BILL ANALYSIS �
AB 1819
Page 1
Date of Hearing: May 16, 2012
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 1819 (Ammiano) - As Amended: May 2, 2012
Policy Committee: PER&SSVote:4-2
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill requires charter schools to make the California State
Teachers' Retirement System (CalSTRS) and the California Public
Employees' Retirement System (CalPERS) available to their
employees and eliminates the requirement for charter schools to
inform applicants of the particular type of retirement coverage
offered at the school.
FISCAL EFFECT
This bill will result in more teachers and classified employees
becoming members of and/or accruing additional time with CalSTRS
and CalPERS respectively. Both the employee and employer will
contribute to the retirement systems. As a result of the
increased CalSTRS membership, there is a direct financial impact
to the state for increased CalSTRS contributions, estimated at
approximately $5 million.
To the extent CalSTRS and CalPERS are not fully funded, an
increase in members and/or benefits, places potential pressure
on the General Fund. In addition, any increase in local
education costs puts pressure on the General Fund/Proposition 98
funding formula.
COMMENTS
1)Purpose . According to the author, "AB 1819 seeks to ensure
that employees of charter schools in California have adequate
access to public retirement benefits. Employees of charter
schools are funded by public dollars and serve public school
children populations, and should have the option to choose a
defined benefit plan for their service to our children and
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communities. A second-rate retirement is another slap in the
face for these already under-paid and under-appreciated
employees, and does not reflect their service and sacrifices
made to educate our children."
2)Background . A charter school is required to tell staff
members the retirement options available to them. If a
charter school chooses to make CalSTRS and/or CalPERS
available, all employees of the charter school who qualify for
membership in the system are entitled to coverage. In
addition, all provisions of existing law apply to the same
extent they do to other public schools in the district that
granted the charter. CalSTRS states there are 989 active
charter schools, and 908 of those schools have chosen CalSTRS.
3)Charter schools . A charter school is a public school that may
provide instruction in any of grades K-12. It is usually
created or organized by a group of teachers, parents and
community leaders or a community-based organization. A
charter school may be authorized by an existing local public
school board, county board of education or the State Board of
Education (SBE). Existing law requires a potential charter
school to submit a petition to a governing board or SBE for
approval to establish the school.
Specific goals and operating procedures for the charter school
are detailed in an agreement (charter) between the sponsoring
board and charter organizers. A charter school is generally
exempt from most laws governing school districts, except where
specifically noted in the law. As such, charter schools are
not required to follow existing statute related to the
suspension or expulsion of pupils enrolled in non-charter
public schools.
4)Support. The California Federation of Teachers, the sponsor
of the AB 1819, argues the bill ensures that employees of
California's charter schools have adequate retirement coverage
by providing them with a public employee pension plan through
CalSTRS or CalPERS. They note charter schools are funded by
public dollars and serve public school children; therefore,
charter schools employees should have a defined benefit plan
for their service to our children and communities.
5)Opposition . The California Charter Schools Association
Advocates argue AB 1819 would impose new costs on charter
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schools that already strive to maintain financial stability in
the face of daunting challenges. They point out given charter
schools' limited resources, it is fiscally prudent for an
individual school to develop a retirement plan that provides
the right benefits for the right costs, and that many charters
offer CalSTRS and CalPERS under existing law. The opponents
note, however, many charter schools provide alternative
retirement options, including 401(k) and 403(b) retirement
plans and this flexibility affords charter schools the ability
to provide their employees with retirement plans that best fit
the needs of the employees.
Analysis Prepared by : Roger Dunstan / APPR. / (916) 319-2081