Retiree Health Costs Strain School District
Retiree health care costs for the San Francisco Unified School District totaled $30 million this year and are expected increase, while federal funding for the district is expected to decrease because of declining enrollment rates, the San Francisco Chronicle reports.
The district has lost about 1,000 students annually for the past several years. Officials expect the trend to continue through 2011, which would result in $50 million less in federal funding than the district received in 2001.
The financial strain caused by health care costs for 4,900 district retirees was worsened by a district policy that required teachers to work just five years in and retire from the district to receive lifetime health care benefits. That policy was changed in 2004 to require new teachers to work 20 years in the district before receiving the benefits, but employees such as custodians and cafeteria workers still must work just five years in the district to receive lifetime benefits.
In addition, San Francisco voters in 2000 approved a mandate that the city, school district and city college district expand health care benefits for retirees, including paying half the lifetime benefit premiums for one dependent.
According to Jill Wynns, senior member of the Board of Education and chair of its budget committee, schools were unable to raise money to pay for the additional benefits. She added that most of the money from the state -- such as an additional $2 billion for school districts statewide included in Gov. Arnold Schwarzenegger's (R) fiscal year 2006-2007 budget proposal -- must be used for specific purposes like playground equipment or musical instruments.
As a result, any cost-of-living increases provided by the state are used to pay health care costs, Myong Leigh, district director of policy and planning, said (Knight, San Francisco Chronicle, 6/1).