By Thomas Himes, Los Angeles Daily News | http://bit.ly/UtJYAv
6/10/14, 8:54 PM PDT |Delving into several costly employee salary issues, the Los Angeles Unified school board on Tuesday approved salary increases ranging up to 9 percent for some district workers to offset higher pension costs.
The district also continues negotiating with its largest employee group, teachers, whose union considers the latest offer of a 2 percent raise insulting.
The deals approved on Tuesday included 1.2 percent for construction workers, 7 percent for clerical workers and others represented by the California School Employees Association (CSEA) and 9 percent for sworn school police officers. Those raises were primarily intended to offset higher contributions to the pension system required under new state rules that prevent the district from picking up some of its employees’ pension contributions.
“It was very important for the district and superintendent to make sure the employees were made whole,” LAUSD chief labor negotiator Vivian Ekchian said. “Otherwise, it would have been a pay cut for the employees.”
Still, the raises may not entirely even out the loss, officials acknowledged, because of taxes on the additional income.
Those groups are also in negotiations for an additional pay raise, as board members Tuesday approved starting new negotiations with offers of 2 percent.
Ekchian said a number of other districts have agreed to similar swaps in an effort to ensure their employees don’t lose pay.
In addition to footing the bill for employees’ rising pension costs, Los Angeles Unified’s share of pensions contributions will jump by an estimated $40 million next year and continue climbing until they just about double over the next seven year under state plans to make retirement systems sustainable.
“These are going to be long-term obligations we need to take into account as we create this multiyear budget,” said LAUSD’s director of government relations, Edgar Zazueta.
Employees who received raises Tuesday pay into California’s Public Employees’ Retirement System, which will cost the district an additional $86 million per year, after a phase-in period concludes over the Fiscal Year 2020-21.
The district’s share of teacher pension contributions to the California State Teacher’s Retirement System would more than double, rising from $213 million this year to $493.5 million by Fiscal Year 2020-21, under Gov. Jerry Brown’s proposed plan, LAUSD’s assistant director of labor relations Gifty Beets said.
Those figures, however, assume that no one receives additional pay hikes.
The school board Tuesday voted to offer additional 2 percent raises to some groups who received raises the same day.
One group that hasn’t received raises, teachers, was included in that 2 percent offer, which would cost the district about $53.7 million per year.
That proposal, however, was called an “insult” by union leaders at a rally outside United Teachers Los Angeles’ headquarters earlier this month.
The union wants a 17.6 percent raise that would cost the district an extra $472 million per year. UTLA President-elect ALex-Caputo Pearl said the union’s opening proposal was realistic, as teachers have lost pay through furlough days over the past several years.
“The money is there for a substantial pay increase,” Caputo-Pearl said.
Superintendent John Deasy said the district will need to focus on pay in the upcoming weeks, “because we have way outside demands on compensation.”
District and union officials will hold their first round of face-to-face negotiations this year this week.
These “salary hikes” are hardly that; they are offsets (or pass-throughs) to charges levied as payroll deductions imposed unilaterally, legislatively and administratively by the State of California on district employees. No employee will be taking home more money because of these “hikes”; no employee will receive increased benefits because of these “hikes”.
As the article points out some (if not most) employees will be taking home less money because these “hikes” will push them into different tax brackets because this compensation is taxable as income.
I am not sure about CalPERS, but CalSTRS (the state retirement system for teachers) is a constitutional and fiduciary obligation of the State of California. The failure of the system would require a state bailout, The current underfunding is the state’s responsibility and the governor+legislature have responded by:
- Letting the hole grow deeper during the the (not so) Great Recession, and then:
- levying additional charges on school districts and employees – that will have to be paid for in some fashion (accounting sleight-of-hand?) by the Prop 30 “windfall” and LCFF/LCAP. I’m not sure the voters would have voted the way they did if they thought Prop 30 was going to bail out the supposedly self-sufficient State Employee Retirement Systems.
CalPERS Headquarters Building, Sacramento, CA. CalSTRS Headquarters Building, Sacramento, CA.
The CalPERS+CalSTRS pension mess is the pension mess; in digging out of it a lot of stuff gets tossed around around. Some of it is bound to get on someone!
All blame cannot go to Sacramento. Locally It seems preposterous to me that the LAUSD administration is just now entering into salary negotiations that cannot possibly be concluded before the District’s final budget must be sent to the County Office of Ed at the end of the month. And the reader should feel free to substitute the adjective or explicative of their choice for ‘preposterous’. ‘Duplicitous’ was my first choice before I kindly compromised to ‘preposterous ‘– and I am limited by the LAUSD ‘’naughty language’ internet firewall.