Earlier this month Sacramento City Unified School District authorized 11 teacher layoffs to help address a $27 million deficit. But those layoffs are unnecessary. SCUSD should lay off an unnecessary expense instead.
SCUSD incurs more than $50 million of expense every year to provide unnecessary health insurance subsidies to retired employees. The district pays that expense with a combination of cash ($33 million in 2019) and debt, which is how the district has accumulated more than $500 million of subsidy debt. The subsidies are known as “OPEB” (“Other Post Employment Benefits”). SCUSD’s are generous:
They are also unnecessary. 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 just last year:
By eliminating OPEB, the district could eliminate $500 million in debt and save more than $30 million in cash each year. The district’s governing board has the power:
There is no reason to lay off teachers to maintain an unnecessary subsidy. Such subsidies are bad enough in good times. In bad times they are unconscionable.
Govern For California supports lawmakers who legislate in the general interest.