Last week’s announcement by the California Public Employees’ Retirement System that it had strong

Sacramento Democratic insider Steve Maviglio and the Californians for Retirement Security – a union-backed group that opposes any effort to change public employee pensions – shared a Twitter post about how the news “should quiet pension bashers.”

But credit ratings agencies, actuaries and investment experts aren’t likely to see the news as reason to change their grim view of CalPERS’ medium- and long-term prospects. Even with the strong year, CalPERS still only has 68 percent of funds in hand to cover its pension obligations – a roughly $100 billion shortfall – and that’s based on a forecast of 7 percent annual returns that CalPERS’ own consultant said should be reduced to 6.2 percent.

Meanwhile, local governments around the state are in no mood for happy talk about the nation’s largest public pension agency. Their required CalPERS’ pension payments are soaring and appear likely to keep increasing for years to come – even if CalPERS achieves its 7 percent return goal. Aging public agency work forces are swelling the ranks of retirees and “smoothing” practices that phased in CalPERS rate increases over the last 15 years no longer offer much of a cushion to governments’ bottom lines.

Modesto official: CalPERS status quo will collapse

In May, Joe Lopez, Modesto’s acting city manager, said the city eventually wouldn’t be able to afford its CalPERS bill, which will nearly double over the next eight years.

“Ultimately there is going to have to be a substantial change made to the way the pension system is run,” Lopez told a City Council budget committee hearing, according to the Modesto Bee. “We can’t continue to rely, CalPERS can’t continue to rely, on revenue [from cities and its other public sector members to meet its pension obligations]. There is going to have to be substantial changes to the actual benefit packages if these are ever going to be sustainable.”

There are similar worries in many small cities around the state.

Last month, Chico Councilman Randall Stone – a financial planner – predicted CalPERS would eventually collapse as the benefits it paid out exceeded the money it was taking in.

The grim assessment was triggered by a report showing the city’s CalPERS bill will go up about $370,000 in 2018-19, $803,000 in 2019-20 and nearly $2 million in 2020-21 alone.

“I think generally speaking, the community doesn’t understand what a time bomb this is,” Stone told the Chico Enterprise-Record. “You should be screaming with your hair on fire from the rooftops.”

In May, the Bay Area News Group reported that three small East Bay towns – Pittsburg, Walnut Creek and Martinez – had to cut several agencies’ budgets for 2017-18 to pay their CalPERS bills. And these cuts are even before the large pending CalPERS hikes.

In March, the Ventura County Star reported on how local cities were reeling because of the CalPERS hikes. Tiny Port Hueneme’s pension bill went from $774,000 in 2014-15 to $1.3 million in 2017-18 and will reach $3.2 million in 2022-23 – more than quadrupling over an eight-year span.

SEIU leader: Pension shortfall like drought

But union officials have not expressed sympathy with struggling local governments. In a June 26 op-ed for the Sacramento Bee, Yvonne Walker, president of the Service Employees International Union Local 1000, mocked “doomsday predictions about California’s public worker pension funds.” She likened the recent poor CalPERS returns to the state’s drought, which came to an abrupt end this winter.

This analogy – and Walker’s long-term optimism – prompted a tart response from David Crane, a financial expert and former aide to Gov. Arnold Schwarzenegger.

“No financial expert can present any real evidence showing that CalPERS can grow its way back from its current 63 percent funded ratio to anywhere close to 100 percent,” Crane wrote on the Medium website.

The 63 percent funded figure went up to 68 percent after CalPERS’ good returns were noted, but Crane stands by his dismissal of any optimism about CalPERS recovering from its current woes.

However, with Democrats in California, you see even worse canards. The worst is the idea that stricter regulations and government-imposed costs — AB 32, minimum-wage hikes and more — are somehow good for the economy.

Just as laughable is the claim that without good-to-great pay and ridiculously generous benefits, there will be an exodus of wonderful workers from government jobs. We’re hearing lots of this in the aftermath of the federal bankruptcy judge’s ruling that the city of Stockton can invalidate and renegotiate pensions for current and retired employees. Example:

Dave Low, the chairman of Californians for Retirement Security, a coalition of state public employees, said the decision could hurt not only workers but also residents of cities across the state.

“We are disappointed,” he said, “that the judge has sided with Wall Street in a decision that has the potential of devastating citizens, employees and making bad situations worse.”

If cities are forced to break promises made to employees, Low said, “it will result in a mass exodus of police, firefighters and other public employees who will have no incentive to rebuild bankrupt cities.”

That’s from the L.A. Times.

No market demand for public employees at all — except cops

What a load of hooey. As I wrote for City Journal a while ago ….

With the exception of law enforcement and some niche categories, no evidence exists of substantial market demand in any area of public employment. Public-sector compensation is so much higher than private-sector pay because of pay practices — including automatic raises negotiated by bureaucrats who often stand to benefit from the policies — and because of the political clout of public-employee unions.

What’s happened this year in L.A. with firefighter vacancies illustrates this. See my account here; there were 10,000 applicants for a 300-job fire recruit class.

And here’s what I wrote a decade ago for the Orange County Register. I can’t find it online, but Nexis comes to the rescue:

After the 1994 bankruptcy, it was plain that the biggest enemy of Orange County taxpayers was reckless Treasurer Robert Citron, who gambled vast sums on risky investments with the aid of his Ouija board and ended up $1.6 billion in the red.

A decade later, our worst enemy is something much more abstract: a theory advocated by county personnel managers. Leaving out the jargon, it boils down to the notion that wages and benefits must go up on a regular basis so as to keep the county’s uniformly competent workers happy and stop them from fleeing to better jobs elsewhere.

The latest example of bureaucrats’ devotion to this theory came last month when a plan surfaced that would push the top salary range for about 100 county bosses to nearly $250,000 a year and the range for another 850 executives to nearly $200,000.

The problem with this theory is basic: It’s a crock.

“It’s the bureaucratic equivalent of an urban myth. With the exception of police officers, there’s no data that indicates [competition for public-sector employees] at all,” says Steve Frates, a senior fellow with the Rose Institute of State and Local Government in Claremont.

No turnover shows job satisfaction is high

What does the data indicate? You guessed it.

How often an organization loses employees is far and away the best indicator of relative satisfaction with pay and benefits. County officials I spoke with last week said overall figures on employee turnover were not available, but they didn’t dispute that it was low compared with the private sector.

This job satisfaction isn’t surprising. As economist Paul Craig Roberts has documented, public employees have higher average annual pay, better benefits and more paid days off than private-sector workers. This gap has widened over the past 20 years, during which the private sector has undergone a productivity revolution while government manifestly has not.

I’m still waiting on that government productivity revolution.

By Chris Reed

Steve Maviglio, a leading consigliere to top Sacramento Democrats for more than a decade, now regularly pretends to  a new role. Even though he’s on Speaker John Perez’s payroll, Maviglio offers himself up on Twitter in the quasi-journalistic role of reasoned, reasonable commentator on pensions. On Monday, he stuck up for the reforms Gov. Jerry Brown got through the Legislature in September and depicted the Contra Costa Times’ Dan Borenstein as being on a “jihad” against public employees because Borenstein — like lots of people — thought the reforms were insufficient given the size of the pension mess.

So let’s bother to take Maviglio seriously. A reasoned, reasonable commentator on pensions would offer an honest take on pension problems, not try to downplay their size and significance with name-calling, non sequiturs,  semantic gamesmanship and twisted use of statistics.

That’s not Steve.

In 2011, as spokesman for the Californians for Retirement Security, Maviglio depicted the pension crisis as manufactured. His press releases tore into “myths and falsehoods about public employee pensions” spreadly widely by evil “out-of-state billionaires.” What was their goal, according to Maviglio? To use “a few sensational cases of pension abuse” as a means to “attack middle-class Californians.”

Falling short on consistency, insight, math and honesty

So in 2011, Maviglio depicted the pension reforms won by Jerry Brown in 2012 as unnecessary, and now in 2013, he’s depicting them as broad, sweeping and positive. Consistency ain’t one of your strengths, Steve.

Nor is breadth of insight a Maviglian strength. For years, whenever people talked about the extreme severity of the pension crisis at the local level, in places like San Jose and San Diego, Maviglio would always shift the topic to the state level, where the pension underfunding isn’t as extreme.

Nor are math or honesty Steve’s strong suits. For years, one of Maviglio’s favorite narratives has been to assert the average CalPERS pension is tiny, about $25,000 a year, by citing median pensions of former public employees — knowing full well that category included loads of people who only worked for the government for a few years. Maviglio understands that the pension debate’s core inflammatory issue is the fact that tens of thousands of public employees in California have retired in their 50s with 75 percent to 90 percent or more of their last, highest salaries. But instead he invokes grossly misleading statistics that include pension recipients who worked for local or state government for a few years before taking other jobs.

And these are just the most obvious ways to poke holes in the idea that Maviglio is a credible pension commentator.

The ‘middle-class’ retirees with $100k-plus pensions

There are also more sophisticated ways to do so. For example, Maviglio constantly depicts pension reformers as being at war with “middle class” government workers and retirees. Then why have Maviglio and the California Democratic establishment fought so bitterly against a pension reform approved in similarly liberal Illinois a few years ago that capped pensions at $108,000 going forward adjusted for inflation? Because so many public employees would be affected. They are hardly middle-class.

And then there is the basic, somewhat mean way to poke holes in the idea that Maviglio is a credible pension commentator. He stands to get a gigantic pension after years working in $100,000-plus jobs for Gray Davis, Fabian Nunez, John Perez and others.

In short, Steve Maviglio has as much credibility on pension reform as Kinde Durkee has on campaign finance reform.

But at least his Twitter posturing on the topic will be good for some laughs.