Finance | California Policy Center

How Much Could California’s Government Pensions Cost Taxpayers?

This week both of California’s largest government employee pension funds, CalPERS and CalSTRS, released their portfolio earnings numbers for the most recent twelve months. In a statement released on January 24th, “CalSTRS Calendar Year-End Investment Returns Show Slight Gains,” CalSTRS disclosed “Investment returns for the California State Teachers’ Retirement System (CalSTRS) ended the 2011 calendar...

By Editor

CalPERS Earned 1.1% on Investments in 2011, Plan Assumptions are 7.75%

Pension plans rebounded sharply in 2009 and 2010 from the devastating losses in 2008. However they never got back to even. 2011 was another poor year, and in spite of the start to 2012 I expect this year and/or next year to suffer more losses, or alternatively the market to limp along with no gains...

By Mike Shedlock

David Stockman: The Triumph of Crony Capitalism

David Stockman former budget director for President Reagan, appeared on Bill Moyers and presented his message about money, Wall Street financiers, and crony capitalism. Link: David Stockman on Crony Capitalism Money dominates politics, distorting free markets and endangering democracy. “As a result,” Stockman says, “we have neither capitalism nor democracy. We have crony capitalism.” Stockman...

By Mike Shedlock

The Government Class Runs California

Years ago, after starting to report and editorialize on news events in an old factory city in Ohio, I was quickly dubbed a “negative” for pointing out the disastrous government spending, housing and tax policies embraced by city leaders — policies that were keeping a nice place wretched. Anyone who made similar criticisms was dismissed...

By Steven Greenhut

More Pension Truths and Why You Should be Very Angry

How much is that sweet retired teacher who lives down the street draining from your bank account? As the public employee pension mess worsens in California, little Rhode Island shows a way out. In last week’s post, I focused on “air time,” a little known scheme in California and 20 other states that allows teachers...

By Larry Sand

California Court Backs Government Union’s “Contract on California”

As the public employee pension and health care benefit crisis sweeps across the nation, some states are dealing seriously with these multibillion-dollar threats to public services and treasuries. And other states remain in deep denial. California, to no one’s surprise, is moving stridently in the wrong direction. The tiny state of Rhode Island, for instance,...

By Steven Greenhut

How Government Unions And Their Allies On Wall Street Are Destroying California

With government employees, a union agenda is inherently in conflict with the public interest, because unless taxes are raised, there is always a choice between higher wages for government workers, or investing in improving government services. With unions in the government, the overall union agenda – more wages and benefits, more union members – is...

By Editor

Detroit Faces Imminent Financial Crisis

Michigan Live reports Detroit could run out of cash in December, plan must include layoffs Bing is expected to discuss a confidential Ernst & Young report obtained by the Detroit Free Press that suggests Detroit could run out of cash by April without steep cuts to staff and public services. That’s a grim prognosis, but...

By Mike Shedlock

Four Ways to Eliminate California’s Government Deficits

The recovery has fizzled out in California with revenues $1.5 billion below overly-optimistic estimates. California tax collections since the start of the fiscal year have fallen $1.5 billion behind projections, raising concern that the most-populous U.S. state will face automatic spending cuts. Revenue was $810.5 million less than budgeted in October, bringing the total to...

By Mike Shedlock

Brown’s Pension Reforms Face Union-Controlled Legislature

Despite some encouraging details in Gov. Jerry Brown’s recently announced pension-reform proposal, there’s virtually no chance the state will seriously reform — or even seriously attempt to reform — a system creaking under the weight of up to an estimated $500 billion in unfunded liabilities. The proposal isn’t bad. It doesn’t go far enough to...

By Steven Greenhut

Public Sector Pensions Investing in Hedge Funds

In less than five years California will have over 10 million residents who are over the age of 55 (ref. U.S. Census, California Demographics). If every one of these people were to receive a pension equivalent to what the average public employee in California can now expect after working full-time for no more than 30...

By Editor

San Francisco Political Establishment Fights Pension Reform

To outsiders, liberal San Francisco may seem preoccupied with leftist protesters occupying prime real estate in the Financial District or with debating proper restaurant etiquette for the city’s small but flagrant nudist population, or until recently, with arguing whether male circumcision should be outlawed. But the prospect of bankruptcy focuses the mind, even in a city so obsessed with leftist causes celebres....

By Steven Greenhut

California’s Public Safety Compensation Trends, 2000-2010

Today’s Wall Street Journal published an article by Phil Izzo entitled “Bleak News for Americans’ Income,” where, citing U.S. Census Data, it was reported that U.S. median household income – adjusted for inflation – fell by 7% over the past ten years. In constant 2010 dollars, the average household in the U.S. saw their income...

By Edward Ring

Hollywood Florida Residents Vote to Cut Government Worker Pensions

Residents of Hollywood Florida have had enough of exorbitant police, fire and city workers. In a referendum pitting a 23% tax increase against public union benefits, voters made the smart choice. The turnout was small, but that should have favored the unions because every one of them probably voted to keep the gravy pain and...

By Mike Shedlock