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SB 1457: School District Liabilities (2006)

Summary

Summary
Some California school districts have been making promises they can’t keep.  For example, the Legislative Analyst’s Office estimates that some districts have unfunded liabilities that are as high as $13,624 per pupil. SB 1457 would have required districts to develop a plan to pay down their liabilities over a term of 30 years or less. 

Final Status and Text

SB 1457 is no longer active. Its final status was:
Did not pass the Legislature

You can read its final text on the Legislature's Bill Information site.

Background Information

Some California school districts have committed to providing non-pension retirement benefits—such as lifetime health care—to emplyees without establishing long-term plans to pay for these long-term costs.

For example, Los Angeles Unified School District has an estimated unfunded non-pension benefits liability of more than 10 billion dollars.  That’s more than what United Airlines owed.  To manage its liabilities, United had to fire over 23,000 workers, reduced pensions and benefits for thousands of others, and declared bankruptcy. 

On a per pupil basis the unfunded liability numbers are even scarier.  The Legislative Analysts Office estimates that some districts have unfunded liabilities that are as high as $13,624 per pupil.  That’s nearly double the TOTAL amount we spend - on average, per student - just to cover the health care costs of retired employees.  In other words, we’d need to double per pupil spending AND close the school, to cover these costs.

Reports