Stanford University has done a study and you need to sit down. They found that between CalSTRS and CalPRS, they have close to one trillion in unfunded liabilities. When you add the health care program, the State has a total of $1.2 trillion in unfunded liabilities. Recently Democrat State Treasurer John Chiang released a report showing the State has a debt of $1.5 trillion—not a typo. Add to that the $350 billion in new taxes, extended taxes and bond measures—with another $100 billion to be added before the deadline for the November ballot, you understand why California is a financial disaster.
Thank you for reading this post, don't forget to subscribe!“Joe Nation, former Democratic assemblyman and current head of the project, says he was surprised by the results of their study. Based on less optimistic calculations, which assume a smaller return on investments than the 7.5 percent used by pension trust funds, the state’s liabilities amount to $77,700 per household. That would make California the third worst in the nation for debt per household and put its total pension debt at $946.4 billion.”
Totally unsustainable. The Teamsters on the East Coast just had their pension plan collapse and the retirees will have their checks cut back by 60%–or more. UPS might have to come up with just under $4 billion to help out—what do you think that does to your cost of using UPS? California will have two choices—check the size of the checks or raise taxes. Both hurt.
Calpers headquarters is seen in Sacramento, California, October 21, 2009. REUTERS/Max Whittaker
Stanford Data Project Offers Chilling Look at Public Pension Liabilities
California City News, 5/23/16
A group of researchers from Stanford University have painted an even bleaker picture of California’s public pension woes than the one formally being offered by state officials. In fact the state’s unfunded pension debt is skating dangerously close to $1 trillion, according to scholars at the Stanford Institute for Economic Policy Research. Their analysis is succinctly outlined by a new Pension Tracker research project which was launched last fall.
Joe Nation, former Democratic assemblyman and current head of the project, says he was surprised by the results of their study. Based on less optimistic calculations, which assume a smaller return on investments than the 7.5 percent used by pension trust funds, the state’s liabilities amount to $77,700 per household. That would make California the third worst in the nation for debt per household and put its total pension debt at $946.4 billion.
“Use of optimistic assumptions about rates of investment returns has obscured the cost and the risk to taxpayers,” said former San Jose Mayor and stalwart pension reform advocate Chuck Reed. “By using less-optimistic assumptions, PensionTracker shows the rest of the pension debt iceberg lurking beneath the water, waiting to sink the ship of state.”
That impending iceberg is also nicely broken down by local agencies on the tracker website. The City of Irwindale fares worst with public pension liabilities ranging from $32,447 to $137,907 depending on how the figure is calculated. The County of Alpine carries the second heaviest load, followed by Colma, Santa Fe Springs and San Francisco.
Read more about Stanford’s projections and navigate its nifty tracking website here.
About Stephen Frank
San Jose Mayor is in favor of pension reform. Sounds like a reasonable guy. Then why does he continue to favor choking traffic flow on City streets? San Jose is being hosed by this program of bikes where it regularly is over 90 degrees in the summer and freezing in the winter.
Why bring this up?
Because there seems to be a disconnect with the valley elected officials and when only one is willing to speak out it gives cover to the rest continuing stupid policies.
Pensions will kill the taxpayer but so will RHNA advocates and unsustainable resources in cities.
And people say that the State of Jefferson would not be viable. REALLY!?!?
Well, Golllleeeee!
Look at that, we’re f.cking broke!
Well Done, Moonbeam – that little acorn you planted 40+ years ago has grown up into a diseased tree needing to be propped up continuously to prevent it from toppling over and destroying everything.
Socialism works until you run out of other peoples money.