The economic crisis arising from the public health crisis we now face shows why the state auditor was correct in calling out El Cerrito and several other California cities for their perilous financial positions during a decade of economic growth. While El Cerrito may have been able to “get away” with uncontrolled spending during good...
Now that financial markets around the world are experiencing a long-overdue correction, the best we can hope for is that we hit bottom before a deflationary cascade causes a worldwide depression. Those economists who believe in the long-term debt cycle may claim that this time the end has arrived, and they may be right. COVID-19, oil price...
Gavin Newsom, the lily white, urbane, coiffured scion of San Francisco’s posh royalty, is California’s highest ranking Democrat. He presides over a party that has taken progressive ideals beyond absurdity to the brink of tyranny. One would think that the party of Gavin Newsom is bent on destroying everything Gavin Newsom represents. So what’s going on?...
On Friday, Gov. Gavin Newsom presented a 2020-21 state budget that includes more money for K-12 public schools than ever before. But even as metrics-driven education reforms over the past quarter-century have paid major dividends in both union states (Massachusetts, New Jersey) and non-union states (Florida, Texas), California lawmakers have never seriously considered trying to...
With markets fitfully advancing after a nearly two year pause, the need for pension reform again fades from public discussion. And it’s easy for pension reformers to forget that even when funds are obviously imperiled, with growing unfunded liabilities and continuously increasing demands from the pension funds, hardly anyone understands what’s going on. Unless you are sitting on a...
Better pay and working conditions for teachers can be achieved, if only the unions would get out of the way. We live in striking times. In 2018 there were state-wide teacher work stoppages in West Virginia, Oklahoma, Arizona, et al. And this year, we have seen strikes in Denver, Los Angeles and Chicago. Not surprisingly,...
In the early 2000s, along with many other cities, state agencies and counties in California, Sonoma County enhanced their employee pension benefits. As of 6/30/2018, Sonoma County’s pension system had $2.7 billion of invested assets, but nearly $3.1 billion in actuarial accrued liabilities. To what extent is its $400 million unfunded liability attributable to the...
CalPERS still hasn’t issued their actuarial analyses for the period ending 6/30/2018, even though a year ago, the 6/30/2017 analyses were available. Could it be related to the fact that the DJIA index on 10/01/2018 was 26,447 and as of midday 10/01/2019 it sits at 26,599? Did CalPERS have a bad year and what does that mean? What...
A blockbuster report exposes myths about the teaching profession, but will it matter? People love stories, and the gooier and more heart-rending the better. Few are more likely to send readers running for a box of tissues than the tale of a dedicated, but woefully underpaid teacher who is forced to take a second job,...
The unions treatment of teachers as interchangeable parts does great damage to the education process. In my post last week, I gave ample proof that the claim of a nationwide teacher shortage is bogus. For example, in California, where the teachers unions insist that teachers are “leaving the profession in unprecedented numbers,” there is no widespread...
Want to know another reason California’s teachers unions are desperate to unionize charter schools? They want the leverage to force these schools to participate in CalSTRS, because CalSTRS charges all its participants the same pension contribution rates. This is a truly amazing, grotesquely unfair, astonishing scam. It means that new schools have to pay for...
here Pick a city in California. Pick a county in California. Odds are, they could be the topic of this analysis instead of Richmond. But Richmond is the focus of a recent analysis published in Reason entitled “Richmond, California’s Finances Remain Shaky,” and that work provides solid data from which to take a deeper look at what’s truly driving...
In 1999, at the height of the stock market runup fueled by the internet bubble, California’s state legislature passed SB 400, which increased pension benefits for officers with the California Highway Patrol. Over the next several years, pension benefits were similarly increased for government employees working in nearly every one of California’s cities, counties, state agencies,...
The virtue of a defined contribution plan is that once the employer has made their contribution, the employer’s obligation is fulfilled. The employee’s retirement benefit is based on a “defined” contribution – typically some fixed percentage of their base pay – that money is invested, and the retiree lives on the accumulated savings and interest....