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Employee Pension Costs Poised to Soar in Santa Monica-Malibu Public School System

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By Niki Cervantes
Staff Writer

January 26, 2018 -- Pension costs are jumping by double-digits, health and welfare benefits are rising as well, and per-student spending jumped almost a quarter in just five years, nearly all of it fueled by employee salaries and benefits.

Welcome to the fiscal reality of the Santa Monica-Malibu Unified School District (SMMUSD) as it begins the process of devising a budget for the 2018-2019 school year.

In a special meeting Tuesday afternoon, the School Board received an outline of what issues it will need to contend with as it knits together a budget for the coming fiscal year that starts in July.

A five-year forecast being used by the board shows $116.2 million in total spending for 2018-2019, as of now, compared to $ 114.5 million in the current budget.

By the 2021-2022 fiscal year, total expenditures are projected to rise by about 12 percent, the forecast shows.

In the same period, though, the cost of pensions through the California State Teachers’ Retirement System (CalSTRS) jumps 42 percent, from about $7.5 million now to $16.8 million in five years.

Total pensions for employees in the California Public Employees' Retirement System (CalPERS) soar from the current $2.6 million to $4.8 million in that period.

The cost of benefits reaches nearly $37.4 million by the end of the forecast, a 32 percent jump.

A comparison to six other districts presented to the board showed SMMMUD’s spending of $12,521 per student was second only the district in Beverly Hills, which spent $14,663 per student. Nearly all was tied to personnel costs.

Also included in the comparison were the public-school districts in Manhattan Beach, Palos Verdes, Las Virgenes, Culver City and El Segundo.

Tuesday’s presentation was by Melody Canady, the district’s assistant superintendent for business and fiscal services, and Gerardo Cruz, director of fiscal services.

The workshop came shortly after the release of Governor Jerry Brown’s proposed $190.3-billion state budget for the 2018-2019 fiscal year.

SMMUSD, like public school systems in general, relies heavily on state funding.

Brown’s budget stashes away an estimated $5 billion dollars to help weather a recession.

But the proposed budget also speeds up funding for Brown’s 2013 education law (the Local Control Funding Formula) to full funding.

Brown provides $3 billion for the program.

As it now stands, though, big ticket items like pension costs at SMMUSD -- and other California school districts -– “will continue to rise with no relief from the State,” the report to the school board said.

Of the SMMUSD’s total expenditures this year, 86 percent are wages and benefits -- the highest expenses included in the report.

A separate chart in Tuesday’s presentation showed the district’s per pupil spending rising to well above $12,000 by the 2015-2016 fiscal year to reach a 24 percent increase.


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