California: Pension Editorials

There are a handful of editors that have popped up regarding the topic of California pensions.

Here's one from the Mercury News. Some interesting notes:

Newsom will inherit a staggering $257 billion shortfall in state and school workers’ pension and retiree health care funds . . . So when state Legislative Analyst Mac Taylor gushed earlier this month about the annual state budget being in “remarkably good shape” with a forecast $15 billion surplus for the upcoming 2019-20 fiscal year, we had to question that characterization. The only reason there is a surplus is because Brown kept payments on retirement debt low by irresponsibly stretching them out for decades.

That's an interesting note about the $15 billion surplus. One could call it smoke and mirrors. I'm assuming without stretching out the pension payments, we'd be in a deficit. At least, this is how I read the sentence.



Here's one from the San Diego Union Tribune. Some interesting points:

Today, California’s pension shortages are in the hundreds of billions of dollars! Despite a roaring stock market and increased city contributions, CalPERS (the agency which administers most municipal pensions) has only about 70 percent of the funds needed to pay estimated future pension benefits.

The stock market is now in correction territory. Some of this correction is likely due to the trade war started by President Trump. If the trade war is resolved, the stock market might increase again. But still, depending on how long this trade war continues, it has to put strains on state pensions.

And a final editorial from The Daily Caller.

This past November, California voters were presented with a whopping 386 local tax and bond measures. Among those, they passed 51 of 53 majority-vote sales tax measures, increases ranging from an eighth of a percent to 1.5 percent — a stunning .962 batting average.

The opinion basically calls these taxes and bond increases attempts to cover shortfalls in pensions. At what point do voters tire of increases to their taxes and start realizing the real reason behind these proposals? And how far does the stock market have to fall before pensions become seriously underfunded and more tax measures must be passed by voters?