put forward a 60-year plan, the total cost would be $622.8 billion. The analysis was created by the California State Teachers’ Retirement System.
These financial figures lay at the center of the current debate over addressing the pension fund’s shortfall — how quickly should contribution rates be increased to avoid higher costs in future years?
Assembly Speaker John A. Pérez (D-Los Angeles) said he wants a plan in place this year, while Brown has said he’s willing to wait until next year.
State Sen. Mimi Walters (R-Irvine) wants to increase the state’s payment into the pension fund by up to $2 billion in the next fiscal year, which begins July 1. Although that’s less than legislative analysts say is necessary, it would still help lower the shortfall.
Walters did not attend Wednesday’s hearing because she had another meeting, said her spokesman, Everett Rice. He said problems with the pension fund are not new, and lawmakers need to begin paying more now.
“So far no one has taken any action,” Walters said in a statement. “The Legislature has held multiple informational hearings, but has yet to implement a solution.”
Rhys Williams, spokesman for Senate leader Darrell Steinberg (D-Sacramento), said Walters’ proposal “oversimplifies a complex budgetary consideration” and could “squeeze out vital investments in low- and middle-income families and kids.”
He said lawmakers are already working on a long-term plan to address the problem over time.
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