While Brown expects revenue to be up 3 percent next year, the governor and lawmakers assumed revenues would be even higher when they planned the current budget, and they spent accordingly. . . Lower revenue and higher costs mean the state has approved spending money that Brown doesn’t think it will collect.
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.
We estimate that California state and local governments owe $1.3 trillion as of June 30, 2015. Our analysis is based on a review of federal, state and local financial disclosures. The total includes bonds, loans and other debt instruments as well as unfunded pension and other post-employment benefits promised to public sector employees. Our estimate of California government debt represents about 52% of California’s Gross State Product of $2.48 trillion. When added to the state’s share of the national debt, we find that California taxpayers are shouldering debt burdens on a par with residents of peripheral Eurozone states.
Less than four years after declaring California’s budget was balanced for the foreseeable future, Gov. Jerry Brown on Tuesday said the state is now projected to run a $1.6-billion deficit by next summer.
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.
On Thursday, the independent Legislative Analyst’s Office reported that preliminary tax collections in December — a key month for quarterly tax payments — were almost $1.2 billion below predictions. . . Few will be surprised if Brown uses the lackluster revenue data to demand scaled back growth in future spending or cuts in current spending on some programs.
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.
One in four El Monte residents lives in poverty. Yet taxpayers pay a steep price to fund bonus pensions and other perks for city workers.
For the first time in its 85-year history, the California Public Employees Retirement System, CalPERS, is drastically cutting benefits for public retirees. Starting January 1st, four retired City of Loyalton public employees will have their pensions cut 60 percent. For 71-year-old Patsy Jardin, that means her pension will drop from about $49,000 a year to a little more than $19,000.
Little mention is made of the federal government’s major role in the lives of Californians, from the $47.5 billion in federal contracts awarded to state businesses and other recipients in federal fiscal year 2015, or the nearly $96 billion in federal funds in the current state budget, representing more than one-third of the budget total.. . . A report last year by the New York Office of the Comptroller concluded that California received 99 cents in federal spending for every dollar it paid in federal taxes during the 2013 federal fiscal year, one of 11 states that received less federal money than they paid in taxes. California, though, has outsized involvement in some federal programs. For example, the state has embraced the federal Affordable Care Act, known as Obamacare, opting to expand Medi-Cal to cover more than 3.5 million new participants.
School districts, already bracing for record pension contributions for school employees, will face additional costs they hadn’t expected as a result of a decision Wednesday by the California Public Employees’ Retirement System. . . Dennis Meyers, an assistant executive director of the California School Boards Association, estimated that the lower investment forecast would add $400 million to $600 million to school districts’ costs. Combined with already scheduled cost increases to CalPERS and CalSTRS, higher pension costs will consume every dollar of projected revenue increases for 150 to 200 school districts in coming years, he told the CalPERS board committee during a hearing