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On April 26, the Sun-Star published a commentary by David Crane, a former board member of the California State Teachers Retirement System, wherein he basically stated that if Proposition 30 passes all of the money generated would go to pay STRS pension liabilities. None of that money would go into the classroom. This is because teachers are "unconditionally guaranteed" lifetime pensions by their school districts and because the investments made by STRS over the past few years have earned only 60 percent of what the STRS Board had forecast.
This $4.5 billion shortage in investment earnings must be made up by public, and the only way to do this is through additional taxation.
In order to get Proposition 30 passed the governor and the Democratic legislators have passed so-called pension reform laws. However, these new laws don't go far enough. What is needed is a retirement system where teachers pay more out of their income for their retirement and where a pension program that is at least part 401(k) is used as a retirement vehicle. That won't happen if we keep increasing taxes to fund the pension system.
