Copyright© 2007 by School Services of California, Inc.

                                      Volume 20                   For Publication Date: January 5, 2007             No. 1

Ask SSC . . .
 

Even if Proposition 98 Isn’t Increased, Wouldn’t the State Provide Increased Funding for Higher STRS Rate? 

Q.        I read your recent article about the Attorney General’s opinion that a higher school employer rate for the State Teachers’ Retirement System (STRS) would not automatically trigger increased funding under Proposition 98 (see “Attorney General Opines: No Requirement to Increase Proposition 98 for STRS Rate Increase” in the December 15, 2006, Community College Update, page 275). But couldn’t the state still provide increased funding for school agencies? Didn’t the state do that the last time there was an STRS rate increase? 

A.        You are correct on both counts. Just because the Proposition 98 minimum funding level might not be increased for an increase in the school employer rate for STRS, that doesn’t mean that the state couldn’t provide additional funding to cover the higher cost from existing Proposition 98 funds.  

            The last time there was a STRS employer rate increase was in 1986-87, when the school employer rate went from 8.00% to 8.25%. In that year, the cost of this 0.25% rate increase for each district was computed and folded into a district’s base revenue limit as a permanent increase per ADA. While there is no statutory requirement that such an increase be provided for any future rate increase, there will certainly be a big push for that to happen, in order to avoid the situation where the rate increase would require cuts in
K-12 programs.

 
—Paul Goldfinger