GOP's California Pension Reform Initiative Gets the One, Two Punch
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By Steve Maviglio
California Majority Report
The truth hurts.
That's the verdict on the two GOP pension proposals that have been reviewed by the nonpartisan Legislative Analyst's Office and Attorney General.
Just before the new year, the LAO noted that the proposals would cost governments more than $1 billion per year for up to 30 years. That alone should have put a stake in the heart of the ballot measures. On top of that, the LAO also noted that the measures probably wouldn't survive in court, along with a host of other problems.
Now we learn that proponents don't have anywhere near the financial backing they claimed. The Sacramento Bee is reporting that the "Sacramento-based California Pension Reform reported raising $128,600 late last month, mostly from Silicon Valley venture capitalists."
Apparently, potential financial backers see these measures for what they really are - bad for taxpayers and bad for California. According to the Bee: Three Silicon Valley venture capitalists contributed $25,000 each: Jesse Rogers, co-founder of Altamont Capital Partners, and Tench Coxe and G. Leonard Baker Jr., both managing partners of Sutter Hill Ventures.
Meanwhile yesterday, Attorney General Kamala Harris provided her straight-forward assessment of the measure. She noted that it would hurt teachers and other public employees hard, would have constitutional implications, and would - repeating the LAO's assessment - cost more money than it would save for decades.
Good for her to level with voters about what these sloppily-written measures really do.
Now you'd think that anyone with common sense would pronounce these measures DOA.
But the Republicans behind the measure -- former GOP Party Chair Duf Sundheim and former Schwarzenegger aide Dan Pellissier -- are more interested in making money on an initiative for their own personal gain than leveling with their funders about how damaging the LAO's assessment (and now the AG's title and summary is). You could tell by their screeching in their reaction statement today -- filled with inaccuracies -- that they will still try to convince some naive funders to plow money into a campaign that will go nowhere.
The pro-pension slashing forces have said they will poll their two measures once they get the Title and Summary to see which one does better, and then shop that to possible funders.
Nevermind how pathetic that sounds -- they're more interested in what polls better than what's the best public policy for the state.
But it is clear from the LAO's assessment and the AG's title and summary that these measures should be put in the scrapheap of failed ideas that California voters never see on their ballots.
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Steven Maviglio is a Sacramento-based public affairs and political consultant. He is the former Deputy Chief of Staff to Speakers Karen Bass and Fabian Nunez. This article originally appeared in the California Majority Report.
What we learned is that CALPERS and CALstrs are ponzi schemes and unless we keep pumping money into them they will collapse in a huge financial fireball....that is what we learned.
If we pull new employees out of public pensions and put them into 401Ks who will fund the pensions of the retired and soon to retire public employees? according to the LAO, it would be the people of California on the hook to make up the difference.
At least this LAO report does one important thing, it puts to rest, once and for all, the myth that retirees fund their own retirement. Bullpuckey. they don't pay in nearly enough and the wildly optimistic returns thrown about by Calpers for years haven't helped much.
There are no good choices here. Short term financial pain or a long slow descent into absolute financial ruin as the whole ponzi house of cards eventually collapses.
California will have fewer public employees and more retiress going forward, the taxpayers are obligated to fund the shortfalls (at least for Calpers)in payments. That shortfall will only grow and grow over the years. Might as well take a big hit today and fix this mess.
So you're saying that despite the fact that these proposals have been proven to hurt humans and the economy, while doing nothing for the deficit, you still support them?
As for employees contributions...pensions were NEGOTIATED - and this was what employers, both corporate and government, wanted at the time so they could keep wages down instead. Now they come running back to hit teachers, janitors, and firefighters to pay for their (in the case of government) continued tax cuts to the rich and corporations, the prop 13 abomination, and things like the vehicle license fee cut?
Public employees have been giving up more and more, you know, people, like teachers, who are already under constant assault from knuckle draggers like "dude"...and, have already been getting hammered with pay cuts, furloughs, layoffs...and yes, across the country, pension reforms too.
Funny how we give trillions to bailout banks, trillions for wars, trillions in tax cuts for millionaires...all while spending more than all other nations combined on defense yet people like you want to come demand more from cops and teachers. Nice.
Public school teachers in particular (I know they're being targeted by the right wing because they give money to Democrats and they want to privatize education...but really??) have been taking huge cuts in their salaries even as class sizes continue to swell and school budgets are cut...and they keep getting laid off.
No one is arguing that some reforms will be undertaken...unions have offered them, and in fact, those proposals score better than these GOP attempts to crush public employees (like in Wisconsin, Ohio, Florida, etc.). Sadly, this is a reality in the CA world of our minority rules legislature when it comes to generating new revenues, and a Prop 13 that allows big commercial real estate to shift more and more of the tax burden to average Californians.
The fact is, pensions make up a small percent (about 3%) of our budget costs...and they're largely in the shape they're in because of a housing bubble and stock market crash created by a Wall Street ponzi scheme.
As just reported by healthcal.org, "California ranks low in number of government workers -- California’s state and local governments are among the leanest in the nation when it comes to the number of employees on their payrolls as a proportion of the state’s population, according to the latest numbers crunched by economist Steve Levy."
So get your facts straight...and, if you're going to support punishing middle class workers for the crimes of the top 1%, mega corporations and Wall Street, please, at least do us the favor to support pension reforms that don't make the state worse off...even in terms of the very deficit you say you care so much about.
My god...its like you're a Fox News robot regurgitating misinformation fed through a tube sticking from your radio and tv into your very, very small little brain.
the pensions were not negotiated, unless you call this a negotiation.
"Dear Democratic legislator, you'd better vote for our pension package or we'll run someone against you in the next primary and you'll be out of a job"
And please, this has nothing to do with mega corporations and the 1%...they will not be the ones on the hook to pay these pension obligations, it will be the ordinary people of California. California's public pensions have been too generous for too long and they are unsustainable.
Middle class people in California are being punished by the greedy 1% on their right flank and the greedy 3% at 50 public employees on their left. You are being disingenuous pleading their case if you continue to stand up and defend people being able to retire at 50 and take home $150,000 a year, the bulk of it taxpayer funded.
I'm all for unions and public pensions, but they ought to be self sustaining. If their funds take a loss, then they take a loss just like everyone else. I'm sick and tired of watching my 401K get smaller and smaller and have public workers demand that I dig further into my pocket so they can retire at 50 and go fishing every day. I have to cover my own losses and theirs too. If you were truly a champion of the middle class you'd be trying to fix that little irony.
Actually, it was REPUBLICANS who voted against changes in the pension system -- apparently afraid of CCPOA. Democrats put up the vote to pass it while Republicans sat on their hands.(SB 400 repeal)
401k's are more expensive to administer and produce lower returns than defined benefit plans. Corporations forced workers into them. And now we have millions of Americans who won't have retirement security.
And, yes, pensions are negotiated. More than 200 jurisdictions in the state have renegotiated their pensions with unions at the bargaining table -- exactly where pension discussions should be taking place. In fact, all of the contracts negotiated by Gov. Brown have reduced pension benefits.
Even if you think pensions need to be cut back, these two ballot measures are poorly drafted. The LAO says they'll cost more than they'll save taxpayers for the next 30 years.
Who passed SB 400 in the first place??? hmmmm perhaps the single most reckless example of fiscal irresponsibility and union pandering in California historyd! How much did that behemoth of a givewaway cost the State? and I agree, the GOP are just as guilty as the Democrats and are beholden to the worst pension offenders, namely the prison guards and pudblic safety unions.
Of course 401Ks have lower returns than defined benefit plans, if the defined benefit plans portfolio underperforms in bad years the taxpayer just makes up the difference...THATS WHY THE BENEFITS ARE GUARANTEED!
At the end of the day we need to face reality. Our publid pension plans are grossly underfunded to the tune of perhaps half a trillion dollars...add in unfunded healthcare commitmments and you can double that. We can stop the pain now by chopping off that infected limb...it will hurt in the short term, but the long term alternative is a long slow death by gangarene.
Pensions are not negotiated. They are dictated by union bosses to their Democratic puppets. Unions control every facet f decision making in Sacramento. Answer me this one simple qyestion, the state budget has shrunk from a high of about $110 billion 4 years ago to $85 billion last year, about a 25% cut. Have we lost 25% of the CA state workforce? have they had 25% paycuts? 25% benefits cuts? No No and No. Our union friends have made sure that the people who have been cut are the elderly, the sick, and the children in our schools. They are the ones who have been cut, not the 3% at 50 fat cats.
Sure "dude", pensions aren't negotiated...and yes, the problem is those fat cat teachers and janitors and "union bosses" (dog whistle for fox news viewers)! Sure "dude"...sure. And yeah, let's force huge salary cuts to middle class workers...that will help the economy and the lives of their children!! Man "dude", you should run for office!
In the face of more and more tax cuts for the rich and corporations, and deregulation that LED TO THE CRASH and devastated pensions...there's this new news (how's your little brain going to morph this into right wing garbage?):
"The number of Californians reporting incomes of more than $1 million increased sharply last year, as did their share of the income stream, a new report from the Franchise Tax Board reveals.
There were 10,000 taxpayers in the million-dollar income club during the 2009 tax year – just one-third of 1 percent of all returns – but that number jumped 27 percent to more than 13,000 for 2010, based on tax returns filed in 2011.
The millionaires reported adjusted gross incomes of $22.4 billion in 2009, an average of $2.2 million each. In 2010, the total jumped 30.2 percent to $29.1 billion, with the average remaining virtually unchanged.
Those increases were by far the largest of any income group, the FTB said, while that group's share of all adjusted gross income increased from 3.7 percent in 2009 to 4.5 percent in 2010, and its share of taxes jumped from 9.5 percent to 11 percent."
The fact is, we KNOW austerity, like proposed by brainiacs like "dude", not only devastate the economy and human lives (countries implementing austerity have seen skyrocketing unemployment and below zero growth), but INCREASE the deficit too (because of the collapse in revenue). As we now see in Greece (who has been implementing, to a tee, what right wingers always ask for here in America and California)...it even has increased the deficit:
"Greece’s budget deficit widened last year as an austerity-fuelled recession cancelled out much of the extra revenues the government was hoping to raise through emergency taxes, data showed on Thursday. The central government budget gap widened 0.8 percent year-on-year to 21.64 billion euros ($27.45 billion) last year, according to figures from the finance ministry."
So for all those that ACTUALLY care about our budge deficits, and the human beings it effects, please support ballot measures like the Millionaires Tax come this November. Its all about priorities...do we continue to bail out Wall Street and the rich (that caused the crisis)...and fight wars based on lies...or do we take care of the 99% (and yes, that includes teachers, firefighters, cops and janitors)?
cool, just keep raising taxes and increasing benefits. And, if anybody doesn't like it, well tell them to leave the state. yeah, that's the ticket.
Keep raising taxes and increasing benefits???
Again...FACTS ARE FACTS: The rich pay less in taxes than at ANYTIME in 60 years (and half what they did in 1981)...which is particularly egregious in light of their enormously expanding share of the wealth (which is taxed at 15% due to capital gains) and income...which is the largest disparity since the 1920's.
As for California, again, the deficits are from tax cut after tax cut...and a housing bubble bursting due to Wall Street fraud. And benefits, and programs, keep getting cut and cut.
A few basic points based on numbers crunched from the California Budget Project (they've got TONS of this data...data you desperately need):
The share of corporate income paid in taxes has fallen by nearly half since 1981
Tax cuts enacted since 1993 in CA Cost $11.7 Billion in 2008-09 alone...
Lowest-Income households pay the largest share of their income in state and local Taxes: Bottom fifth pays 11.7%, top 1% pays 7.1%
Tax policies and economic trends are largest contributor to the state’s budget problems:
If corporations had paid the same share of their profits in corporate taxes in 2006 as they did in 1981, corporate tax collections would have been $8.4 billion higher.
Hell, extending the Bush tax cuts (overwhelmingly for the rich) alone cost California $14 billion this year.
In 2008, stuck into the budget was a nearly $1 billion a year tax cut to big business.
And, when Schwarzenegger eliminated the vehicle license fee that's over another $4 billion a year in lost revenue.
Add to that the austerity budget cuts and increasing assaults on public employees...I wonder how you can say anyone has been "raising peoples taxes" and "increasing benefits" - when, overall, the opposite has been happening for years (overwhelmingly so in fact)?
Why not ask for a little more from those that have it all and pay less than ever (top 1%, Wall St, Big Oil, etc.) to protect what little those have have left at the bottom and middle (teachers/firefighters/janitors, disabled, sick, poor, etc.)?
thank you Truth Squad. Full of info.
As a small businessman I can tell you that this little gem is completely bogus.