Calif: Davis proposes selling bonds for pension plans (akin to borrowing money to buy groceries)

San Francisco Chronicle ^ | Jan 23, 2003

[John Jorsett]

Here's another sign of just how desperate the state's financial position has become: Gov. Gray Davis is proposing to help close the state's budget gap by selling $1.5 billion worth of pension obligation bonds and using the proceeds to make its annual contribution to the giant retirement plans for state employees and teachers.

[John Jorsett]

Ping. This guy isn't going to consider his job done until California is completely insolvent, I guess.

[Tacis]

Better idea - legislation to authorize a default on this year's contribution to the fund that pays CA union workers outrageous pensions for not having done much work when they were being paid outrageous salaries for not doing much work.

$1.5 billion in bonds? Do you have any idea how much graft/kickbacks there is associated with that? Think of a mortgage refinancing and ALL the silly miscellaneous charges - on a state bond issue of that size, there are a lot of friends and relatives of Blackout Davis who will get fat. Hell, even Condit's kids would get a piece of that!

[drypowder]

Is anyone at all curious as to whether there is any connection this proposal may have with Gray Davis's proposed appointment of Willy Brown to over see the CalPers retirement program. Can monies going into the CalPers system from bond sales somehow be diverted??
I trust Davis is trying to do the right thing for the state's employees. NOT!

[John Jorsett]

Can monies going into the CalPers system from bond sales somehow be diverted??

If there's no effective oversight, yes. The state is so thoroughly dominated by Democrats now that I have no confidence that any of the watchdog agencies are functioning as they should. In particular, now that Kathleen Connell has been replaced as controller by that stooge Steve Westly, there's no one minding the store.

[Destructor]

Are you Californians still glad that you re-elected Gray Davis?

[John Jorsett]

Are you Californians still glad that you re-elected Gray Davis?

Nobody hanging around on FR is likely to have ever been glad that Davis is governor. I think the brainwashed masses in the state will soon discover what sending all those Democrats to Sacramento is going to cost them: tripling of the vehicle license fees, higher income taxes, a one-cent jump in the sales tax, and a horde of new 'fees' to eat out their substance (as the Declaration of Independence put it).

[richardtavor]

I heard that Gray Out wants to tax the last few smokers left in the state $1 million per pack....

[Dog Gone]

The bonds would not be general obligation bonds

In other words, Davis isn't promising to repay them.

Lovely.

[45Auto]

but a state official says it could benefit the plans because the state would pay them back with interest.

No, the TAXPAYERS will have to pay them back plus interest. These guys are all economic illiterates. This is not going to fly, even with a Marxist-dominated legislature. Even if those miscreants change the current law regarding deficit funding of CalPERS, this is sure to end up in the courts in a lengthy litigation, which itself is going to cost a lot of money. The only upside is that the CalPERS and CalSTRS recipients are the very morons who contributed to the RATS having complete control of the state government, now its going to come around and bite them in the a**!

[45Auto]

What I would really like to see is CalPERS recipients getting a voucher instead of a check at the end of the month! Sort of like the big bag of IOU's in the non-existent Social Security Trust Fund. Trust, indeed!

[Ernest_at_the_Beach]

Thanks for the ping!

Davis is pulling out all the stops!

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[CA Conservative]

Well, unfortuntely I will be affected as well. I work for the school district, and I am forced to contribute to CalPERS, to the tune of $500/month. And not, I didn't vote for Davis or any other Democrat in November.

[Grampa Dave]

Well, kindly old grampa Dave, the warm and cuddly gramps in the Wine Country has been warning about Davis and his bonds for about a year now. First this week, Herr Davis tried to extort his Indian buddies who own casinos. They have found out how expensive it is to give Davis money. Now he is trying to extort more money from them. Now Davis is telling every loyal teacher who voted at least twice for him to drop their pants down to their ankles to prepare for BOHICA as they are about find out what an Indian giver Herr Davis is. BOHICA is coming to every teacher in Kali and no vaseline is available due to the budget problems.

Now for some quotes from this article: Gov. Gray Davis is proposing to help close the state's budget gap by selling $1.5 billion worth of pension obligation bonds and using the proceeds to make its annual contribution to the giant retirement plans for state employees and teachers.

Generally, states aren't supposed to sell long-term bonds to finance continuing costs, such as annual pension-plan contributions. It's kind of like taking out a home equity loan to buy groceries.

Pension obligation bonds are not permitted under California law. But the state Legislature could pass a new law to allow them, says Molly Arnold, a deputy state attorney general.

As an alternative to selling bonds, Davis also has proposed borrowing the money the state needs to pay the pension plans from the pension plans themselves. ============================================================

Isn't the unnamed agency in charge of these pension plans, the famous Cal Pers?

[Grampa Dave]

John first the Indian casino owners found out that Davis is an Indian giver, and now this Here's another sign of just how desperate the state's financial position has become: Gov. Gray Davis is proposing to help close the state's budget gap by selling $1.5 billion worth of pension obligation bonds and using the proceeds to make its annual contribution to the giant retirement plans for state employees and teachers.

Aren't there any left wing voting groups besides the prison guards who are sacred to Herr Davis. After he gets their money and their votes, he abuses them.

[John Jorsett]

After he gets their money and their votes, he abuses them.

I don't think this amounts to abusing state employees, because the state is obligated to fund their pensions no matter what else happens. It's more like taxpayer abuse, since we're the ones who would be on the hook to pay off these bonds long after he leaves office. Just like his saddling us with these horrendous electricity costs for many years to come.

[Dog Gone]

Davis could solve this budget crisis in 15 minutes. All he has to do is get the legislature to take 34 billion dollars out of the pension fund and write an IOU.

Ta Da!

I should run as a Rat politician in California.

[Grampa Dave]

I think that is a great idea. Take it out of the teachers retirement plan and the state employees retirement plan.

We can pay it back sometime with no interest!

[Dog Gone]

Better yet, he should take out about $50 billion and write an IOU. Then he can go on a spending spree.

Yes, yes, I do have a future in politics, I see it now.

[FITZ]

It's more like taxpayer abuse, since we're the ones who would be on the hook to pay off these bonds long

Sort of like an abusive marriage it sounds. You'll keep being abused as long as you stay. I'd move out.