“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.”

It’s not irresponsible enough for Dem majority

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.

“Under the present pension funding system, school districts pay 8.25 percent of payroll toward long-term obligations, teachers give 8 percent of their paychecks and the state contributes an amount equal to about 2 percent of the payroll of CalSTRS-covered employees.The Sacbee story noted that the CalSTRS board wants to change the formula by increasing teachers’ contribution to 8.5 percent and gradually upping the state’s contribution to a max of 3.25 percent and gradually increasing school districts’ contributions to a max of 13 percent.”

To put that in context, CalSTRS proposed teachers increase their contributions by 6.25 percent over what they pay now under the current formula; that school districts increase their contributions by 58 percent; and that the state increase its contribution by 62.5 percent. So taxpayers would be expected to shoulder 10 times the burden of additional costs as teachers.

Teachers’ share of contributions would go from 37% to 27%

Here’s what Gov. Jerry Brown proposed on Tuesday in his revised budget:

“Under the funding plan, teacher contributions will increase from 8 percent to a total of 10.25 percent of pay, phased in over the next three years. School contributions will increase from 8.25 percent to a total of 19.1 percent of payroll, phased in over the next seven years. These school contributions will be paid from existing revenue sources. The state’s total contribution to the Defined Benefit plan will increase from approximately 3 percent in 2013‑14 to 6.3 percent of payroll in 2016‑17 and ongoing. In addition, the state will continue to pay 2.5 percent of payroll annually for a supplemental inflation protection program — for a total of 8.8 percent.”

So the 2014 version of the 2007 reform would see teachers increase their contributions by 28 percent over what they pay now under the current formula — much more than 6.25 percent increase contemplated in 2007. The state’s contribution would go up by about the same as anticipated in 2007 — 62 percent.

But school districts would be annihilated. Their contribution increase proposed in 2007 was 58 percent. Under Gov. Brown’s plan, the increase would be 132 percent. The percentage of salary that the districts have to collect to cover its required pension contribution is huge already. Hard numbers aren’t available yet, but it looks like a 3 percent or 4 percent hit on districts’ operating budgets.

That’s going to be devastating for all school districts — especially the many districts which already spend more than 85 percent of their operating budgets on compensation.

Presently, teachers pay 37 percent and taxpayers pay 63 percent of the amount collected by CalSTRS annually. Under Brown’s proposal, teachers would pay 27 percent and taxpayers 73 percent.

School districts would go from footing 38 percent of the pension funding responsibility to just over 50 percent (19.1 percent of salaries vs. teacher contributions and state contributions of 19.05 percent).

CTA might oppose any fix that reduces take-home pay

So much for Jerry Brown’s 2011 pension manifesto. Instead of public employees and their agencies gradually moving toward a day in which pension costs were equally divided — Brown’s bold alleged goal no. 1 — teachers stand to get an even better deal then they had in 2011.

And what’s absolutely crazy about this is that I know some CTA members who don’t think their leadership will settle for anything that leads to a cut in take-home pay. For teachers who have to pay 2.25 percent more of their salary to CalSTRS in a year in which they don’t get a “step” or “column” increase, their paycut will shrink.

How California: a pension deal that protects teachers to a degree not enjoyed by any other government union may not insulate teachers enough to win their support!

One of the groups accused of the “campaign money laundering,” the Center to Protect Patient Rights, plans to announce today it has resolved its portion of its legal dispute with the FPPC.

The issue was $11 million in Super PAC money contributed to fight the Gov. Jerry Brown's ballot initiative to increase sales and income taxes through Proposition 30, and the ballot initiative which would have weakened the political power of labor unions, Proposition 32.

There was relatively little media interest in the $66 million raised by organized labor to fight passage of Prop. 32, including $20 million from the California Teachers Association.

The $11 million donation made headlines and generated a controversy because of its source — an unknown Phoenix group called Americans for Responsible Leadership.

The Center to Protect Patient Rights, was the other Arizona organization involved in the donation.

FPPC Chairwoman Ann Ravel ordered agency attorneys to demand that Americans for Responsible Leadership disclose the contribution’s original donors,  after California Common Cause filed a complaint. When the groups would not, Ravel and Attorney General Kamala Harris opened a formal inquiry into the group’s donation to the Small Business Action Committee.

Settlement

“The California Fair Political Practices Commission has announced that the legal dispute over the filing of CPPR’s reports last year has been completely and finally settled,” said Sean Noble, President of the CPPR in an email.

“CPPR is pleased the Commission determined that the organization never intended to violate campaign reporting rules nor did it intend to conceal information from the public. CPPR ‘inadvertently’ erred largely because it had never previously made any contributions in the State of California,” said Noble.

“CPPR will remain vigilant in its work to encourage and support likeminded groups and individuals, and educate the public on issues related to limited government, free enterprise, and the protection of patient rights.”

The settlement seem large given the group was absolved of intentional wrongdoing.

Center to Protect Patient Rights

The first part of this civil dispute was settled last November when disclosure letters were filed prior to the 2012 election.

CPPR’s filing with the FPPC in 2012 was the organization’s first and only in the State of California, according to a source close to the case. Yet, the filing attracted more than its fair share of scrutiny from those on the left who disagree with CPPR’s mission of working to keep the United States financially and fiscally sound.

Many charged the controversial $11 million contribution came from the despised Koch brothers, who give to conservative causes. The recipient of the  donation was Sacramento-based Small Business Action Committee PAC and its No on Proposition 30/Yes on Proposition 32 efforts.

The FPPC made clear in the settlement that CPPR made an “inadvertent” error, but acted in “good faith” and never intended to violate campaign reporting rules.

However, another source who asked for anonymity because the details of the settlement have not been formally announced by the FPPC anticipates closure of this matter will not be enough to satisfy some on the left, and said these individuals and organizations will take every opportunity to try to silence those they disagree with.

The total FPPC settlement is $1 million, to be broken out among the accused groups.

The source said the unprecedented size of the financial settlement over an issue that amounts to an inadvertent filing error is a glaring example of the Commission’s power over non-profit organizations that pursue a constitutionally guaranteed right of free speech in elections.

Government overreach – think IRS scandal

According to my source, the FPPC overreach is similar to the IRS’s disturbing overreach with “conservative” non-profit organizations and Tea Party groups. “Americans should be rightly concerned about any misuse of power by government political ‘watchdogs’ against legitimate non-profit organizations,” the source said.