California is the fattest little piggy in the land, but Momma sow is about to make a run for it!

17 Aug

Thanks to CTA co-founder Casey Aplanalp, who sent me an article from – “Taxpayers, Pensioners Riding a Wave of Bankruptcies in Detroit and California,” by Adam Summers.

Here’s the link:

Summers observes, “One might say that California has been the ‘leader’ in municipal bankruptcies. Other than Detroit and Jefferson County, Alabama, which is looking to shave $1.2 billion off its $4.2 billion debt and emerge from bankruptcy by the end of the year, the largest municipal bankruptcies have been in California,” Hearkening back to the $2 billion Orange County bankruptcy of 1994, he lists a string of California cities that have since declared or are in pending bankruptcy.  

And then, “While not all municipal bankruptcies and financial emergencies are due to overly generous pension promises that can no longer be kept, pensions remain a common theme among many of the bankruptcies. A Stanford Institute for Economic Policy Research report noted that between 1999 and 2010, pension spending grew an average of 11.4 percent a year in California’s largest cities and counties – more than any other spending category and more than twice as much as spending on education, public safety, welfare, health and recreation.”

One example of a California city that is in deficit not due to pensions is Mammoth Lakes. Mammoth Lakes is a resort town, with a spendy ski resort that caters to the LA crowd. They got into trouble when, after several dry winters with low tourism rates, they got hit with a lawsuit from a developer. Over the development of their airport. Wow, sounds familiar,

But  in Chico, it’s the pensions and benefits in general – look at the budget. There’s a chart that shows how $taff and council bargained those contracts – with the public shoved completely out –  with council agreeing to pay more and more of the “employee share”, until most employees pay 4 percent to nothing for 70 – 90 percent of their salaries, available at age 50.  I don’t know how any intelligent person would think that’s sustainable, I can’t believe the kicking and screaming that’s come out of trying to get these leaches to let go and stand up like human beings to their own responsibilities. 

Governor Brown and the California legislature passed some pretty pissant  “pension reform,” requiring NEW HIRES to pay 50 percent of their pension premium. I would have thrown that deal right back in their limousines if I’d had the chance, what a joke.  First of all, “new hires” means, they’ve never worked for any public entity in any city, county or state. Almost every retirement system in the US has a deal with CalPERS – once you’re in the system, you can go anywhere, and your package is protected, you get the same deal everywhere.  Second, 50 percent is not enough. The whole deal needs to change. Instead of the taxpayers paying most or all and the employees contributing whatever they feel like, it needs to be exactly the opposite – employees pay their own way, and taxpayers contribute for long term loyal service as a bonus to hardworking employees.

Summers seems to agree. He says we not only need to increase the part employee’s pay, and make them pay it, but, “the experience of California shows that it will not be enough. It is simply too easy under existing defined-benefit pension plans to fudge the numbers and pass along unaffordable costs to taxpayers that will not be known for many years. Switching to 401(k)-style retirement plans, as the private sector has done for several decades, would make government pension contributions much more transparent and stable.”

And not just new hires, but current employees. New rules for only certain new hires “would only stop the bleeding, as it would still take years to accumulate significant savings. If state and local governments are to really achieve savings quickly, they must broach the “third rail” of pension politics: decreasing the unaccrued future pension benefits of current employees.” 

Here in Chico, we have a $48 million “unfunded pension liability”.  I believe the employees should pay most of that, especially given their salaries, drastically in excess of the average family’s means. I’m not making a moral statement here, I’m talking Common Sense. I’m tired of hysteria. I’m tired of the guilt trip I’ve been getting lately about people’s feelings. I’m tired of the bullshit  that has passed for a conversation on this issue, and I’m ready to take it to another level.




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