As LA Unified deals with looming deficits that could reach $600 million, a recent independent Financial Report attributes a large share of it to the ever-increasing costs of health benefits for present and retired employees.
The district spends 14 percent of its budget on active and retired employee health benefits — which is more than it spends on instructional books and supplies. It is also more than the entire budget of existing classified employee salaries, which are jobs in the district that don’t require teaching credentials.
In a report for the Budget, Facilities and Audit Committee recently, the district’s Benefits Administration director, Janice Sawyer, said that the district offers a relatively generous health benefits package.
“We want to retain talent in the district; that’s why we have those health benefits,” said Sawyer. But, she notes that the population of retirees is growing, compared with the active employee base, and the district is not putting any money aside to pay for those promised benefits.
To fund retiree obligations, the district would have to sock away $868 million a year, Sawyer said.
Meanwhile, the district is making it tougher to be eligible for lifetime medical benefits. Anyone hired before 1984 needs to work only five years before retiring to get fully-paid individual and family medical benefits. Today, district employees have to work 25 consecutive years before retiring, and the age at retirement added to the number of service years must reach at least 85.