From Wiki: The arm’s length principle (ALP) is the condition or the fact that the parties to a transaction are independent and on an equal footing. Such a transaction is known as an “arm’s-length transaction”. It is used specifically in contract law to arrange an equitable agreement that will stand up to legal scrutiny, even though the parties may have shared interests (e.g., employer-employee) or are too closely related to be seen as completely independent (e.g., the parties have familial ties).

There is not an arm’s length distance between the employer (politicians) and public employees. Their interests are intertwined and the public’s interest is left wanting.

its a shame that we do not actually know that people we talk about or to or maybe we wouldn’t say the things that we do. Junior knows a heck of a lot more about working people banding together than you think but then again you don’t know him sooooo?

The governor should by his own authority , order a pension contribution holiday. I think that would balance all the budgets involved. The pensions have money, let them carry the load for awhile.

This was pushed because of the risk our public safety officers face(which I truly believe some in the inner cities face) but the data that these individuals don’t have the number of retirements years as others and that our numerous investments could pay for these benefits is not quite coming out as true. Also, the fact that these benefits applied to all retroactively still working didn’t help.

Let individual public employees support electeds who pay their salary and pensions.

Ban unions from contributing to the elected officials who set employee pensions and pay.

The authors are correct, CALPERS invested heavily in real estate during the up-cycle, often taking on debt to finance the acquisitions and acquiring properties in national markets with unsustainable demand, i.e., Phoenix. The rapid fall of real estate prices left CALPERS holding the bag–and I suspect that they guranteed the loans, which would mean they’re stuck covering the losses. Ouch.

CALPERS’ other problem is escalating retirement benefits. Like OC, many CALPERS-dependent agencies increased defined-benefit retirement payouts during the boom years. In example, the pension benefits for some jurisdictions went from 2 percent per year of servce at age 55 to 2.5 percent or higher. For many public safety employees (police personnel) the benefits increased to 3 percent per year of servive at age 50. Instead of saving the unexpected returns for a rainy day, the State and local jurisdictions–in response to union pressure–approved labor contracts with these increased pay-outs. The problem is that these increased benefits, longer lifespans, and the current contraction of the economy have strained the demands on CALPERS.

Couple poor planning with escalating retirement benefits and you’ve got the perfect storm. CALPERS will survive, if for no other reason than it can exact the needed funds from the State and local governments to cover its losses. That is, of course, assuming the State and local governments aren’t in Chapter IX bankruptcy. Personally, I’m glad OC has its own retirement system.

While some are quick to blame Prop 13 for this turmoil, that blame is completely misplaced. An unexpected benefit of Prop 13 was the stablization of property tax revenues. Despite the near complete collapse of CA real estate values, most county assessment rolls are STILL INCREASING! Yes, still increasing.

Even in these times of falling real estate values most properties are still assessed at far less than their fair market value (“FMV”). Those properties will continue to receive the 2-percent annual upward adjustment allowed under Prop 13 unless and until the FMV’s of those properties exceed the assessed values. Yes, many properties acquired during 2003 and later have experienced significant declines in value. But those declines are more than off-set by the 2-percent adjustments made to the millions of properties which are still assessed at less than their FMV.

Yes, some of our legislators and local governement representatives are cursing Prop 13. But, it’s not because Prop 13 has resulted in lower property revenues–as outlined above, property tax revenues continue to rise in most places. It’s because Prop 13 set the basic property tax rate at 1 percent of value AND established a two-thirds voter approval threshold to make increases to our property taxes (lowered to 55 percent under certain circumstances). These officials are resentful that Prop 13 has made it more difficult for them to RAISE PROPERTY TAXES to offet the revenues they’re losing from State government sources. To me, that’s just sour grapes!