Teachers working for the San Francisco Unified School District could be paid more if the school district took advantage of federal and state subsidies. The district incurs annual expense of more than $70 million — more than $15,000 per active teacher — to provide unnecessary health insurance subsidies to retired employees. The district pays that expense with a combination of cash and debt, which is how the district has accumulated more than $700 million of extra debt. The subsidies are known as “OPEB” (“Other Post Employment Benefits”) and are provided on top of pension benefits.
The subsidies aren’t needed. That’s because retirees age 65 and over have access to Medicare and retirees under age 65 and earning less than $75,000 per year are entitled to subsidies from the state and federal governments through Covered California, including new Middle Class Subsidies enacted into law by the state last year:
The Bay Area is expensive. SFUSD should help its teachers by taking advantage of subsidies offered by others so it can spend more on salaries. By eliminating OPEB, SFUSD could eliminate $700 million in debt, save more than $30 million in cash each year, and join other California school districts and governments that have chosen to protect services for residents and jobs and wages for current employees.
Govern For California supports lawmakers who legislate in the general interest.