Skip to comments.Calif. Taxpayers on Hook for Six-Figure Government Pensions
Posted on 11/07/2019 9:35:53 AM PST by MarvinStinson
Nearly 80,000 Californians collected six-figure taxpayer-funded pensions in 2018, as retirement costs leave half the state's cities at "high risk" of serious financial distress, according to an analysis.
Transparent California, a free-market think tank, found that 6 percent of retired government workers collected more than $100,000 in 2018, an 85 percent jump since 2013. Those payouts represented 20 percent of the $51.7 billion in total pension payments. Taxpayers spent a record-high $40 billion to cover the costs of public sector retirees in 2018, the report also found.
The median household income in California is $75,277. The six-figure payouts propel thousands of retirees into the top 38 percent of all earners in the state, according to census data. About 1.2 million people received pension checks in 2018, including a retired deputy police chief who collected nearly $1.5 million in 2018.
The increasing costs could push residents to a "breaking point," according to Robert Fellner, executive director of Transparent California. Local and state government agencies will have to raise taxes to cover costs or cut public services to pay people who are no longer working.
"You keep raising your sales tax [to fund pensions], you are obviously pushing residents to a breaking point," Fellner told the Washington Free Beacon. "The public services speaks for itself. You see the homelessness and stuff going on, and it's a really bad situation."
California has long struggled to contain its spiraling pension costs. In 2011, the Little Hoover Commission, the state's bipartisan government watchdog, urged California to drastically reduce its pension commitments. Then-governor Jerry Brown, a Democrat, pushed to adopt pension reform, but labor leaders killed the effort with the help of former attorney general Kamala Harris, now a 2020 presidential hopeful.
"California's pension plans are dangerously underfunded, the result of overly generous benefit promises, wishful thinking and an unwillingness to plan prudently," the commission report said. "Unless aggressive reforms are implemented now, the problem will get far worse, forcing counties and cities to severely reduce services and layoff employees to meet pension obligations."
California's public pension cost continues to eat up the budgets of local governments. A state auditor report found that 47 percent of Californian cities are at "high risk" of financial distress due to pension costs. The wide-sweeping audit found that "increasing pension costs may supplant a citys other spending priorities and potentially cause it to curtail critical services."
Some cities, however, dispute the auditor's findings. The city manager of Marysville, the most financially risky city in the state, told the Appeal-Democrat the auditor's remarks were "damaging and outdated."
Fellner said that the bloated California public pension scheme is a "textbook argument for limited government" and urged reform.
"The majority [of cities] will keep raising taxes and cutting services," Fellner said. "But some of the cities can't afford it. California has already seen some cities go bankrupt."
Then-governor Jerry Brown, a Democrat, pushed to adopt pension reform, but labor leaders killed the effort with the help of former attorney general Kamala Harris, now a 2020 presidential hopeful.
This is why the Democrats win and if you are not a government employee you will pay through the nose for political jobs.
Not a problem. Just raise taxes.
Six-figure government pensions should be regarded as a form of embezzlement imo.
OUTSTANDING link. Thanks. BUMP!
It’s not just the pension money which is an order of magnitude more than comparable Social Security payments for private industry (and with 5 years of service full retirement is earned at age 52, not 65); the government retiree health benefits are far, far more generous than nearly all private retiree benefit plans.
I understand the ruling to restrict the taxing of private pensions to the state of residence, but I would have no problem requiring people to pay state income taxes on state-funded pensions, regardless of the state of residence.
The issue is the really big pensions - those over $200,000 yearly - as I suspect those make up a disproportionate amount of the 20% of all pension costs of the group over the $100k dividing line. It might be the other way though. There are a lot of public employees whose salaries are in the $80k - $90k a year range after 10 or so years of employment. When they retire in their late 60's, as I did, years of service put us at the high end of salaries and pensions.
So more information here really would be useful.
And sometimes really large public pensions really are necessary. There is one state prison in California which was put right in the middle of the state's worst Valley Fever area (totally stupid) and it cannot keep (or even obtain) prison doctors unless it pays them a huge amount by normal employee standards, though not by physician standards. Plus a guarantee of a huge pension if they can survive long enough. The inmates there don't. At least the guards and normal prison staff can rotate to other areas.
They’ve got the same scam in illannoy. Unfortunately it’s baked in the constitution. Teachers unions the worst.
“I’m one of them. Note that the article does not differentiate between the really big pensions and those just over $100,000 yearly, such as mine.”
Not saying you shouldn’t get your six-figure pension if that’s what you signed up for decades ago. But i think it’s safe to say that most people consider a six-figure pension (even most people who make six-figure salaries) to be “really big”.
Our state of California is beyond corrupt and has been for years and its only getting worse - now the question is will all of the money that continues to come into this state keep it afloat or will it eventually go bankrupt?
We are in a small city in So Cal. The pensions for the FD, PD, and librarians (!) are doing us in. I saw a great Prager U video on this; they said they have to switch to 401Ks like everybody else. I love the police, I love our fire department, but it is not right to give them full pensions on the backs of “We the People’ who do not have those.
We have Jerry Brown to thank for making the State jobs union.
people need to live in the crap they create and benefit from.....
well then I hope you have donated big time to the freeper thon since you’ll hauling in so much money.....
This is a key aspect of maintenance of the one-party leftist state in places like CA, NJ, IL - unify the government bureaucracy behind the Party, and then tie everyone, in some way, to the bureaucracy through entitlements.
When its too entrenched, as we see in these states, the ONLY thing that is going to change it is some form of major financial crisis or bankruptcy - just like in the Soviet Union.
I’m sorry to say that Its too far gone to simply “change peoples’ hearts and minds” or “vote them out.”
That's the game here in New York. Collect your state pension, then immediately move to Florida - better weather, no taxes, and plus all your friends from work are already there.
Cap the amount any government worker can receive for a pension to $50k/yr.
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