The $593 Billion Pension Scheme Crushing SFUSD

Why can’t SFUSD just settle the strike? It’s a simple thing to demand: pay teachers more. But there are limits to what we can do, and the reason is an age old problem in state funding: Old stealing from the young, as is usual in 2026 America.

That’s what’s happening right now in San Francisco. The people on the picket lines and the parents scrambling for childcare have a common enemy—and it isn’t each other. It’s a pension system that’s been running a 20-year fraud.

Archived tweet

Old stealing from the young, as is usual in 2026 America. https://t.co/BJp6aYgmrS

Kim-Mai Cutler @kimmaicutler February 11, 2026

The Numbers Don’t Lie: 538% vs 123%

Since 2006, SFUSD’s total revenue has grown 123%—from $537 million to $1.2 billion. That’s healthy growth by any measure. But pension spending? It’s up 538%. From $31 million to $198 million. Retiree health benefits jumped 450%, from $8 million to $44 million.

Together, these two line items consume $250 million every single year. Every dollar flows to retired employees. Zero reaches a working teacher. Zero reaches a classroom.

The union demands 9% raises. The district offers 2%. That gap exists because the money is already gone—claimed by retirees before a single working teacher gets paid.

The Man Who Saw It Coming

David Crane sat on the State Teachers Retirement System board in 2006. He warned them their assumed 8% investment return was fantasy. He said 6.2% was realistic. His reward for telling the truth? The state Senate kicked him off the board.

He was right. CalPERS earned 6.45%. STRS earned 7.2%. But they based their calculations on 8.25%. That gap between assumed returns and actual returns? According to the SF Standard, it created $593 billion in unfunded liabilities. Half a trillion dollars that could have funded salaries and classrooms instead went to covering a bet the pension board was warned it would lose.

A Constitutional Violation in Actuarial Clothing

The California Constitution prohibits the Legislature from creating any debt or liability exceeding $300,000 without voter approval. Yet every time the state makes a new pension promise based on investment returns that aren’t guaranteed, they’re creating massive liability. No vote required.

When pension funds fall short, taxpayers are on the hook for the difference—automatically. Over the last decade alone, the state has covered more than $100 billion in pension shortfalls created by this practice.

A constitutional violation dressed up in actuarial jargon. That’s exactly what this is.

Old Stealing From the Young

Kim-Mai Cutler nails it: old stealing from the young. Current teachers can’t get raises because money goes to retired teachers. Current students suffer because classrooms are underfunded. Same pattern as NIMBY housing—Boomers got theirs, pulled up the ladder.

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https://t.co/RN2IWZo7OV https://t.co/P2H8IFSUNX [Quoting @sfstandard]: Opinion: The district can’t pay its teachers because it’s buried under retirement costs that were predictable, avoidable, and arguably unconstitutional. 📝: David Crane https://t.co/apu2z0v0fH

Laura Fingal-Surma 🚡 frontier urbanist @urbanistvc February 11, 2026

And this isn’t just San Francisco. LAUSD spends $3.15 billion per year—over 15% of its entire budget—on debt service and retired employees. That’s the pattern across California. Rising revenues consumed by rising retirement costs. Current teachers and students holding the bag.

The tragedy is that teachers and parents aren’t enemies—they’re both victims of what is, in practical effect, a disastrous scheme that has hurt younger generations and current teachers working in the system today. Until Sacramento confronts the pension lie, every contract negotiation in California will end exactly like this one: teachers demanding raises the district can’t afford, not because there’s no money, but because retirees already claimed it.

The strike is the symptom. The disease is a pension system built on a sketchy and ill-advised pension scheme. Time to name the real villain.