Tag Archives: CalPers pension shortfall

Gov Moonbeam states his case for New State Nullification and His Alternate Universe | Jan 24 2017

Gov. Brown’s State of the State: ‘California Is Not Turning Back. Not Now, Not Ever’

– KTLA

“California Gov. Jerry Brown on Tuesday decidedly pitted the state against the Trump administration, in a call to prepare for “the battle ahead,” during the annual State of the State address.

Instead of focusing on California, Brown pointed to the East, warning Washington that the most populous state in the union views the future as “uncertain” after the election, and that “dangers abound.”

Brown said while federal law may overrule state law on immigration, California would use its enacted protective measures for undocumented immigrants. A variety of state measures offers the undocumented access to higher education and limit the state’s cooperation with federal immigration authorities.

“We may be called upon to defend those laws and defend them we will,” said Brown. “We will defend everybody — every man, woman and child — who has come here for a better life and has contributed to the well-being of our state.”

Brown’s promise comes as President Donald Trump has pledged to cut federal funding for so-called sanctuary cities, which could be millions for California’s major cities.”

….Continue reading @ KTLA

We note the striking and eerie similarity of Gov Brown’s claim that, “California is not turning back, not now, not ever….” to Gov George Wallace’s boast of “segregation now, segregation tomorrow, segregation forever.”

    Brown has thrown down the guantlet of nullifcation, of state’s rights in support of illegal immigration, just as Wallace did for segregation 60 years ago. It didn’t work then, and it surely will not work now.

    Moreover, he tries to make the case that the state will welcome all who wish to come to the state, yet can only do so with the federal govt paying for almost all the costs. That is an alternate universe. /CJ

 

 

California schools may face cuts amid skyrocketing pension costs

– SF Chronicle

“Public schools around California are bracing for a crisis driven by skyrocketing worker pension costs that are expected to force districts to divert billions of dollars from classrooms into retirement accounts, education officials said.

The depth of the funding gap became clear to district leaders when they returned from the holiday break: What they contribute to the California Public Employees’ Retirement System, known as CalPERS, will likely double within six years, according to state estimates.

CalPERS, a public pension fund with $300 billion in assets that is the country’s largest, manages retirement benefits for 1.8 million current and former city, state and school district employees, though it does not cover teachers, who fall under a different pension system.

School district officials say that unless the situation changes, they will have to make cuts elsewhere, possibly leading to larger class sizes, stagnant worker pay, fewer counselors and librarians, and less art and music in schools. Insolvency and state takeover are not out of the question for some districts.
The depth of the funding gap became clear to district leaders when they returned from the holiday break: What they contribute to the California Public Employees’ Retirement System, known as CalPERS, will likely double within six years, according to state estimates.

“This was a very difficult decision to make, but it is an important step to ensure the long-term sustainability of the fund,” said Rob Feckner, president of the CalPERS board. He said the board was committed to a “phased approach” that would allow agencies to deal with wounded budgets.

Currently, districts pay the equivalent of 13.88 percent of payroll for CalPERS employees into the pension fund — already the highest-ever rate. For Oakland, that’s about $14 million this year. But the payroll rate will jump to 28.2 percent over the next six years.

“There is still a lot of speculation at this point, but this would likely create a significant increase in expenditures for school districts,” said Raul Parungao, associate superintendent for the Fremont Unified School District. “The resulting impact to budgets will require very careful planning in the immediate future.”

Yet the state’s education budget has increased significantly over the last several years, with a projected $2 billion increase next year to $73.5 billion — a big jump from the $47.3 billion allocated to schools at the height of the recession in 2011, said H.D. Palmer, deputy director of the California Department of Finance.

School districts, as employers, are responsible for workers’ retirement plans, he said.

“This is an effort to make a more solvent and sustainable retirement system for public employees over the long haul,” Palmer said. “These increases are not going to be immediate, they’re going to be phased in.”

“Why is it the school districts are having to pay for the inability of CalPERS to make money?” asked Enrique Palacios, the deputy superintendent and chief business officer. “You tell me what business in the state of California contributes that level of funding for retirement benefits. No one.”

Pittsburg expects to pay about $2.2 million of its $100 million budget this year into CalPERS. Doubling the cost will hit hard, Palacios said, requiring districts to pull money from academic programs and limit staff raises.

“Who gets the black eye in the public opinion? The local agency. Not the state,” Palacios said. While the state has increased education funding over the last few years, he said, “The financial impact to districts will compromise all the education reforms that Jerry Brown has been trying to do. The state needs to step into this.”

…Continue reading @ SF Chronicle