Jerry Brown says he may raise taxes without voter approval. (credit, loans)
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I wonder if you felt the same way about our previous governor when he was put in the exact same position?
Arnie was one of the better governors we've had. He brought Dems on board for Prop 57 and 58 (so much for Dems not being willing to compromise on pensions). He wasn't perfect and his tenure started off better than it ended.
The State is 100% liable for the unfunded pension obligations, always have been. I agree, you have to do something but much of the reason the pension costs are so out of control is because the state compensates with benefits and retirement (which they do not fund) rather than a competitive hourly rate. Aside from the steady paycheck and generous benefits there's nothing that would attract anyone to work for the government. The pay flat out sucks compared to the private sector, at least in my field. The combination of low pay and hiring freezes means they are turning more and more to contract work which pays ~40-70% more in lieu of benefits. They could provide the benefits and get higher-caliber employees (most private sector workers only take the government jobs when things get slow for them, meaning they get the least qualified and/or new to the area not yet established workers) for less than they pay per diem.
Maybe you could save some money by cutting benefits to firemen, police officers, and other people that can't easily transfer over to the private sector. For professional jobs that do transfer easily, however, the pay is already so low the only thing attracting people to government jobs is the job security and benefits. Go ahead. Cut those and hire more contract workers. It won't bother me. I'd make more working contract for the state in lieu of benefits than I would as a salaried employee anyway. There's no way it's good for the state to be paying more money to perpetually train a revolving door of temporary workers. And it's not that great for the temporary workers either. Not knowing where and if you'll be working the next day or week is stressful. That's a large reason why the private freelance sector pays so much and why the state and the few private companies that hire employees can pay less while still finding people to do the job.
Arnie was one of the better governors we've had. He brought Dems on board for Prop 57 and 58 (so much for Dems not being willing to compromise on pensions). He wasn't perfect and his tenure started off better than it ended.
The State is 100% liable for the unfunded pension obligations, always have been. I agree, you have to do something but much of the reason the pension costs are so out of control is because the state compensates with benefits and retirement (which they do not fund) rather than a competitive hourly rate. Aside from the steady paycheck and generous benefits there's nothing that would attract anyone to work for the government. The pay flat out sucks compared to the private sector, at least in my field. The combination of low pay and hiring freezes means they are turning more and more to contract work which pays ~40-70% more in lieu of benefits. They could provide the benefits and get higher-caliber employees (most private sector workers only take the government jobs when things get slow for them, meaning they get the least qualified and/or new to the area not yet established workers) for less than they pay per diem.
Maybe you could save some money by cutting benefits to firemen, police officers, and other people that can't easily transfer over to the private sector. For professional jobs that do transfer easily, however, the pay is already so low the only thing attracting people to government jobs is the job security and benefits. Go ahead. Cut those and hire more contract workers. It won't bother me. I'd make more working contract for the state in lieu of benefits than I would as a salaried employee anyway. There's no way it's good for the state to be paying more money to perpetually train a revolving door of temporary workers. And it's not that great for the temporary workers either. Not knowing where and if you'll be working the next day or week is stressful. That's a large reason why the private freelance sector pays so much and why the state and the few private companies that hire employees can pay less while still finding people to do the job.
In 1991, Governor Pete Wilson wished to use PERS funds to help cover a state budget deficit; however, Proposition 162, also known as the "California Pension Protection Act of 1992," gave the PERS board "the sole and exclusive fiduciary responsibility over the assets of" PERS.
To avoid confusion with public employees' retirement systems in other states, the organization's name was changed to "CalPERS" in 1992. By 1996, the CalPERS portfolio was worth $100 billion, and the number of members exceeded 1 million. In 2001-2002, CalPERS provided technical assistance for the Sarbanes-Oxley Act because it had sustained financial losses from the Enron and WorldCom bankruptcies.
Yes, I'm aware of CalPERS. That has nothing to do with the state not being 100% liable for unfunded or underfunded pension obligations. CalPERS manages the ASSETS. It's a straight up government agency and not a quasi-private/governmental corporations like Fannie/Freddie where there was an implied understanding that the federal government would step in. Why do you think the GOP doesn't like it?
Proposal To Reduce CalPERS Pension Fund Rejected « CBS Sacramento
Required. Not oh, I hope they give it to us because that it would be nice. If CalPERS doesn't have enough pie, then it's the tax payer who is on the hook. There could be a bunch of reasons for that. Maybe CalPERS blew a bunch of money on CDOs, maybe people are living longer and medical benefits are costing more, maybe the state is strong-arming CalPERS into stating unreasonably high returns because they want to continue underfunding pension obligations while bashing them for taking the risks necessary to meet those unreasonably high returns. Fact is, it's all of the above.
Yes, I'm aware of CalPERS. That has nothing to do with the state not being 100% liable for unfunded or underfunded pension obligations. CalPERS manages the ASSETS. It's a straight up government agency and not a quasi-private/governmental corporations like Fannie/Freddie where there was an implied understanding that the federal government would step in. Why do you think the GOP doesn't like it?
Proposal To Reduce CalPERS Pension Fund Rejected « CBS Sacramento
Required. Not oh, I hope they give it to us because that it would be nice. If CalPERS doesn't have enough pie, then it's the tax payer who is on the hook. There could be a bunch of reasons for that. Maybe CalPERS blew a bunch of money on CDOs, maybe people are living longer and medical benefits are costing more, maybe the state is strong-arming CalPERS into stating unreasonably high returns because they want to continue underfunding pension obligations while bashing them for taking the risks necessary to meet those unreasonably high returns. Fact is, it's all of the above.
Bottom line is the state will soon not have the money to payout pension benefits let alone fully fund it. The state is quickly heading for train wreck where public pension issues will be the last thing they have to worry about. The people cannot fix this problem with increased taxes.
Well, since folks want to focus on the pension aspect of the budget, vs whether Brown is keeping his promise about not raising taxes without public support, here is the statement from CalPERS:
Pension promises are funded for the long-term. CalPERS has earned a 7.9 percent return over the last 20 years above our assumed rate of return and we have gained more than $70 billion back since the financial crisis.
We recognize that pension costs are a source of fiscal concern for the State, local governments, and taxpayers. We look forward to engaging with the decision makers who must rely on all the facts when confronting these important issues and recommendations."
Really, it's a question of how much Californians want the services we have. If we want to provide the same level of services we are now, then we will need to raise taxes. If we went up to NY rates we'd have no problem at all with our current level of spending. California has one of the most, if not the most, generous social service programs in the nation. I'd be perfectly fine cutting health & human services in half. Put half of that into education, throw a few bones at parks, libraries, museums, and keep 40%+ and start paying down the debt or establishing a rainy day fund.
Really, it's a question of how much Californians want the services we have. If we want to provide the same level of services we are now, then we will need to raise taxes. If we went up to NY rates we'd have no problem at all with our current level of spending. California has one of the most, if not the most, generous social service programs in the nation. I'd be perfectly fine cutting health & human services in half. Put half of that into education, throw a few bones at parks, libraries, museums, and keep 40%+ and start paying down the debt or establishing a rainy day fund.
I don't think you understand. California is bankrupt, it can't pay its bills, especially the high cost of pension benefits for retired public employees. California already has rock-bottom credit rating, California pays a premium for its loans. You will see California defaulting on debt this year and increasing taxes will not make a difference. California government has been assuming the federal government would bail them out but that will not happen. But don’t feel too bad … California is not the only state in this situation … it’s just at the top of the list as the state with the worst situation and will be the first to default.
Here is some examples of whats starting to happen.
Brown does not need to worry about getting voters' approval. He'll turn loose the media propoganda machine combined with the screams of millions of trough-eaters and the voters will give him anything he wants. Do we forget that these are the same fools who elected him?
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