The Great California School Squeeze threatens education

Call it The Great California School Squeeze.

The state is stuck in a school funding paradox: Even though our schools have never had higher per-pupil spending levels, school districts face financial peril.

Why? Because The Squeeze is a torture machine with three ratchets.

First, escalating obligations for retirement benefits grow so fast (more than 100 percent this decade in many districts) that they gobble up the rising funding, leaving little for today’s students and teachers.

Second, with birth rates low and immigration stagnant, the number of students is stagnant in some schools and declining in others. Since school funding is granted on a per-student basis, fewer students means less funding, even at the higher rates.

Third, new state laws and school measurement systems are forcing schools to tackle very difficult social challenges: Poverty, inequality and the achievement gap among minority students.

So The Squeeze, in essence, requires schools to produce millions more educated California adults out of a smaller student population, even as the retirement system grabs a larger share of available funds.

Actually doing all that might be impossible, but it’s also essential if California is to reverse its education decline.

In 1970, according to a Chapman University report, Californians were better educated than the average American; the state had a higher percentage of adults with college degrees and a lower proportion of adults with less than a high school education than the nation as a whole. By 2012, California had the second-highest percentage of adults with less than a high school education in the country (and had fallen in the percentage of adults with college degrees).

Reversing such trends requires massive new investment. But under The Squeeze, school districts are freezing budgets, laying off teachers, limiting instructional hours and, in districts from Oakland to Pasadena, moving to close schools. And this is in good times. When recession hits and the markets crash, The Squeeze could force massive cuts and even district bankruptcies.

Where could new money come from? Not from today’s kids and teachers, who are already taking hits under The Squeeze. Even if it were legal to claw back pensions from retired teachers, it wouldn’t be fair, since teacher pensions are modest and teachers aren’t eligible for Social Security. Unfortunately, there is no way to recover money from previous state and local politicians who made retirement promises without properly funding or disclosing them. (Much of The Squeeze comes from recent efforts to accelerate district contributions to pension funds after years of underfunding).

If you’re surprised to be reading all of this, that is by design. School districts often hide the growing size of their retiree obligations deep in budget documents. Powerful teacher unions mislead the public by suggesting The Squeeze is fictional or blaming their favorite bogey- man: charter schools. Political candidates offer few ideas for tackling The Squeeze.

That doesn’t mean there aren’t any.

While teacher and school staff pensions must be protected, cost- of-living increases should freeze and school districts should stop giving retiree health benefits, which are usually unfunded. Retired teachers can rely on Obamacare, Medicaid and Medicare like the rest of us.

But breaking the grip of The Squeeze will require much more.

Two dysfunctional state systems hurt today’s kids. One is a complex Prop. 13-based tax system that protects older homeowners. The other is a complex education funding system, built around Prop. 98, that ties education spending to the budget and economy, rather than to students’ needs. It effectively acts as a cap on education spending.

Both systems need replacing. The Prop. 98 funding formula should die, and education funding should be tied to educational needs. Doing that will require tens of billions of new dollars, which would have to come from a massive tax reform.

Of course, even such transformational reforms might not be enough for schools, now that the state’s leading Democrats want to grab new tax dollars to provide a single-payer universal health care system. That might be a worthy goal. But California first needs to rescue the kids from The Squeeze crushing our single-payer education system.