Posted on 07/03/2007 9:08:41 PM PDT by NormsRevenge
Gov. Arnold Schwarzenegger's administration on Tuesday lost a long-running court battle over its plan to sell bonds to cover the state's public employee pension costs.
The ruling by the 3rd District Court of Appeal could complicate negotiations over the state's already overdue budget. Republican lawmakers are holding up the $104 billion spending plan in part because they believe it will leave California with an unmanageably large budget deficit next year.
Tuesday's ruling may only add to that concern, depriving the state of more than $500 million to help close the estimated $5 billion-plus deficit in the 2008-09 budget year.
Schwarzenegger and Democratic leaders have proposed balancing the current, 2007-08 fiscal year budget with billions of dollars from a prior-year tax windfall. That money will run out by the time officials begin drafting the budget that begins on July 1, 2008.
Consumer rights and anti-tax groups praised Tuesday's ruling. They said it set an important precedent limiting the state's ability to borrow money to pay ongoing expenses without voter approval.
"If they had gotten permission to do this, we could have seen massive deficit spending," said Harold Johnson, an attorney for the Pacific Legal Foundation, which fought the bonds. "It's a big victory and a sobering message for the spendthrifts in the Legislature. They can't use the credit card to cover ongoing costs of government."
Former Gov. Gray Davis' administration designed the pension bond plan.
In 2004, Schwarzenegger endorsed the plan. He proposed paying a portion of the state's annual contribution to the Public Employee Retirement System with money raised from a $560 million bond sale.
Schwarzenegger's administration argued the state did not need voters' approval to do so.
But a three-judge panel on Tuesday upheld a lower court ruling that said voters - or two-thirds of the Legislature - had to approve the use of bond money to pay the state's pension obligation.
H.D. Palmer, spokesman for Schwarzenegger's Finance Department, said the administration would not appeal the decision to the state Supreme Court.
The administration did recently prevail in another court case involving welfare payments that would have cost the state about $500 million. However, California's nonpartisan legislative analyst calculates the state faces $2 billion in potential costs from other ongoing court battles.
the roads won’t be fixed....
the parks won’t be maintained, maybe even closed...
zoos can’t be improved, fees go up, hours go down...
we can’t hire more police and fire and teachers etc because with each hire, its a finanicial boondoggle...
this is what the public unions have done for America....
the roads won’t be fixed....
the parks won’t be maintained, maybe even closed...
zoos can’t be improved, fees go up, hours go down...
we can’t hire more police and fire and teachers etc because with each hire, its a finanicial boondoggle...
this is what the public unions have done for America....
in the scheme of things, what differance is whether its 60% or 100%.....its all obscence in its gluttony...
I think it was Arnold who negotiated a lower cost program starting with the new contracts a couple of years ago.
This will reduce costs, but only over the long term.
I don't think the peace officers have a similar two-tier set up.
iows.....you are getting penalized by SS for saving money for retirement....
about Cal.....I know there are many retired Cal cops living the good life up here in Eastern Washington and northern Idaho....what with their huge pensions and medical care for life, they have hit the jackpot many times over....
Liz, this particular pension issue goes back several years to the dot-com boom. As things moved merrily along, pension investments were earning enough money to self-fund (meaning no annual contribution from revenues was required to meet pension obligations). That freed up those funds to be spent elsewhere. Unfortunately, Gray Davis and his cronies committed those funds to things that required funding on an ongoing basis, year after year. As such, when the dot-com world crumbled and the State needed to resume funding the Pension fund, they came up short of funds. (As an aggravating factor, the pension fund not only stopped earning revenue but suffered some severe losses, thereby making the indicated contribution amount even greater).
As an initial “fix”, Gray Davis proposed borrowing money to make the necessary annual contribution. This was strongly opposed by conservatives and he was taken to court. When Arnie came on board, instead of siding with conservatives and dropping the Gray Davis “fix,” he adopted it. Now, after several years of this bouncing through the courts, he lost! (Good!)
While it received little press coverage, there was another change that CalPers made to ease the pain. They changed the rules for amortizing losses, increasing the number of years over which to make up the contribution deficits. This had the effect of reducing the magnitude of the annual contribution requirement in the near term, pushing yet more liability/risk into future years.
I don’t think any of this is illegal, but it’s a real risky way to run a business, let alone State Govermnent.
I’ve never worked for the goverment, but I read a lot about this a few years ago. My recollection was that a lot of things were inlcuded in the base pay that private businesses would never allow. If they have changed that, I am glad to see it.
A belated “Welcome to FR,” by the way.
Regional governance would not be an outrage so great were it not without representation. Thus, when explaining the travesty Grovelnator Schwarzenkaiser has visited before the uninitiate lurking in public fora, one needs to make the distinction: "regional governance without representation." It's not just remote; it's unaccountable to the people.
The definition in this contract was based upon monthly salary. OT is not included in that.
You are absolutely correct! Thank you for clarifying my intent.
You’ve obviously ventured into varied territory. It took me a couple years before I even knew about lightening bolts and kitty attacks.
...will not be submitting the pension bond matter to the voters.
A guaranteed NO and the Austrian can't stand to be told no.
I hear ya!
That's not a problem for me. I'm maxed on social security around September every year. If the RATS drive up the marginal tax rates, I'll have to ask my company to defer a significant fraction of my compensation.
I decided to make the move to Idaho before retirement. The difference in cost of living allowed me to payoff my mortgage at age 45. I've purchased a 2nd house to generate some passive rental income when I retire. The AMT is already disallowing the mortgage interest and property tax deductions for the 2nd house. I have to keep it rented to turn those expenses into a profit/loss on a capital investment instead of a personal residence.
Yes! It’s fantastic!! I read it the last time you pinged me to it and now I’ve BOOKMARKED it for good measure!!! They wish to “Penetrate and permeate!” (I think I mis-spelled that last word)
That's the modern form of tyranny, friend. You say it would be ok if the governing boards were representative, but you're NEVER going to see that. The whole point of regional governance - the only reason it's being created - is to shield the decision-makers from having to answer to voters. Once again: regional government entities are created to move government beyond the electoral system - so our masters won't be accountable. Under this system, the only people who are accountable are the rest of us - we have to answer to unelected bureaucrats (with fines or even jail time) if we disobey their commands.
As if I didn't know. I was fighting the Agenda21 in 1994. Where were you?
You say it would be ok if the governing boards were representative, but you're NEVER going to see that.
No, I didn't say it would be OK. I said that they would not be as much of an outrage as they are if they were representative. Learn to read my friend.
The whole point of regional governance - the only reason it's being created - is to shield the decision-makers from having to answer to voters. Once again: regional government entities are created to move government beyond the electoral system - so our masters won't be accountable. Under this system, the only people who are accountable are the rest of us - we have to answer to unelected bureaucrats (with fines or even jail time) if we disobey their commands.
Fancy that. I wrote a whole book on the topic and what to do about it.
The regional government worshippers will rationalize the lack of directly elected representation by suggesting the election of representatives by other elected representatives is still representative government. In practice, the liberal leftists constantly rig these elections by elected locals in very artful ways!!!
In the first place, political novices who are elected to local government for the very first time aren't even aware they have any need to get their colleagues to vote for them for up to 30 or 40 regional positions and more often than not didn't even know these powerful positions existed and can wreak havoc on their accomplishing any of their campaign agendas and promises!!!
Fortunately, when elected to local government, I instinctively knew that when these positions were agendized immediately after taking our oaths of office, that it was important to be very assertive in expressing my interest in all these, setting aside any false modesty and surprising any coleagues into simply voting in relief that they won't have to be bothered with these seeming nuisance positions!!!
Prime among these are seats on LAFCO and these stupid CONservancies like Schwartzenrenegger created and even several planning agencies like Sierra Economic Development District and the Sierra Planning Organization which even control transportation centers like airports and of course the actual Transportation Commissions who influence other super-regional transit/transportation agencies like ABAG and SACOG, (Association of Bay Area Governments & Sacramento Council of Governments). I've left many out!!!
These parasitic regional concockshuns just wipe out much of the traditional "punch" of local governments and the people cannot understand why their elected reps are seemingly unable to accomplish what they were "sent" to do on their City Council, or Board of Supervisors, or even Board of Directors of the local fire, water, parks or community services districts!!!
So I still think they ARE "an outrage so great" in my experience opinion!!! Besides, this concept of "regional governmental bodies" got it's big kick-off under FDR's administration and THAT should tell ALL of you something!!!
Yes, this truth, coming from one who works in that horseshoe crapitol is profound, indeed!!!
freedomdefender, which of the 50 United States do you hail from, or reside in?
The idea of course is to provide further cover to our political elites. Their fondest wish is to be held accountable for nothing while controlling everything.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.