Borrowing to make the extra payment would not reduce the state’s overall debt, obviously. Brown contends that it would save money in the long run, because the interest paid on the loan would be less than the projected growth of pension debt.
It’s quite similar to the “pension obligation bonds” that local governments have floated, hoping to come out ahead via arbitrage, but they have sometimes backfired, and Brown is betting $6 billion that CalPERS can achieve its 7 percent annual earnings goal despite what the governor describes as “poor investment returns.” Even if this fiscal gimmick works as hoped, the state’s retirement debt will continue to grow.
The state’s regular payments to CalPERS fall way short of what would be needed to keep the debt from growing, much less pay it down. Overall, CalPERS has less than two-thirds of the money it needs to cover all pension commitments.
California’s new system for funding public education has pumped tens of billions of extra dollars into struggling schools, but there’s little evidence yet that the investment is helping the most disadvantaged students.
A CALmatters analysis of the biggest districts with the greatest clusters of needy children found limited success with the policy’s goal: to close the achievement gap between these students and their more privileged peers. Instead, results in most of those places show the gap is growing.
The test scores echo a broader and growing concern about the four-year-old Local Control Funding Formula from civil rights groups, researchers and legislators. They also raise concerns about whether the $31 billion invested so far in foster youth, kids learning English and students from low-income families has been well spent.
It’s a playbook environmentalists used effectively when they lobbied for a ban on plastic bags. Year after year, the Legislature rejected a statewide ban on plastic shopping bags. So the green campaign went local, eventually persuading so many California cities to adopt some type of plastic bag ban that by 2014, the Legislature was compelled to act.
Suddenly grocery stores that previously opposed a statewide plastic bag ban made a deal to support it by collecting 10-cent fees for paper shopping bags, arguing that the hodgepodge of local rules made business difficult for store owners and confusing for shoppers.
“It was intentional to create a patchwork of local policies as a means of motivating opponents to come together and find a statewide solution,” said Mark Murray executive director of Californians Against Waste, an environmental advocacy group that backed the plastic bag ban.