My Priorities · Fiscal Responsibility

The move I’m proudest of is one you’ve probably never heard about

Fiscal discipline isn’t about spreadsheets. It’s about making sure a bad budget year never costs your kid their teacher.

I learned fiscal discipline the hard way — helping lead one of the nation’s ten largest cities through the depths of the Great Recession. When you’ve had to make those decisions, you never forget what’s really at stake in a budget: it’s not a number on a page, it’s whether the adult standing in front of a classroom is still there next fall.

So let me start with the fundamentals, because they matter. We’ve balanced the budget every single year. We hold reserves at over double the state’s minimum requirement — and in some years closer to three times it — a genuine cushion, managed right up to the level the state allows, so we can absorb a bad year or an unplanned event without cutting into kids. And we refinanced bonds to save taxpayers over $13 million, retiring that debt sooner and leaving more in residents’ pockets in the years ahead.

The second mortgage nobody talks about

Now the part I’m proudest of — and the part almost nobody hears about. Like most public agencies, our district carries pension obligations it’s paying down over decades. Think of it as a second mortgage: a large, long-term debt with payments you have to manage year after year. The actuaries tell us those annual payments are going to jump sharply around 2030 to 2033. And that money comes straight out of the same general fund that pays our teachers.

Most districts are going to wait for that squeeze and then scramble. I didn’t want to do that to our kids. So rather than wait, we set up a restricted federal trust — an IRS Section 115 pension trust — and have been steadily banking money into it. Because it’s restricted under strict federal rules, that money is protected for exactly one purpose. We’ve put about $7 million into it in a relatively short time, with roughly $3 million more expected this year.

This isn’t an idea I stumbled into locally. For years, my work across the country has been helping governments get ahead of exactly these pension obligations — work that helped bipartisan reforms pass in six states. I’ve brought that same foresight everywhere I’ve served: as a member of Roseville’s Community Priorities Advisory Commission, I urged the city to prepare the same way. It didn’t set up a Section 115 trust, but it did create a dedicated pension reserve fund and has been steadily funding it ever since — real, lasting security for the city’s employees and their retirements.

Here’s the payoff, in plain terms. When that pension bill rises and other districts are pulling the increase straight out of their classrooms, we’ll be able to pay it from the trust instead. It’s a shock absorber for a bump in the road we can already see coming. I’d advocated for exactly this kind of foresight years earlier at the city level; here, we did it even better.

On time, on budget — on purpose

We’ve applied the same discipline to construction. Serving on the Finance and Facilities Committee, I helped move our capital projects — including West Park High School and the district office — to a design-build approach, where one accountable team is on the hook to design and deliver on time and on budget. They have. Public projects don’t always work out that way, and that’s exactly why the delivery method matters.

“Fiscal responsibility isn’t about hoarding money. It’s about making sure the dollars are there, year after year, to educate our kids.”

We’ve all seen what happens when a district lets its finances drift: painful layoffs, bigger classes, cut programs, sometimes state oversight. That’s the outcome discipline prevents. Because our district stays healthy while many around us struggle, we can do the things that actually reach students — pay teachers at the top of our peer districts, protect athletics and the arts, and keep expanding opportunity. Keeping our dollars in the classroom isn’t a slogan. It’s the whole point.

Pete Constant chaired the finance committee of one of the nation’s largest cities and has served as a trustee on multi-billion-dollar public pension funds. He is a founding board member of the Equable Institute, a bipartisan think tank focused on retirement and fiscal policy, and the founder of Verdara, which helps charter-school teachers and employees secure their retirements. He is RJUHSD’s Trustee for Area 2. See the full Fiscal Responsibility record →