With increased tax revenue and economic growth, why are local governments asking voters to approve more taxes?
A report by the League of California Cities notes that city pension costs will increase more than 50 percent by the fiscal year 2024-25, and will reach “unsustainable levels.” The report states: “Often, revenue growth from the improved economy has been absorbed by pension costs.”
Rising pension costs will require cities to nearly double the percentage of general fund dollars they pay to the California Public Employees’ Retirement System. Cities are expected to spend approximately 15.8 percent of their general fund budgets on pensions, with a quarter of cities anticipated to spend more than 18 percent by 2024-25.
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