I am both amazed and angry. No, I’m not speaking of the presidential race. Arnold has recently acknowledged that our revenue stream is a bit short to cover expenses. No, no longer $3 billion dollars. How about a new number closer to $10 billion. Mind you we just signed the state budget after being late by 85 days and somehow exaggerated our income.
So while many of us do take the time to keep up with “stuff” like this the highly informed California electorate has just voted approval of Prop 1A by a vote of 5,072,778 YES votes and 4,661,366 fiscal responsible people who said NO.
Don’t they get it? Where do they think we will get the funds to pay off this latest Bonded indebtedness? Another test will be to see if any lender is willing to trust us to make the payments unless we are receptive to a premium interest rate due to our “superb” state bond rating.
The $9.95 billion price tag of Prop 1A is just the down payment for a 800 mile high speed rail system that might eventually cost us around $81 billion.
The following text, that mentions our PERS program is from the NJ Housing Bubble web site:
“The $240 billion California Public Employees’ Retirement System, the largest U.S. pension plan, agreed at a Feb. 19 board meeting to hold between 0.5 percent and 3 percent of its assets in commodities, spokesman Clark McKinley said. CalPERS, facing pressure from state and local governments to boost returns, would reduce its bond holdings to 19 percent from 26 percent.
$731 Billion Short
U.S. states owe an estimated $2.73 trillion in pension and benefit payments to retirees over the next 30 years, according to a December report from the Pew Center on the States. They are short almost 27 percent, or $731 billion, of that amount. The Government Accountability Office said last week that 58 percent of 65 large state and local pension plans were adequately funded in 2006, down from 90 percent in 2000.”
With a fixed payout for every PERS participant, and a shaky Wall Street, these mandatory pension obligations put us at great risk. Check out Bridgeport, CT or Vallejo, Ca as to their financial woes. If we are not careful our entire state will go “belly up.”
So while we face massive retirement and health care obligations we continue to spend our grandkids into the poor house that will eventually result in cutbacks on basic services such as police and fire protection and K-14 education. But, there is a positive side. We can take the highly subsidized bullet train from LA to Sacramento to visit our elected officials in 2030 if the project is ever completed.
Question of Juice readers. IF, and I do say IF, the proposed “bullet” train was in service today, how often would your travels take you from southern CA to northern CA or vice versa? Once to five times a year? More frequent than that?
Where do you see our biggest transportation needs? Local short distance commutes or 800 hundred mile excursions?
Marijuana. Decriminalize it. Sell it. Tax it.
The End.
most likely the same people that gave us EIGHT YEARS of BUSH
I was chastized here several months ago for writing what I’m about to re-write.
The citizens of California revolted in 1977 and capped property taxes via Prop 13 (capping income).
The citizens of California got tough on crime and went on a prision spree in the early 1980’s (manditory spending)
The citizens of California disliked the underfunded schools caused by Prop 13 (used to be your local property taxes paid the schools, Prop 13 fixed that) and forced the state to do manditory minimum spending (manditory spending).
The citizens of California decided the elected officals weren’t doing a good enough job so they voted in term limits (nobody has a secure seat to stick thier neck out because they are always running for thier next job).
The citizens of California dumped Gray Davis because, in large part, “we deserve the tax break from the VLF”.
Now we’re here. It begs the question:
What did you expect? Prisions, MediCAL, and schools are over 75% of the budget. They continue to demand a higher level of services from government, yet refuse to pay the check.
The citizens of California are to blame for this problem.
To answer the question : I need the bullet train about three times a month. Not to go to NorCal, but to go to Fresno. You can fly into the bay area for a reasonable money, but a round trip ticket to FYI (Fresno Air Terminal or Fresno Yosimite International or whatever) will cost you $800 or so. If I had a train I could work for a couple of hours each way rather than slug it out behind the wheel.
The post and responses so far to me equate to the old Pogo statement of “we have met the enemy, and it is us”. It is interesting to note though that in many local elections throughout the State voters approved tax increases, sometimes in the form of school bonds (Tustin Unified for instance) and in other cases for targeted purposes (Los Angeles sales tax increase). Can it be that the public is saying it wants things fixed and improved and are willing to pay for it? As for the underfunding of public sector retirement plans, that is only part of the picture. Explore the even greater underfunding of private sector retirement plans (For instance, General Motors, IBM), including those private sector employers that have shifted their obligations to the federal government as the “insurer of last restort” (United Airlines, for instance). Seems increasingly everyone is looking to government to bail them out, take care of their basic needs. We have all participated in a debt leveraging of our economy that is unsustainable. Today, there seems to be a growing clamor for a second federal “stimulus” plan to boost the economy – more debt to try deal with the debt house of cards collapse – mistake on top of mistake. Yes, the enemy is us.
Casual, thanks for the Pogo quote. Almost always appropriate.
Larry Gilbert, I wonder if readers will pick up on that slight of hand you used in your post? I’m referring to the “731 billion short” line that you noticeably left unexplained. They are “short” because they no longer have 30 years work of pension payments on hand to pay out in the unlikely event that everyone in the system would somehow magically age to retirement levels at the same time and demand their payments. Obviously this can not happen and no pension plan is funded at a 100% level anywhere. Do they have funds on hand to fund retirements this year and next? Yes they do. Will they have money to find retirements in every year? The projection is that they will. Is there an actual shortfall in the pension? No, not at all.
What you do have is the figures from the GAS-B worksheet that shows the accrual amounts needed over 30 years and how much of that they have on hand. Even GAS-B (FAS-B for private agencies) doesn’t require that the 30 year obligation be funded 100%. So your claim is made with imaginary figures, projections of future indebtedness, compared with real figures of pension plan funding.
Stop trying to scare people Larry. PERS is in great shape with a widely diversified portfolio of investments that can roll with the economic punches and come out strong and self-sufficient. That’s a lot more than I can say for your much preferred private sector that’s always in need of government handouts.