Posts Tagged Gov Jerry Brown

Government employee pay increasing faster than incomes of Californians

 Sacramento — At an event tonight hosted by the San Joaquin Taxpayers Association in Stockton — the largest municipality to declare bankruptcy in the United States due to overly generous government employee compensation — the Howard Jarvis Taxpayers Foundation and the Center for Government Analysis will jointly release a new study that reveals alarming compensation trends for State workers from 2005 to 2010.

The study, conducted by the Center for Government Analysis (CGA), found that total expenditures by the State of California to finance salaries and pension benefits for State workers grew three times as fast as the per capita personal income of all Californians.

Among other findings is the fact that estimated expenditures to pension systems have increased more than 4½ times.

“Given the importance of the topic of California’s finances, the State’s expenditures (and the lack of disclosure regarding them) further erodes public confidence in our State government,” said Steven Frates, President of CGA.

The research also revealed that had the state allowed State worker salaries and benefits to increase at the same rate as the general per capita income rate for the rest of Californians, the State could have saved more than $2.1 billion — enough to increase the number of California teachers by 8.2%, adding nearly 25,000 teachers. If the State had kept the State worker workforce from growing, they would have saved even more — nearly $3 billion.

“The findings in this study completely belie the excuses from Sacramento politicians that they need more money in state coffers,” said Jon Coupal, Chairman of the Howard Jarvis Taxpayers Foundation. “A rapidly escalating share of taxpayer dollars that is being spent in Sacramento today is going toward bloated salaries and pensions, not teachers and schools.”

The research was supported by a grant from the Howard Jarvis Taxpayers Foundation. For a copy of the study, click here.

CALIFORNIAN’S: VOTE NO ON PROP. 30 AND YES ON PROP. 32

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Follow Up: THE PUBLIC PENSION TIME BOMB

This is a follow-up to the article “The Public Pension Time Bomb!” that discussed the ballooning pension liabilities of towns, cities and states who also faced with shrinking tax bases, shrinking tax receipts, shrinking state and federal reimbursements and rising costs.

In addition to being reliant on new funds from now less plentiful sources, these pension funds operate under annual percentage return assumptions that need to average a certain rate far into the future so that those returns together with paid-in money will be sufficient to meet that funds obligations.

Well what happens if those annual percentage returns miss by a country mile or even worse the fund suffers losses significant losses and when there are gains they are miniscule? Where will the money come from to pay the retirees?

Consider the example of CalPERS aka the California Public Employees’ Retirement System!
“The nation’s largest public pension fund, the California Public Employees’ Retirement System, posted a 1.1% return on its investment portfolio in 2011, Chief Investment Officer Joseph Dear told his board.

The 2011 performance was well below the estimated average annual return of 7.75% that the fund’s actuaries say is needed to meet current and future obligations to its members.

The $229.5-billion CalPERS provides retirement and other benefits for 1.6 million state and local government employees and their families

CalPERS’ annual investment results, whose volatility has echoed that of the overall markets, have become the focal point in an ongoing debate about looming pension fund liabilities and the ability of future generations of taxpayers to continue financing them. Gov. Jerry Brown has said he wants to overhaul state and local government pension programs, but whether he and the Legislature have the political wherewithal to do so in an election year remains unclear…

… This fiscal year, the state is contributing $3.51 billion. Next fiscal year’s contribution is to be determined in the late spring.”

So what will happen if at some point the state is no longer able to make a sufficient contribution?

They may not have your money when you need it, but at least they have state of the art headquarters.

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