CalPERS rate hike slams cities
Californians are finding out how Gov. Jerry Brown is going to deal with the state’s pension crisis: make the taxpayers pay for it. This from CalPensions:
A divided CalPERS board yesterday approved a faster rate hike for the state urged by Gov. Brown, but opposed by unions. A proposal to give struggling cities the option of more time to phase in the rate hike, seven years instead of five, was rejected.
The rate hike to cover the cost of retirees living longer is the third in the last two years, following a lower earnings forecast and a more conservative actuarial method. Many local government rates could increase roughly 50 percent by 2020.
An underfunded CalPERS has about 70 percent of the projected assets needed to pay promised pensions. There were big pension increases and deep employer rate cuts in good times, then huge investment losses during the bad times last decade.
Well, either the money comes from somewhere — meaning the taxpayers. Of the pensions will have to be cut, which is anathema to the unions.
In 2012, San Bernardino, Stockton and Mammoth Lakes declared bankruptcy. The latter is a small city that lost a lawsuit. But the other two big cities’ financial problems stemmed to a great extent (but not entirely) from the difficulty in making pension payments.
The economy is doing better now, so further municipal bankruptcies may not happen for a couple of years. But when a new recession inevitably hits, these new pension payments will dig deep and likely spark more bankruptcies.
The mistake of spiking pensions 15 years ago continues to rip across the state.
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Another erudite observation by John Seiler, the RAGWUS machine is at its heart pure evil, filled with greed. 🙂
What the hell is RAGWUS?
Tried to Google it but even it is no help.
Suggest you refrain from posting comments using inscrutable terms whose meaning is known only within your squirming little donkey brain.
Oh Ricky— The SQWIDWID dominates!
Every good boy deserves fudge—- Poodles too!
Ted- Please don’t SQWIDWID me!
I’ve already lost a couple nights sleep over RAGWUS.
And dare I trust Donkey’s explanation of RAGWUS? Sounds fishy to me.
Robert Rizzo …really? That fat little toad runs RAGWUS?..AAARRRGHH!
Ricky65, the RAGWUS is a pejorative term for the people that run the bureaucracies of our corrupt government.
R = Robert Rizzo
A = and
G = Government
W = Worker
U = Union
S = Scam
The RAGWUS is pure evil in every dispensation!! 🙂
Donkey is highly confident, but history has shown him to be reliably incorrect.
LOL– Well said Skipper– poor Duncey has been awarded the “Most Incorrect Poster” ™ 5 years in a row!
The term is TOTALLY screwtable. It…………..just hasn’t caught on yet.
Give it another few years.
That’s right SM Douglas—-And SCREWTABLE is the first word in the acronym SQWIDWID—– as you know!
I think the CalPensions report quoted here is premature. It is not on Pension Tsunami, and according to other articles on Pension Tsunami, the CalPERS Board did give the cities the option of two years more than what will be required of the State.
You’re correct, SeeSaw, but that wouldn’t be much of a “hair on fire” story for the doomers here.
Pension system is ok…..when in doubt raise taxes or squeeze dollars out of other programs.
There’s many a slip ‘twixt the cup and the lip when it comes to pensions……
Oh bill you’re dreamy