San Francisco Chronicle Examines Effect of Providing Retiree Health Benefits on Contra Costa County School District

The San Francisco Chronicle on Sunday looked at the effect that the labor contract signed in the 1970s between the West Contra Costa Unified School District and its employees -- which promises fully funded health coverage to employees and their spouses for the rest of their lives in exchange for accepting lower salaries -- is having on the county's schools. The cost of health benefits for the district's 1,814 retirees and 2,631 employees is "one of the most glaring reasons" why the school district had to cut $16.5 million from its 2004-2005 school year budget, the Chronicle reports. The district, which serves children in Richmond, Kensington, Hercules, El Cerrito, El Sobrante, San Pablo and Pinole, paid more than $30 million for employee benefits this year -- $21 million for current staff and $9.5 million for retirees. The total was $5 million more than last year because of rising health insurance costs, which increased 23% in 2003 and 18% in 2004, according to district Assistant Superintendent Pat McWilliams. According to the Chronicle, the district by 2010 will spend more than $12 million each year on health benefits for retirees. Half of the state's 1,000 school districts do not cover retiree health benefits, and the majority that offer any health benefits to retirees end their assistance when retirees reach age 65 and are eligible for Medicare, the Chronicle reports (St. John, San Francisco Chronicle, 3/14).