NEWS

Gordon’s $1 billion pension debt

Cleveland's failing superintendent has a bigger pension debt than the district's budget and needs another levy in 2019

The next time failing Cleveland school superintendent Eric Gordon “skins and grins” his way through the neighborhoods asking for another tax levy, voters should ask him about the $1 billion retired employee pension bill he’s accumulated.  Gordon’s budget for educating 36,000 Cleveland and some suburban school children was $921 million in 2017.  That same year Gordon’s long term debt for public employee pensions exceeded $1 billion.

Gordon’s staggering $1 billion pension debt is identified in Ohio Auditor of State David Yost’s 2017 Comprehensive Annual Finance Report (CAFR).  Gordon and his financial officer, Derek Richey, explain how they set-up Cleveland taxpayers for another levy in 2019. 

Eric Gordon has administrators earning around $200,000 a year who’ll retire with pensions of $125,000 a year for life. Hiring 312 new workers in 2017 inflated the school district’s already more than $1 billion pension fund liability as shown in the state auditor’s CAFR.

The CAFR reveals that Mayor Frank Jackson’s appointed superintendent and school board inflated the district’s 2017 workforce by 312 employees.  Manpower went from 5401 in 2016 to 5713 in 2017. 

Mayor-appointed school boards have failed Cleveland students

Wages cost Cleveland taxpayers $382.7 million and another $138.6 million for medical and pension benefits.  Gordon also negotiated pay raises in 2017 with the Cleveland Teachers Union and seven others.  Pensions, alone, cost Cleveland taxpayers $78 million in 2017.

Yost’s CAFR shows that Gordon and Jackson’s hand and cherry-picked school board is going to run out of “balanced budget” money in 2019 and need another levy to operate without a deficit in 2020.

Cleveland voters have been digging deep into their pockets since 2001 to pay and re-pay for new and renovated school buildings through the passage of construction, operating and maintenance levies.

Despite successful levies in 2012, 2014 and 2016, the state auditor’s CAFR shows Gordon’s inflationary spending is creating an even larger long term pension fund liability that will continue to divert money from programs for students to support the six-figure and high five-figure pensions of provenly-failed administrators.

Host’s audit identified several financial highlights that sets Gordon up to ask Cleveland voters for more money in 2019. 

 Total current and other assets decreased by $28.0 million and capital assets increased by $15.9 million, resulting in a net decrease in total assets of $12.1 million in Governmental Activities.
 Total short-term liabilities increased by $7.5 million and total long-term liabilities increased $170.5
million, resulting in a net increase in total liabilities of $178.0 million in Governmental Activities.
 Total net position decreased $94.2 million in Governmental Activities.
 General revenues accounted for $647.6 million in revenue or 77.9% of all revenues for Governmental
Activities. Program specific revenues in the form of charges for services, sales, grants or contributions
accounted for $183.6 million or 22.1% of total revenues of $831.2 million.
 Total program expenses were $921.6 million in Governmental Activities.
 Among major funds, the General Fund had $690.6 million in revenues and other financing sources and
$724.7 million in expenditures and other financing uses. The General Fund’s fund balance decreased by
$34.1 million.

Despite his budget-inflating 312 employee workforce increase, and more than $1 billion in pension debt, all of Gordon’s academic plans resulted in the Cleveland Municipal School District receiving another “F” on its state report card.   

Yost made the interesting observation in his CAFR that Gordon didn’t have any enterprise activities going on around new school buildings that could generate earning opportunities for the district and even the students.  

Jackson’s “almost got a D” Gordon reacted by devoting a considerable portion of his 2018 State of the Schools address to discussing “Twitter.”

Superintendents in Ohio get to lead billion dollar school districts because they received a certificate. 

 

Eric Jonathan Brewer
Author, Investigative Journalist, Speaker, Politician, Consultant

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