In a decision that could have a sweeping impact across California, a new state appeals court ruling may ease approval of local tax increases if they are placed on the ballot by citizen’s initiative instead of by a government agency.
Although its 2014-15 budget was balanced, California’s state government ended the fiscal year $175.1 billion in the red, thanks largely to state retirement obligations that had to be included in its balance sheet for the first time. . . debts for “postemployment benefits” will jump again in the report for the 2017-18 fiscal year, when state retiree health care must be included under GASB’s rules.
In 23 metropolitan areas that have built new rail systems since 1970, transit’s share of commuting — including all forms, such as buses and ferries — has actually slipped a bit, from an average of 5.0 percent before the rail systems opened to 4.6 percent in 2013. The ranks of those driving alone continue to grow, having increased 14.4 million daily one-way trips since 2000, nearly double transit’s overall daily total of 7.6 million, according to Census Bureau data.
California State Controller Betty T. Yee today issued the state’s Comprehensive Annual Financial Report (CAFR) for the fiscal year that ended June 30, 2015, showing that a resurgent economy led to a $29.6 billion increase in revenues in the 2014-15 fiscal year. While spending and transfers also went up, the increases were not enough to offset the additional revenue, resulting in a $13.1 billion improvement in governmental activities’ net position. . . This CAFR incorporates major changes to reflect the state’s net pension liability. Based on guidance from the Governmental Accounting Standards Board (GASB), the new figure more accurately reflects a government’s unfunded pension obligation, helping policymakers decide on future funding strategies. Using these standards, the CAFR reports a net pension liability of $63.7 billion as of June 30, 2015.
The nationwide scope of the problem was reflected Monday in a letter the U.S. Justice Department sent to chief judges and court administrators in every state. It said too many people are being subjected to heavy fines for minor crimes, and penalized or even jailed when they can’t pay.
Recent market volatility has negatively affected the asset performance of several large US pension plans, and could be an early signal that fiscal 2016 returns will fall short of assumed targets for the second consecutive year and erase funding improvements seen in FY 2013 and 2014, Moody’s Investors Service says.
The California state auditor has criticized the Department of Transportation’s approach to highway maintenance, saying Caltrans has “weak cost controls” that “create opportunities for fraud, waste and abuse.”
When looking at reinvestments in the child care system as a whole, the state has put back more than $578 million, according to the Department of Finance, which is part of the Brown Administration. Taking a more narrow look at what can be defined as child care, Brown’s finance team said the state has still pumped more than $450 million back.
The Stanford Institute for Economic Policy Research (SIFER) estimated that California’s pension and retiree health care unfunded liabilities exceeded $1.2 trillion in 2013–significantly higher than all previous reports, according to preliminary figures obtained from SIFEF by Insolvent Film.
Thanks to new accounting standards, California’s state and local governments are being forced to acknowledge tens of billions of dollars in previously obscure debt for unfunded pension liabilities.
The CFRS is the only major California public pension plan with a funded ratio over 100 percent and, consequently, enjoys a $289 million surplus rather than contributing to the state’s approximately $300 billion in combined unfunded liabilities. . . The reason for the unique success of the CFRS is simple: they promised only what they could afford to pay for. While most public pension plans offer exorbitant benefits without accounting for their cost, the CFRS consistently maintained benefits at an affordable level.
How do taxes in your state compare nationally? This convenient resource compares the 50 states on many different measures of taxing and spending, including individual and corporate income tax rates, business tax climates, excise taxes, tax burdens and state spending.
Despite a concerted effort from Gov. Jerry Brown to keep California from slipping back into the financial abyss, the state’s finances remain threatened by massive unfunded obligations.
Between the two sources, spending in the coming fiscal year would total $167.6 billion, or about $4,200 for each Californian. That’s two-thirds higher than he was 40 years ago, after adjusting for inflation.
So this week the union asked its 32,000 members — down from 45,000 in 2008 — to raise their dues by nearly a third, to about $1000 per member annually, and also to allow UTLA to pass on to members any future increases in dues owed to state and national parent unions.