Large numbers of school districts will be laying off teachers in the coming weeks in a desperate attempt to balance their very weak budgets. Meanwhile, Governors across the U.S., Democrat and Republican, alike, are demanding cuts to teachers’ pensions as a way to help balance their even weaker budgets. The problem is that by firing teachers, they will have less money going into the pension systems, thus exacerbating the problem.
In California, the CalSTRS system lost 25% over the past several years due to the recession. It currently has a $40.6 billion unfunded obligation for the 2009 fiscal year, and is projected to be insolvent by 2042, unless it can get a $3.8 billion infusion each year for the next 30 years. As in most states, there is talk of increasing teachers’ contributions for existing and new teachers, while decreasing benefits for new teachers. But with budgets in the mess they are in, few districts are in a position to hire new teachers.
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