You public employees are nuts if you think we are going to pay down your $220 billion unfunded liabilities – pay your own bills, you slackers

19 Jan

But even as the governor and lawmakers debate how to spend a budget surplus, there’s a looming financial hurdle: Unfunded pension and health care liabilities of $220 billion for future retirees who work for the state and the University of California system.

Wait, shouldn’t that $220 billion been included in the total deficit? How can you have a budget surplus when you owe $220 billion?

As the Brown administration prepares to enter labor talks this year, the governor is seeking changes to help the state cut future costs, warning there’s “a serious long-term liability.”

Oh, you don’t say?!

Over the past four years, the Legislature moved to improve the financial outlook for the state’s largest public-employee pension systems, the California Public Employees Retirement System and California State Teachers Retirement System. Brown is now setting his sights on a rapidly growing retiree expense, health care. He’s asking workers to pay more to fund those benefits.

Get out! Asking workers to pay their own way! Stop it!

Reform advocates warn that failing to address unfunded liabilities will ultimately require higher taxes or cuts in other government services so the state can pay for its obligations to retired workers.

I guess that makes me, a reform advocate.  I don’t really like the word “reform,” cause they can turn that word in any direction, like a .45. “Reform” can just as easily mean, taxpayers pay more.

The state has promised an estimated $72 billion in health care benefits for its current and future retirees, an amount that will increase to more than $300 billion over the next three decades, according to the governor’s Department of Finance.

The bill for retiree health care has historically been paid year-by-year, about $2 billion in the proposed 2016-17 budget. Brown proposes prefunding benefits similar to the way the state pays for pensions — by paying into a trust fund that accrues investment returns over time, reducing the amount of money that taxpayers must contribute in the future.

In negotiations with public-employee unions, he’s asking state workers to pay into a fund through a deduction on their paychecks. The state would pay an equal amount.

“Over the next three decades we’d have enough money to basically eliminate that unfunded liability going forward,” Finance Director Michael Cohen told the California Chamber of Commerce on Tuesday.

That sounds like a no-brainer to me – have the employees pay ALOT MORE. But here’s the catch – if we expect them to pay their own benefits and pensions they want pay increases.

Brown’s budget proposal includes $350 million for pay raises that could be used as a bargaining chip in labor negotiations. The state is actively negotiating with four of its 21 bargaining units, including corrections officers, firefighters, scientists and maintenance workers. Talks with 15 others open this year.

The governor points to an agreement last year with state engineers as a model he’ll pursue with other bargaining units. Engineers agreed to pay an escalating portion of their paycheck toward their future health care benefits, eventually reaching 2 percent of salary, matched by the state.

Two percent of their salaries?

“The employees would not be too thrilled with paying the state’s bill” for retirement, but the agreement on the whole was viewed as acceptable, said Bruce Blanning, executive director of Professional Engineers in California Government, the union that reached the deal. The three-year deal included pay raises of 5 percent and 2 percent, he said, and there’s a chance to renegotiate before the health contributions are fully phased in by 2019.

Prefunding health care can help protect the benefits, but asking employees to contribute is part of the give-and-take of collective bargaining, said David Lowe, chairman of Californians for Retirement Security, a coalition of public-employee unions, their members and retirees that has fought to preserve the current pension system.

“That’s a legitimate way to ensure that the benefits get funded into the future,” Lowe said. “It’s just a question of figuring out how much the employees are willing to pay … and bargaining it.”

Find out how much they are willing to pay? Has anybody ever asked the taxpayers how much they are willing to pay?

“Reforms” enacted to date have done nothing to slow this train.  Public workers are determined to rip off the taxpayers.

“We can see from where the numbers are going how it’s going to crowd out education and all the other California services, and it’s ultimately unsustainable,” said Rob Lapsley, president of the California Business Roundtable. “The governor has to address it now and he’s been clear that he’s going to try to do that.”

I don’t see that, I see a big  train wreck ahead. Public workers have gone completely crazy.

6 Responses to “You public employees are nuts if you think we are going to pay down your $220 billion unfunded liabilities – pay your own bills, you slackers”

  1. Jim January 20, 2016 at 7:19 am #

    From the Chico ER this morning, regarding last night’s City Counsel meeting:
    “CalPERS rates are projected to increase to 31.2 percent for miscellaneous plans and 35.2 percent for safety plans for this year. To put that percentage into perspective, if someone made $10,000, the city would pay them that amount and make a $3,100 or $3,500 payment to CalPERS as well.

    Those rates are expected, based upon CalPERS Annual Valuation Report, to increase to 38.9 percent for miscellaneous plans and 39 percent for safety plans in 2016 to 2017.

    “Rates are pretty much skyrocketing here,” Fields said. “Financials show a total liability of about $100 million (for all governmental and business-type activities). That liability is supposed to reduce over time as we make our required annual contributions. … Obviously it’s a huge burden. We cannot change the plans for people who are in PERS. We can only move forward at this point.”

    BS- Of course we can change the deal for people in those plans, it’s called a : NEW CONTRACT! When they renew the employee’s contract, it’s all open for negation and adjustment.

    • Juanita Sumner January 20, 2016 at 7:37 am #

      thanks for bringing this up – I had only glanced at the article, it made me so mad I walked away.

      Yes, Frank Fields can be fired, and we can hire a new, more reasonable guy in his place. It’s doable, and we need to start letting guys like Frank Fields know it.

    • bob January 20, 2016 at 9:38 am #

      I don’t know, Jim. Let’s face it, the politicians are bought and paid for by these public employee unions, especially the cops and fire. And besides, if you look at the current city council, most of them are trough feeders.

      And what about all those already retired? They get automatic increases. Plus look at their medical coverage and how that cost is increasing. To my knowledge no one anywhere is broaching the topic of scaling back what existing retirees get. Anyway, all of this will cost a fortune.

      Mark my word, the politicians will put all this off as long as they can but in the end they will try to bleed the taxpayers white before there is any serious reform.

      Dan Walters has an article today about how hard it is to get any pension reform. The people trying (including the former mayor of San Jose) can’t even get a measure on the ballot for the next election.

      Former San Diego Councilman Carl DeMaio and former San Jose Mayor Chuck Reed, who pushed pension overhaul measures in their cities, have been trying for years to get traction for a statewide pension reform ballot measure.

      On Monday, they suspended their latest effort, citing a lack of several million dollars to qualify a measure for the November ballot and tens of millions of dollars more to campaign for it.

      The stark reality is that within the state, there are no deep pockets to finance such a campaign. However large they may be, fast-growing pension and health care liabilities don’t discomfit any major interest groups, since their greatest impacts are on local governments, especially cities, rather than on state government.

      Any reform campaign would be dependent on money from one or more wealthy individuals, probably from out of state, and it hasn’t materialized.

      Conversely, any broad retiree benefit reform effort would draw implacable, high-dollar opposition from unions.

      DeMaio and Reed say they hope the atmosphere will be different in 2018, particularly if the Supreme Court severely limits, in a pending case, the ability of the unions to raise political campaign money.

      It’s a faint hope at best, even if the unions were to lose in the Supreme Court. More likely, unfunded liabilities for retiree benefits will continue to grow as baby boomer employees exit, politicians will continue to make symbolic changes that slow the growth only slightly, and the day of reckoning will be postponed even more.

      Read more here:

      • bob January 21, 2016 at 4:39 pm #

        And here’s the depressing end to the above article:

        And, by the way, the pension reforms that DeMaio and Reed achieved at the local level are being dismantled in their absence.

        Maybe our public “servants” aren’t so nuts for thinking the taxsuckers will pick up the 220 billion dollar bill.

      • Juanita Sumner January 22, 2016 at 7:29 am #

        thanks Bob, I’ve also been following Reed’s efforts. I saw that AG Kamala Harris destroyed his state initiative.

        I’ve been trying to get $taff to tell me what they’ve spent fighting that lawsuit Donald Sipple brought against various cities including Chico for not refunding certain cell phone tax collections, and they just wont tell me. I’ll have to blog that little snit when I get a chance.

        When it’s time to march to city hall with torches, are you going to be with me?

      • Juanita Sumner January 22, 2016 at 7:46 am #

        Okay, forget the torches – write a note to the city manager and ask him for details on “Sipple vs the City of Chico”. Ask him how much staff time has gone into this lawsuit, and why they just don’t pay. CC the city clerk. That’s,

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