Posted on 02/25/2017 6:21:44 PM PST by artichokegrower
The impact of ever-higher pension costs on California’s local governments, particularly cities, has been evident for years.
Pension burdens contributed to the recent bankruptcies of three cities and more are feeling the pinch.
(Excerpt) Read more at sacbee.com ...
The police chief of Santa Cruz, California who just recently made a lot of noise about Homeland Security arresting illegal MS-13 members in the community will retire in June with a $175,129 per year pension.
California has no one to blame but themselves....
Just raise taxes some more.
They got here by doing that......
Part of the problem has been low returns on investments. Ironically, the Trump stock boom will prop up some localities only to lead to more promises and higher pensions and holding off on bankruptcies for 20 years.
Go on, pay for more illegal invaders to come in, protect them against the law, feed, educate, medicate, and breed more. There’s where your money goes, instead of rewarding those who worked decades to retire on their well-deserved pensions.
In a gated community no doubt.
Take some money from, I don’t know, dam maintenance, and give it to the Democrat voters.
The sad part is that the people of California tried to nip this in the bud in 1994 with the passing of proposition 187.
California Proposition 187 (also known as the Save Our State (SOS) initiative) was a 1994 ballot initiative to establish a state-run citizenship screening system and prohibit illegal aliens from using non-emergency health care, public education, and other services in the State of California. Voters passed the proposed law at a referendum in November 1994. The law was challenged in a legal suit and found unconstitutional by a federal district court. In 1999, Governor Gray Davis halted state appeals of this ruling.
You have raised a good point. The article talked about the investment losses during the 2008-2012 recession. I would think those losses have been recouped and then some. Investment portfolios should be in good shape.
Piss poor Governor....
Californians have looked down their noses at the rest of the country for decades.
“We’re the richest.” “We’re the smartest.” “We’re the coolest.” “We’re the most talented.” “We have the cutest girls.” “We have the nicest weather.” “We’re the most environmentally conscious.” “We’re the most compassionate.” “We have garlic ice cream.”
“California leads the way for the rest of America.”
OK. Now show us how you lead the way in handling the obligations your elected love-seekers saddled you with. We’re all waiting to see how brilliantly you pull the solution out of thin air.
stop spending money on illegals
$175,129 per year pension.
With that small of a pension, can he get food stamps,etc?
disgusting
Pete Wilson was the last gasp of The Great State of California.
California has themselves between a rock and a hard place as the old saying goes. Residential property is taxed at 1% the cost when the home owner bought it. It can increase 2% each year after. They can’t unwrap that law yet.
They are trapped. They accepted the fraudulent CALPERS estimates for returns and gave out pensions based upon thin air not actual results. Too bad buttercup.
Feeling a pinch? It’s going to get much worse for everyone involved. These retirement plans including CalPers have an expected actuarial return of 7%-7.5% per year. What this means is that they expect their pile of money to grow at 7% per year in order to pay off all current and future expected retirees.
The problem is, this is a wholly unrealistic number. Banks pay less than 1%. T-bills are in the 1%-2% even the 30 year pays less than 1/3 of what they need the return to be at. We have had about 10 years straight of very low interest rate environment. Stock market has been good overall in the past 8 years but is only up about 25% vs 10 years ago, or 2.5% on their longer held money (new money grew better). The point is they are going to be way short if they don’t get many years of 10%+ in a row to make it up. Unreasonable to expect especially given the timetables. There was a time when 7% may have been a more reasonable number (but never to expect 7% avg blended return forever!) but it doesn’t seem likely to recur in the next 5-7 years. No matter how much they cook the unemployment numbers or inflation or GDP growth (which has been revised downwards many times, retroactively, over the past 20 quarters) you can’t escape the realities that manufacturing employment is at multi-decade lows, public sector employment is the highest ever, and government regulation and taxes including ObaminationCare costs are squeezing the life out of discretionary free cash. Things are tight for non-millionaires and non-property owners.
The public employees paying in will have to kick in a larger share every month to make up the difference if they expect to take out their “guaranteed amount” which is some ridiculous number like 90% of their last year’s pay for life. How can anyone expect to work 30 years but get paid for 60 years? And when they are asked to pay more they are going to complain viciously about it. Their unions will threaten and may go on strike over it. Taxpayers will be asked to bail them out, and all the public service employees are going to vote to take money out of the private sector’s pockets to pay for their retirement. If courts rule like they did in Illinois (that the state cannot substantially modify its pension program) it has the potential to get real ugly. If the public can hold the politicians and unions at bay to prevent more taxes (California already is the #1 highest income tax and #2 most taxed overall), we will still suffer as they will try to divert general funds leaving everyone with worse public service, roads, water, mass transit etc.
The issue has to be resolved one way or another. Ponzi schemes always collapse. There may be a private sector revolt. I remember CA proposition 13 which stopped counties from jacking up property taxes. We will need to do something similar again to roll this stuff back. With a 13.9% top rate on income eventually some of the meatier payers will leave. Some will retire and live on less thus pay less into the tax system. I know a few people who still have 20-30 years before even thinking of retirement and they are plotting ways to get passive income out. CA will chase people into other states to collect money they think they are owed. This kind of stuff is a powerful disincentive for new money to come to invest in California.
Not to mention the $25 billion they spend on illegal aliens every year.
trump’s fault!
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