Pension Crisis for Affluent School Bosses

The Pension Crisis is not really a crisis at all in most states. It is true that if every state employee were to simultaneously retire, there would not be enough money to cover their guaranteed pensions. But this will not and cannot happen since employees aren’t even eligible to receive benefits until they’ve worked a minimum number of years. It is also true that most pension systems have lost considerable value as a result of the financial meltdown, but this was caused by Wall Street speculators, not greedy unions. This, too, should not be seen as a crisis, since the values are expected to gradually recover over time.

Fearful that the current losses in state pension plans might be replaced through increased taxes, the wealthy went on the offensive, blaming the unions (which they absurdly argue are the primary political powerhouse) for extracting extravagant benefits at taxpayers’ expense. The only solution, they argued, is cutting benefits, delaying when workers are eligible to receive those benefits, and forcing workers to pay more each month to bolster the funds.

One of the ways they are trying to cut benefits is by capping the maximum income that can be used to calculate future benefits. In California, the recently passed pension “reform” bill will cap benefits at $132,000.

In the long term, this will harm most employees, since, with inflation, $132k will eventually become a modest income, easily earned by bus drivers, teachers, and other moderate income state employees. At present, however, the majority of state employees earn far less than this.

School administrators, though, will feel the pinch of this new cap.

The San Francisco Chronicle reported today that there are 77 retired superintendents earning pensions of more than $200,000 a year. James Enochs, for example, who had been superintendent of the Modesto school system, tops the list with an annual pension of $301,000. Fredrick Wentworth, formally of the San Joaquin County Office of Education earns $296,000 per year and Edward Hernandez Jr., formally head of the Rancho Santiago Community College District brings in $291,000. Marilyn Miller, retired chief of the Hillsborough school district gets $268,000 per year and Johanna VanderMolen, who once headed the Campbell Union School District, retired at $267,000 per year.

The Business of UC: Higher Paying Clientele

The California Master Plan for Education guarantees that every academically-eligible California student will gain admittance to the prestigious University of California. At least it did. Due to existing cuts of $500 million, and with further cuts expected, UC has announced it will no longer admit every qualified California student.

In order to make more money, the UC regents have decided to turn away local students to make room for out-of-state and international students who are required to pay $23,000 more in tuition each year than state residents, the Los Angeles Times reported today. Last year, many state residents who were turned away from the UC campus of their choice were referred to the relatively new Merced campus, which is seen by many students as the least desirable of UC’s many campuses. Over 12,000 students were referred to Merced last year, according to the Bay Citizen. However, even Merced is now starting to fill up, which means that many eligible state residents will be denied entry into any of the UC’s campuses.

UC Berkeley, which is the second most desirable campus in the UC system after UCLA, saw its admissions of non-state residents increase from 13.6% in 2009, to 31.2% in 2011, wrote the Bay Citizen. The Los Angeles Times said that non-resident admissions at UCLA went up to 29.9% last year. However, state residents have additional problems, even if they are lucky enough to be admitted. In-state tuition is projected to double for undergraduates to $20,000 for the 2012-2013 school year, if taxes aren’t raised to close the state’s remaining $13 billion budget deficit.

There was a time when a quality higher education was both affordable and attainable in California. As recently as the 1980s, fees to attend UC Berkeley were as low as $500-600 per semester, while a student could find a room in a communal flat for less than $100 per month. In those days, it was entirely feasible for students to work their way through college and not depend on their parents or have to saddle themselves with tens of thousands of dollars of debt. What has changed is that tuition and fees for both the UC and CSU systems have increased much faster than tuition due mostly to cut backs by the state. These cutbacks have been justified as necessary to close the yearly budget deficit, a problem that seems to get worse each year.

State budget problems are typically portrayed as “natural” or unavoidable. However, they are almost always due to declining tax revenues that have resulted from changes in tax law. Consider the following statistics published yesterday in the OB Rag:

• California’s richest residents currently only pay 7.8% of their incomes on state and local taxes.
• In 1997, only 579 wealthy residents got away without paying any taxes. Today there are 2,431wealthy residents who are paying absolutely no state taxes.
• Corporate taxes provided 12.4% of the General fund last year, down from 14.6% in 1980-1981.
• Corporate tax cuts implemented in 2008 and again in 2009 are estimated to cost the state $2 billion in revenues.
• The corporate tax rate is officially 8.84%, but is effectively only 4.7% due to loopholes.

Californians Support Public Sector, Blame the Rich

Huck/Konopacki Labor Cartoons

A recent poll, commissioned by the California Federation of Teachers, (and reported in the OB Rag) found that 56% of California voters had a favorable view of public employees (only 13% had an unfavorable view) and 61% supported their right to collectively bargain. While Democrats held public employees in the highest esteem, with 63% perceiving them in a positive light, Republicans also viewed them favorably by a margin of more than 2-to-1.

Contrary to the propaganda of right wing politicians and pundits, most California voters blamed the state’s budget crisis on the wealthy and on corporations for not paying their fair share of taxes, not on public employees. More than half of voters (52%) said the wealthy and corporate interests not paying their fair share was the bigger problem affecting the state’s budget woes, while less only 32% thought the bigger issue was public employee compensation.

Ruling Class Traitors Want to Tax the Rich

Working in These Times had an interesting fluff piece this week about wealthy “turncoats” demanding increased taxes on themselves. They were covering a protest outside Manhattan’s Waldorf Astoria Hotel in which protesters rallied against Governor Cuomo’s service cuts and demanded that millionaires pay their fair share. Amongst the crowd, they observed two protesters holding a sign saying “Another trust fund baby for taxing the rich! Let’s pay our fair share!”

The two “turncoats” were Elspeth Gilmore and Jessie Spector, Co-Director and National Organizer, respectively, of Resource Generation, a national nonprofit organization that challenges young progressives with wealth to use their privilege and resources for social change. According to Working in These Times, Resource Generation has been working with about 1,500 young affluent adults for the past 13 years, through conferences, workshops and philanthropic projects. They have also teamed up with Wealth for the Common Good, which advocates changing tax policy.

I place the term “turncoats” in quotes because these people are not truly class traitors. They do not ask the wealthy to give up their wealth or their power. They do not advocate for a classless society or an end to capitalism, wage slavery or bosses. They are simply liberals who support the existing system, but want it to be reformed. It is noteworthy that in 13 years of organizing, they could only muster 2 of their members (both officers in the organization) to show up at the Waldorf demonstration and that they have utterly failed to have any effect on tax policy. In fact, over the course of the past 13 years, tax rules have changed to benefit the wealthy to an even greater degree.

The rich do need to pay more in taxes, much more. But it is not going to happen because a handful of wealthy liberals ask them to. It will happen only through mass mobilizations, strikes, occupations and other tactics that cut into their profits. The ruling elite do sometimes consent to policies that benefit working people, but only when necessary to keep capitalism running smoothly.

Bourgeois Charter Schools Sucking LAUSD Dry

Image by violentz

El Camino Real High School, in Woodland hills, will become one of the latest schools to defect from LAUSD and become a private charter school. El Camino is in a middle class neighborhood and is the highest performing school in the district. Everything seemed to be working, so why change now?

The answer is that the school would receive $415,000 more annually in state money and greater flexibility in how to spend it. Charter school funding is allocated differently than it is for traditional schools. In 2009-2010, California charter high schools received an average of $7,369 per student, while traditional schools only received $6,417. For LAUSD, however, it will be major loss of revenues, as funds that would have been allocated to LAUSD to fund El Camino will now go directly to the schools’ new board of directors.

The El Camino case highlights a disturbing trend. In this climate of budget cuts and economic uncertainty, going charter seems like a way to increase funding, when everyone else is losing it. However, by going charter, a school skims off resources from all the remaining public schools, thus further impoverishing them and decreasing their ability to provide safe and effective learning environments. For middle class schools like El Camino, it allows privileged parents to insulate their children from poor and working class kids, both physically and fiscally. But unlike private schools, their privileged education is subsidized by everyone, rather than coming out of their own pockets. This tendency will likely accelerate as education budgets continue to be slashed to pay for tax breaks and subsidies for the wealthy and their businesses. It will also exacerbate problems for the remaining low income schools, which will not only lose funding, but also top students who will defect to the better funded and higher performing schools, resulting in lower test scores and higher failure rates under NCLB. This in turn will force more low income schools to convert to charter schools under NCLB’s regime of punishments for low performing schools.

In California, charter school conversions are on the rise. This is particularly true in LAUSD, Campbell Union, in Santa Clara County, and San Diego Unified. Campbell is a wealthy enclave of San Jose. In San Diego, much of the charter chatter is occurring in upscale Point Loma, where wealthy and middle class parents are trying to insulate their kids and resources from the working class and poor of neighboring communities, like Ocean Beach. In both San Diego and Campbell, the trend seems to be about social privilege, as it is at El Camino, in Woodland Hills.