Posted on 05/16/2012 4:09:55 PM PDT by SmithL
Against Gov. Jerry Brown's wishes, the California Public Employees' Retirement System board voted today to phase in a higher cost to the state over two years rather than bill the state immediately in full.
In a letter to the board, Brown called that "not a prudent decision."
The disagreement was over the pace at which PERS is lowering its assumptions about future investment returns from 7.75 percent to 7.5 percent, called the discount rate. Such changes are intended to compensate for lower market returns. When the rate of return assumption goes down, governments must contribute more.
The PERS board agreed to phase in the change over two years at a onetime $137 million savings ($78 million general fund), but Brown had wanted the board to drop the discount rate immediately. In a letter he sent to the board today, Brown reasoned that despite the onetime savings, the delay would actually cost the state general fund $145.9 million over 20 years in higher interest costs.
(Excerpt) Read more at blogs.sacbee.com ...
Well, Jerry’s last job was as a mayor, where you actually have to balance a budget, and you can’t use all the smoke and mirrors pretend budgets they use in Sacto.
How long will it be before Baraq allows CA, IL, and NY to issue federally guaranteed state debt?
It’s all academic at this point. The numbers they’re are off by a factor of two at least. Rational people would have slashed that percentage to 3 and told Brown to put up or shut up.
A 7.5 percent return is pure fantasy.
That idea would die in the House of Representatives faster than any idea in American history.
Has the House been approving the trillions in debt that Baraq, Bernanke, and Geithner are creating?
Why would Baraq need the Congress to allow the states to do the same thing?
Because such a bill to guarantee the debts of a State would have to originate in Congress. The Preaident can’t order the Treasury to do anything not already budgeted and appropriated by Congress.
And not even Boehner is stupid enough to try to ram such a Bill through the House.
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