Why CA is so screwed up, in a nutshell

March 31, 2013

By Chris Reed

So CalPERS’ actuary, in a fit of unusual honesty, says the pension giant’s finances are in bad shape in the long run and need to be firmed up. But Alan Milligan realizes that asking his labor-dominated board of directors to have public employees pay more toward pension costs is a nonstarter. So what does he do? Daniel Borenstein has the details:

“He told the board that CalPERS needs more taxpayer money than previously thought from state and local governments and voiced concern about ‘slow progress toward full funding.’ CalPERS, at last accounting, had about 74 percent of the funds it should.

“To understand his proposed rate increase, consider pension costs for the California Highway Patrol. The state is already expected to pay 33 cents for every dollar of payroll in fiscal year 2014-15, and 39 cents by 2018-19.

“Under Milligan’s proposal, the rate would reach 44 cents. That’s an overall 33 percent increase over the five-year period … “

So CalPERS’ actuary wants to firm up CalPERS’ long-term stability by socking taxpayers, and what is the expected reaction from unions?

“Labor representatives will protest the higher rates, even though Milligan’s proposal does not require employees to pay more — and even though it will make their pensions more secure. The problem for them is that employers would have less money for salaries.”

Feel free to scream or cry or laugh or do all three. CalPERS’ board is hostile to having to properly fund pensions because then there would be “less money for salaries.”

If you wanted one factoid to explain why California is so screwed up, that one is tough to beat.

12 comments

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  1. CalWatchdog
    CalWatchdog Author 31 March, 2013, 09:31

    Amen Chris.

    Katy

    Reply this comment
  2. Prattle On, Boyo
    Prattle On, Boyo 31 March, 2013, 09:44

    The Golden State is dysfunctional because (1) It is just too big for the State Assembly to ever agree on anything. It should be broken up into North and South since economic interests are so very divergent and schizophrenic; (2) The public unions own the Democratic Party; (3) Big business (including oil) owns the Republican Party. Get rid of the political duopoly and vote for a Third Party instead and watch how fast California becomes UN screwed.

    Reply this comment
  3. Scott Zickefoose
    Scott Zickefoose 31 March, 2013, 11:17

    Since there are those who live in either the LA basin or SF bay that think the state revolves around them I’ll add a bit of info. The interior of the state doesn’t think, work, play ,or live like the coastal areas. We watch our taxes go to the big cities with no benefit to us unless its a little handout along the way to the big city getting what they want (farm water from the Ca. aqueduct). We have to breathe their air and undergo more stringent smog checks then the coastal areas. Then we have to listen to the “political correctness” coming from those areas.

    If we are going to split up this state draw the line along the eastern edge of the coastal mountains, go to the sea at about Clear Lake in the north, and about Orange County in the south. That way the big urban areas of LA and SF Bay can go on their merry way towards oblivion without goofing up those of us that don’t see things the same way.

    Reply this comment
  4. Dyspeptic
    Dyspeptic 31 March, 2013, 13:20

    This is why I am looking forward to getting out of this state, so I won’t have to continue paying through the nose for this hopeless mess.

    @ Prattle On, Boyo – If Big Business really does own the California Republican Party I hope they didn’t pay very much for the privilege because they definitely aren’t getting their money’s worth.

    Reply this comment
  5. prentiss davis
    prentiss davis 31 March, 2013, 13:25

    I had a wonderful 42 years in California and I’m glad to be gone. Good luck Californians.

    Reply this comment
  6. C.J.
    C.J. 31 March, 2013, 13:53

    After twenty years, our Bay Area family sold our second home in Lake Tahoe last year. In that time, the various local government agnecies and the punitive environmental oversight that they happily administer have driven the North Shore to the brink of economic ruin.

    Back in 2002, state gas prices averaged $1.50/gallon.
    Last year, the avergae rose as high as $4.62/gal.

    Our public “servants” no longer serve the public.
    Well, actually, we are being “served.”
    We have become the main course in their government-union smorgasbord.

    Reply this comment
  7. Donkey
    Donkey 31 March, 2013, 15:03

    CJ, you know the truth. 🙂

    Reply this comment
  8. Queeg
    Queeg 1 April, 2013, 08:18

    Leave already. Sick of the whining. Spare us…call Ulysses Uhaul for your exit interview…..I need the work!

    Reply this comment
  9. stolson
    stolson 1 April, 2013, 09:42

    Coachella Valley(Inland) is home to scads of illegals and they all love the many benefits. If you don’t want to pay high taxes, high cost of living, unnecessary gun control(drug cartels have the best guns around), limited freedoms, crime, race to the bottom education system, crumbling roads and reduced services, then making a move might be in order.
    Stats show parts of AZ, TX, ID, UT to be the place to go.

    Reply this comment
  10. Tough Love
    Tough Love 2 April, 2013, 09:16

    The structure as you quoted exists as it does because the Unions still have no real fear that the promised pensions will be paid in full … and hence they give the lowest priority to adequate Plan funding (vs money for pay increases, for more workers, and the pressure for pension reform greater taxpayer contributions would bring). Example … it took a REAL pension reduction in Central Falls RI to enable material Statewide pension reform in RI.

    Hopefully the endgame of the Stockton and San Bernardino bankruptcy’s will be a Court decision that pensions CAN be reduced. THAT may generate sufficient Union/worker fear that compromise may look like the better option.

    And ……. More appropriately CalPERS actuary Alan Milligan should have said “the Plan needs greater contribution”, but leaving to CalPERS Board whether they should come from Employees and/or Taxpayers. Of course, he wants to keep his job……..

    Reply this comment
  11. eatingdogfood
    eatingdogfood 2 April, 2013, 10:52

    If The Democrats Didn’t Give ” Sweetheart Deals ” To Your Public Service Union.
    Goon Employees To Get Reelected; You Would Have Plenty Of Money and The.
    Taxpayer would have Some Spare Change in His Pockets! Democratic Hustler
    Politicians + Corrupt Union Goons = BANKRUPTCY BABY! Time To Bring.
    RICO Conspiracy Charges Against The Hustler Corrupt Democrats and the.
    Criminal Unions!

    Reply this comment
  12. stockton hater
    stockton hater 27 March, 2018, 16:48

    California is going to implode, to many illegials, and to much crime, like the horable city of stockton, if you go there with a moving truck be prepared to have it stolen, they stole mine and to this day I hate Stockton and hope it burns to the ground.

    Reply this comment

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