How not to overplay your hand
San Francisco schools were closed for one week due to a union strike. As a parent whose child is impacted, I am very angry at the union. The San Francisco school district has been in a financial crisis for years. The state watchdog has issued warning that they may run out of money. Spending cuts have to be made in 2025, just enough to avoid the state takeover. This delayed the crisis at best. More cuts of this magnitude are necessary this year. Contentious measures, like merging under enrolled schools, have made no progress after many years.
With a long term decline in enrollment, the district is facing a structural deficit. Simply put, we are spending more than we earn on an ongoing basis. This cannot continue.
Blind to all the crises, the union went on strike and demanded a big raise.
These people really refuse to believe there is financial trouble, the ugly facts they choose to ignore, as the San Francisco Chronicle Editorial Board put it.
I understand the teachers do not make enough to live comfortably in San Francisco. But so is everybody. It is not realistic to expect any employers to pay average workers enough to comfortably afford San Francisco. That’s life. The teachers were not being underpaid. Their pay ranks second among twenty comparable school districts. They received a 6% raise in 2022, and $9000 (about 9%) in 2023. Then another 5% in 2024. Their salary range of $70k to $130k is already comparable or higher than private school teachers, even before considering all the benefits and pensions of being public employees. Asking for another 9% to 14% raise, which the independent factfinding report points out, is just well above the average.
If today’s expense is a concern, it is overshadowed by the SFUSD's biggest liability — lifetime benefit after retirement. This is a very generous offer to your employees — if you don’t have to think about the long term financial implications. SFUSD did just that. They offered the benefit but did not fund them. An audit has found out they have a $649 million unfunded OPEB liability. This is an even bigger problem than the $530 million of pension liability. As there are more retirees the benefits and pension expenses will just keep growing. In 10 to 20 years time, by the time our children run the schools, it is plausible that the total benefit payment would exceed teachers’ salary payment. When most of the money has been designated to those who no longer work for the school, it will be even harder for them to give teachers a raise and to attract talents. You can’t even reduce these expenses by layoff. So it has to fall even harder to the working teachers.
How did we get there, our children rightfully ask? Blame us (and the people before us). We make these promises on your behalf to solve our problem today. Now you will pay the debt that we have incurred. I find this tragically irresponsible.
According to the union, the district can well afford the increase. The shortfall is due to their mismanagement. I really hope they are right, that we do not have a structural deficit, that there is no need for layoff and to shut down schools, that there are piles of money hidden that could have paid for all these.
But I also fear that we have erred, not in the way the union said, but erred on systemically underestimating the extent of the financial problem, using one time COVID relief to plug long term short fall, overlooking warnings that auditors have pointed out for years.
This situation is not unique to San Francisco. West Contra Costa Union similarly struck and won a deal in December. The district now scrambles to cut payroll by 10% or face insolvency. The Sacramento School District is also in a dire situation. They are trying to avoid state receivership by cutting 400 staff and reducing student services.
Making reckless financial decisions is in nobody’s interest. If this pushes the district into insolvency, the school loses, the union loses, and most importantly, the children lose.