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Measure E Parcel Tax Funds Can Be Used for Teachers’ Pensions

The California State Teacher’s Retirement System (CalSTRS) realized a loss of 27% for the fiscal year ended June 30, 2009 and plan to lobby for changes to state law to increase contributions to the fund from local school districts. Alameda Unified School District in-house counsel Danielle Houck tacitly conceded to Action Alameda News that funds raised through Measure E could be used to fund teachers’ pensions.

The CalSTRS website says that CalSTRS is the largest teachers’ retirement fund in the U.S., and the second largest U.S. public pension fund. As of February 28, 2010, CalSTRS had $132.6 billion in assets under management. CalSTRS has 833,000 members. CalSTRS income comes from member contributions, contributions from school districts, investment earnings, and appropriations from the State General Fund.

Like most pension funds, CalSTRS took a big hit last year in the derivative-fueled Wall Street decline that began in 2008. As of June 30, 2008, CalSTRS had 12.8% of their portfolio committed to real estate investments; as of December 31, 2008, 16.1% of their portfolio was in real estate; as of June 30, 2009, that figure was 11%

Operation of CalSTRS is governed by state law; each year the organization publishes an update to their “Teachers’ Retirement Law” guide, which, for January 1, 2010, exceeded 800 pages. According to the guide, employers (school districts) contribute “an amount equivalent to 4 percent of salary for each participant employed by the employer.”

In a July 21, 2009 press release announcing preliminary estimates of the fund’s decline in value for the year ended June 30 of the same year, CalSTRS announced that “While investment earnings are the single largest source of funds to pay benefits, the historic market declines show investments alone cannot close the funding gap. Closing the gap will require legislative action in the future to increase contributions made by the school districts and the state.” CalSTRS maintains a web page documenting the state of legislation that would impact the fund or members.

Action Alameda News asked AUSD in-house counsel Danielle Houck if Measure E funds would be used to pay for teachers’ pensions. Ms. Houck responded:

The purposes of Measure E are clearly stated in the ballot language. One of the stated purposes is to support small class size. Small class sizes require teachers.

CalSTRS did not respond to requests from Action Alameda News to confirm that they have begun legislative efforts to increase school district contributions to the pension fund to close benefit funding gap.

8 comments to Measure E Parcel Tax Funds Can Be Used for Teachers’ Pensions

  • Lori

    I have no problem with the parcel tax contributing to teacher pensions. They are underpaid and overworked and deserve some security in their retirement in return the huge benefits they provide our community.

  • We’re just making sure people know where their tax dollars go.

  • Anonymous

    How much is the proposed increase in school district’s contributions to teacher’s pensions? It sure would be nice if the parcel tax was limited to CORE instruction. I am thoroughly fed up with all the government employees and the overly generous pensions that their unions have obtained at taxpayer expense. Why isn’t the same social security I get, enough for them? Did they work harder or longer or more years? Tell me the teachers are not eligible to retire until they are 66 years old and I’ll consider voting for the parcel tax.

  • The ballot measure doesn’t say. Have a look at http://www.CalSTRS.com. It’s a worthwhile question to pose to the District as to the current % of general fund budget that goes to pensions.

  • DHL

    the $132.6B is sufficient. If the market debacle affected them that badly, then clearly they were not risk-averse enough in the management of the fund. Not my problem. Also, I agree with anonymous. Salaries run from $40 to $80k for a 9 month year. That’s $4,400 per month (no including bennies!) to $9,000/month. I don’t want to spend a penny reinforcing the $132.6B fund!!!!!!!!

  • nomoretaxes

    Thank you Action Alameda for all of this information but it needs to get out to the voters of Alameda. We need signs! The yes campaign is very vocal & the sneaky mail-in-ballot could get tossed out with the trash. My property was recently re-assessed to reflect the current market values & my property taxes have been reduced. I DO NOT WANT TO HAVE THEM INCREASED only to throw more $$$ at the school district!

  • […] Measure E Parcel Tax Funds Can Be Used for Teachers’ Pensions | ACTION ALAMEDA News […]

  • According to the San Francisco Chronicle this morning, California education officials are debating whether to even apply for President Obama’s “Race to the Top” funding provided to those state initiating real reform, tying teaches’ salaries and benefits to student test scores, allowing unlimited numbers of charter schools, etc. California failed to qualify in Round One largely because the teachers unions failed to sign on, assuming they can get more money from state taxpayers than from the feds, without losing any perks.

    Poorly performing schools, even in Alameda, schools which fail to educate minorities, which see nearly a third of their students fail to graduate, don’t deserve to be rewarded with even greater tax funding. Prop. 13 was intended to end the madness of inflated taxes and bloated public payrolls! So long as our teachers refuse to adopt reforms, I refuse to vote for their continued bloated payrolls and poor investment management.

    D’Green

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