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Thanks for the details regarding the budget, I didn't realize the pension budget shortfall was separate from the state budget. In that case stupid question: if

by gavman 10y ago

Thanks for the details regarding the budget, I didn't realize the pension budget shortfall was separate from the state budget. In that case stupid question: if CalPERS owes much more than it can afford to pay, where is the rest coming from? The LA Times article, in multiple places, talks about how much the shortage will cost the "taxpayers" (see quote below for example), how is this not related to the CA budget which is, well, funded by taxpayers? > "This year, state employee pensions will cost taxpayers $5.4 billion, according to the Department of Finance. That’s more than the state will spend on environmental protection, fighting wildfires and the emergency response to the drought combined." That makes it seem like it's related to the budget...

gnopgnip 10y ago
They will either have to increase contributions or cut payments to future retirees.
- numbsafari 10y ago
  As if those are the only two options... what happens when the unions plans their strikes for the week before a major event, like transit workers before the DNC here in Philly? Also, when tax-free pension contributions go up and taxable payments to future retirees go down... then taxes collected also goes down...
  - seanmcdirmid 10y ago
    They strike they strike. It's happened before, it will happen again. As for a change in tax revenue, the same is true if you contribute more to your 401k and/or get back less because your investments didn't do good. Also, if you lay state employees off, your state income tax revenues go down.
nikdaheratik 10y ago
It is related to the budget, but not directly related since it is promises to fund pensions rather than something directly related to government services. It could be funded by increasing contributions gradually until it reaches the correct funding level (either from cuts in other areas or taxes), by cutting the future amounts they distribute from the pensions, by raising the retirement rate of current workers which would give them time to make up the deficit, or a combination of these. The problem is, these options all kind of stink politically, but they won't bankrupt the state by themselves.

by gavman 10y ago

gnopgnip 10y ago

They will either have to increase contributions or cut payments to future retirees.

numbsafari 10y ago
As if those are the only two options... what happens when the unions plans their strikes for the week before a major event, like transit workers before the DNC here in Philly? Also, when tax-free pension contributions go up and taxable payments to future retirees go down... then taxes collected also goes down...
- seanmcdirmid 10y ago
  They strike they strike. It's happened before, it will happen again. As for a change in tax revenue, the same is true if you contribute more to your 401k and/or get back less because your investments didn't do good. Also, if you lay state employees off, your state income tax revenues go down.

nikdaheratik 10y ago

It is related to the budget, but not directly related since it is promises to fund pensions rather than something directly related to government services. It could be funded by increasing contributions gradually until it reaches the correct funding level (either from cuts in other areas or taxes), by cutting the future amounts they distribute from the pensions, by raising the retirement rate of current workers which would give them time to make up the deficit, or a combination of these. The problem is, these options all kind of stink politically, but they won't bankrupt the state by themselves.