by Chris Reed | May 24, 2014 6:30 am
So Gov. Jerry Brown is finally forced by events to come up with a CalSTRS pension rescue plan. And as Dan Borenstein points out, it’s so cautious that it doesn’t prevent CalSTRS’ underfunding from getting worse for some time to come:
“For more than a decade, lawmakers have ignored the increasing shortfall. Consequently, the California State Teachers’ Retirement System is now $74 billion underfunded, holding only 67 percent of assets it should have.
“Brown now wants to start paying down the debt this year. But he would stretch the installments until 2046, meaning it would take 32 years to restore full funding and that the debt would continue growing for the first 12 years.
“That’s not fiscally responsible; it’s merely less irresponsible than what lawmakers do now.”
And guess what? In the least surprising development of all time, even the governor’s irresponsible plan is too responsible for the Legislature. This is from Dan Walters:
“State legislators heard a heavy litany of complaints from school officials this week about Gov. Jerry Brown’s plan to make the State Teachers Retirement System solvent and in response temporarily toned down the bite on their budgets.
“The Brown plan aims to close a $70-plus billion unfunded liability by eventually raising contributions to $5-plus billion a year, with the lion’s share coming from the budgets of local school districts.
“But school officials told a joint legislative hearing that the sharp increases would wipe out much of the gains in state aid they are scheduled to receive during the remainder of the decade.
“In response, the chairs of the two legislative committees involved asked for a modification and on Friday, the Legislative Analyst’s Office released a revised chart that would reach the same level of financing sought by Brown by 2020, but lower the increase in the early years and raise it later.”
Yeah, sure, they’ll “raise it later.” To paraphrase an old Baltimore Sun columnist, no one will ever go broke underestimating the people in charge of the California Legislature.
Source URL: https://calwatchdog.com/2014/05/24/your-sacramento-in-action-weak-calstrs-fix-made-even-weaker/
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