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Despite an economic recovery, local government leaders in California say rising pension costs have made it more difficult to restore some programs they cut during the recession. . . Local government officials are bracing for even higher costs following a decision in December by the state’s retirement system to forecast lower investment returns, forcing governments and some employees to increase their pension contributions. Officials are still estimating how much the change will cost when it takes effect in July 2018 for local governments, but expect them to exceed the increases of recent years.

Applications for cash welfare reached their lowest point in at least six years in 2016, which economists say might indicate California’s poorest are finally feeling the effects of an improving economy.

State payments to CalPERS next fiscal year are expected to total $6 billion, nearly double the $3.2 billion paid six years ago before a wave of employer rate increases. . . Meanwhile, what had been the fastest-growing annual retirement cost in the budget, retiree health care for state workers, only increased by about half during the last six years, going from $1.5 billion in fiscal 2011 to $2.2 billion next year.

For taxpayers, the number change likely means more dollars from state and local government budgets will be directed to cover pension liabilities and less will be available to meet services supplied by government. The city of Los Angeles already dedicates 20 percent of its budget for pension obligations, Anaheim 13 percent, Long Beach 11 percent and San Jose as high as 27 percent. These numbers will only increase after the CalPERS board’s decision.

How expensive are the 13 state labor contracts that are going to ratification votes this month? . . . The new analysis suggests the total cost may be closer to $2.1 billion that year, mostly because of increased overtime.

The Brown administration is ending a program that coordinated care for seniors and low-income families because it was no longer cost effective. . . Federal regulations requiring in-home caregivers to receive overtime after 40 hours per week drove the cost of the program up with the minimum wage hike. . . Cutting the program will shift the labor costs onto the counties, which is estimated to cost more than $4.4 billion over the next six years . . . “This would be devastating to counties all over the state,” CSAC President and Alameda County Supervisor Keith Carson said in a statement. “We undoubtedly would have to make cuts in other vital social services to cover these costs.”

The city of San Diego’s projected budget shortfall for the next fiscal year has ballooned by nearly $10 million because of new data from the municipal employees’ pension system, financial management staff reported Tuesday.

A second appeals court panel has unanimously ruled that the public pension offered at hire can be cut without an offsetting new benefit, broadening support for what pension reformers call a “game changer” if the state Supreme Court agrees.

“Nonfarm payrolls rose by a seasonally adjusted 156,000 in December from the prior month, a slowdown from November’s more robust gain, the Labor Department said Friday. For all of 2016, the economy added just under 2.2 million jobs, the smallest gain for a calendar year since 2011. The unemployment rate ticked up to 4.7% last month, but remains historically low. Wages showed new signs of firming, rising at the best annual rate since 2009, a sign that more than seven years into a slow-growing expansion labor-market conditions are finally tightening enough to reap payoffs for workers.”

California local governments already have faced 50-percent hikes in their CalPERS payments over the past several years, which has led local officials and pension reformers to increasingly fear a continuing cycle of service cut-backs and tax increases. Indeed, there was some pressure at CalPERS to push the expected return rates down to the 6 percent range, but some officials expressed concern about what this would mean, cost wise, for member agencies.

Instead, legislators tinkered at the margins, passing some of Brown’s proposals but rejecting those with the biggest cost-savings potential. Although Brown touted it as the “biggest rollback to public pension benefits in the history of California,” it is now clear that the package of modest changes he signed into law in 2012 has done little to slow the growth of retirement costs. New projections show the state’s annual bill for retirement obligations is expected to reach $11 billion by the time Brown leaves office in January 2019 — nearly double what it was eight years earlier.

With earnings on investments the last two years barely exceeding zero, CalPERS has been compelled to sell assets to make its pension payments, which far outstrip contributions from state and local governments and their employees.

The 2013 measure repealed a 10-year-old law that allowed employees with at least five years of service to purchase up to five years of credits before retiring, so that a worker who retired after 20 years would receive a pension based on as much as 25 years of contributions. . . The 2013 measure repealed a 10-year-old law that allowed employees with at least five years of service to purchase up to five years of credits before retiring, so that a worker who retired after 20 years would receive a pension based on as much as 25 years of contributions.

New annual CalPERS reports no longer prominently display the pension debt of local governments as a percentage of pay, making it more difficult for the public to easily see the full employer pension cost.

Minimum wages will increase in 20 states at the start of the year, a shift that will lift pay for millions of individuals and shed light on a long-running debate about whether mandated pay increases at the bottom do more harm or good for workers.