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California Considers Rate Increases
Cathy Board members of California's largest Board members for the California Public That's in "If we CalPERS staff said much of In April, a key CalPERS committee voted to Citing the state's fiscal "The $600 million would have had a pretty The legislative analyst's "It's The pension fund board does not need
Meanwhile, Don Thompson of Bloomberg Businessweek
Bussewitz of the Associated Press reports, California
pension fund considers rate increase:
public pension fund said Tuesday they are likely to take more money
from the state general fund to pay employee pension benefits, a
proposal that has led to criticism at a time when the state faces a $19
billion deficit.
Employees Retirement System said the amount would be less than the $600
million increase they had estimated last month.
part because the Legislative Analyst's Office issued a report saying
total payroll expenses for the state were lower than CalPERS' estimate.
The actual figure is used to determine the state's contribution to
pension benefits.
defer these contributions, it will mean larger increases are needed in
the future," Alan Milligan, interim chief actuary for CalPERS, told the
board. "We feel that may end up being more challenging than what the
state is facing today."
the increased contribution would be paid by fee-based agencies,
including the Department of Motor Vehicles and Department of
Transportation. The full board is expected to consider the issue
Wednesday.
increase the state's contribution by an additional $600 million. The
fund says it needs the extra cash because of investment losses and
retirees' longer lifespans.
condition, the full CalPERS board postponed a final decision after state
Treasurer Bill Lockyer requested more
information about how the increased contributions would affect the
state general fund.
burdensome impact on a budget that's already under an intense amount of
strain," said Joe DeAnda, spokesman for Lockyer, a CalPERS board
member. "The results came in, and the hit to the general fund turned
out to be a lot less hurtful."
report said the total increase in funding from the state would be $481
million, with about $184 million coming from the state general fund.
The rest would be paid in part by the fee-based agencies.
the right thing to do," Andrea McCarthy, a spokeswoman for Gov. Arnold
Schwarzenegger, said in an e-mailed statement. "CalPERS is clearly
recognizing that deferring contributions raises costs and shifts burdens
to future generations, and the governor commends CalPERS's efforts to
end that practice."
legislative approval to boost the state's contribution rate.
reports,
California committee defeats pension-reform bill:
Gov.
Arnold Schwarzenegger's drive to cut California's pension costs
stalled when a Senate committee derailed a bill that would have reduced
benefits for newly hired state employees.
The legislation by
Senate Minority Leader Dennis Hollingsworth failed Monday on a 4-2
party-line vote in the Senate Public Employment and Retirement
Committee.
It would have required new state employees to
contribute more toward their retirement. Most would have had to work 10
years longer, until age 65, to be eligible for retirement benefits.
Public safety employees would have had to work an extra seven years --
to age 57 -- before they could retire.
Hollingsworth said his bill, SB919, would have saved the state
$110 billion over 30 years. He said the issue is not dead, despite being
rejected by the committee. He plans to make it a point of budget
negotiations this summer as the state tries to close a $19 billion
deficit.
"It wouldn't be a sanely crafted budget without
pension reform," Hollingsworth, R-Murrieta, said in a telephone
interview.
California's two major public employee pension
funds estimated their unfunded liabilities at $61 billion in July 2008.
That drives up the cost to taxpayers, who must cover the shortfall.
The California Public Employees Retirement System, the nation's
largest pension fund, is considering imposing $600 million in
additional costs on the state to cover its shortfall.
A study by graduate students at Stanford
University commissioned by the administration and released in April put
the unfunded pension liability at nearly $240 billion for the public
employees' retirement fund and $157 billion for the teachers'
retirement fund.
The committee's chairman, Sen. Lou Correa,
D-Anaheim, said pension changes should be negotiated through collective
bargaining agreements rather than imposed by lawmakers. Those changes
already are being discussed through negotiations with state and local
public employee unions, he said.
Schwarzenegger
has made pension reform a priority of his final year in office and has
said he will not sign a budget agreement without it.
"Every
year we are diverting more and more money away from higher education,
health and human services, public safety, parks and environmental
protection to pay for unsustainable retiree costs, and without action,
those costs will keep skyrocketing," the Republican governor said in a
statement. "This is a classic example of Sacramento promising more than
it can afford."
California is reaching a
critical point. Without the requisite pension reforms, the state will
face ballooning costs to sustain the pensions of retirees. Measures must
be taken now or else a grim situation will turn unmanageable in a few
short years.
»
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To hell with the union retirees not taking reduced payout benefits!!! Why the hell should the general public have to pay more taxes to cover the union shortfall!!!
Union employees need to cover the shortfall with increased retirement deductions or expect less retiement benefits!!
No longer will the public be held at gunpoint by state unions!! To hell with them!!!
Illinois catching up to CA for a dubious distinction
While most eyes are on the highly leveraged European countries, especially Spain over the past week, back here in the US, Illinois today is close to passing California as the most troubled municipal credit in the country as measured solely by their 5 yr CDS. Illinois 5 yr CDS is up 4 bps today to 295 bps, a record high and up 70 bps in just the past two weeks. California is trading at 299 bps, higher by 2 bps on the day and up about 50 bps in the past two weeks. It does though remain well off its record high of 460 bps back in Dec ‘08. Both municipalities are closing in on Bulgaria at 320 bps, Croatia at 300 bps, Hungary at 318 bps, and Lebanon and Portugal both at 310 bps.
Decrease spending by 20%
Negotiate all existing and future contracts to minimum 20% less.
Reform project sourcing and reduce barriers for out of state vendors to participate.
Outsource wherever you can - police, firefighters, teachers -save 20% on every contract as minimum mandate.
If you cannot cut pay -decrease working hours to 30per week - those workers will work 30 hours per week.
decrease sales tax to 6%
increase marijuana sales :-) if nothing else works - atleast you can live in an elevated state of mind.
"increase marijuana sales :-) if nothing else works - atleast you can live in an elevated state of mind."
ROFLMAO!!!!!!!!!!!!!!!!!!!!
how to fix the pension system in california
have the state borrow 2 billion from calpers,, and then invest the whole 2 billion into calpers
that ought to do it ,, need more just borrow more
The snivel servants should have their pensions reduced. Better yet, fire 50% of existing employees, who essentially produce nothing, and leech off the body politic. Off with their heads, I say!!
California has forgotten it is (was) the GOLDEN state.
As in, no Ponzi finance.
Maybe it g oes back to the naming of the state, that it's all built on fantasy rather than reality, probably the only state so named; from http://www.etymonline.com/index.php?term=California:
They are going to get more money from the State of CA...which has no money. When did we stop teaching math in school? Oh yeah, right about the time those clowns unionized.
They teach MATH???? WHERE!
$600m... That's surprisingly close to the loss they took on Stuy Town, right?
So, if they hadn't been screwing around in alternative investments, it's possible they may not have needed to raid the general fund at all, right?
Bingo......a $ 500 million Stuy equity stake that is now worth zero.
CalPers still has major losses in other large commercial projects that have yet to be recognized. The large public pension funds were the primary targets for large CMBS sales.
The most striking thing is the inability to pass the most rudimentary of reforms. G-d forbid, these leeches may actually have to work until they're 65! Instead, everyone else has to work until they're 65 so that they can retire earlier.
A few days ago I suggested a counter trend rally was due. The more influential main trend remains bearish though.
The proprietary indicators I use in my technical analysis can identify trend changes before they occur.
http://stockmarket618.wordpress.com
http://www.zerohedge.com/forum/latest-market-outlook-1
Thanks. But how does that help me find the best price on some gold Eagles?
Or Tom Petty/ZZ Top tickets?
Thunderdome: Leo Kolivakis vs. Grand Supercycle
woot!
HUNGRY HUNGRY HIPPOS!
http://broke207.files.wordpress.com/2009/10/hungry-hippos.jpg
Yeah, but we're about to go Rockem Sockem Robots, if we don't stop this nonsense
http://www.youtube.com/watch?v=xV7cx4cQOuU&feature=related
More like cowboys and unionists.
I live in the People's Republic of Kalifornia and must have missed the news concerning how our dumbass legislature proposes to replace the 50% hit many of us took in our IRA's/401(k)'s etc. Oh wait, can't miss what never was.
The union drones ought to be happy they even have a paycheck at this point.
It's what always happens though. Capitalists are given free reign and grow into robber barons, the peons eventually get fed up enough to begin collective bargaining, the robber barons get knocked down a notch back to capitalists, but the collective bargaining continues, eventually straining the capitalists' ability to produce, and then the collective entitlements cease and/or the system collapses.
Debt can mask the fat rolls pretty well... but eventually she has to take her clothes off.
I still can't fathom how states and municipalities keep coming back to the citizenry for millage increases, sales tax increases, etc. The concept has never occurred to them to spend less. Unfortunately, without proactive intervention, the decision won't be theirs soon. They can either take a haircut or the market will command them to do so. Denial will not save them.
Unfortunately, them will keep coming back to us for money.
Awesome! CA with this circle jerk, NY with its 40 something year old $100k+ a year retirees, IL $45 billion in the hole rolling the dice on derivatives ....
The race to the states where public employee pensions and benefit programs aren't sucking taxpayers dry should be incredible, but it's not.
CA, NY, whatever. It'll be the Federal Gov't that gets the soggy biscuit.
Leo, CA is toast. USA is toast. Forget reform and ride the liquidity tsunami as it smashes you on the rocks of reality.
"...a few short years..."
Leo, you are the Comic Strip section of ZeroHedge.
Now that I have finished reading the Comics, where is that Sports section?
See the articles on Greece Riots.
"California is reaching a critical point".
Yeah, they are broke and soon will be MB.... "more broker".
Coming to a theatre near you.
Why not put off today what you can put off again tomorrow?
"Soit'nly!"
Ahnold and the CA legislatures need to hire this guy.
http://pacoenterprises.blogspot.com/2010/06/obama-to-name-competence-cza...