The Reason Foundation, on "How to Fix California's Pension Crisis"

The Reason Foundation is a 501(c)(3) non-profit (donate today!) with two primary functions: 1) publishing all Reason-branded editorial content, such as this sentence, and 2) conducting a bunch of nonpartisan public-policy analysis to help lawmakers and their bosses (youse) make better decisions. Being headquartered in California, some of the best research behind Door Number 2 has to do with the clusterfudge that is the Golden State's public policy.

On that topic, the Foundation today has released a shiny new study called "How to Fix California's Pension Crisis" (summary here, whole PDF report here), by Adam Summers. Some lowlights about the state they're in:

* California's public pension and retiree health and dental care expenditures have quintupled since fiscal year 1998-99, from about $1 billion to $5 billion this year. Retirement spending is expected to triple again - to $15 billion - within the next decade. [...]

* Since 2008, California has added over 13,000 employees to the state payroll during this recession. [...]

* In the 1960s, just one out of every 20 California state workers received "public safety" pensions. Now, one out of three state workers receives the lavish public safety benefits originally intended for the firefighters and police officers who put themselves in harm's way. [...]

* California taxpayers pay 85 percent of the health care premiums for most active state workers, 100 percent of the health care costs for most state retirees and 90 percent of health care costs for their families.

* CalPERS reported a loss of $56.2 billion for the fiscal year that ended June 30, 2009. CalSTRS posted a loss of $43.4 billion in 2009. California taxpayers are on the hook for funding shortfalls not made up by pension fund performance or employee contributions, so taxpayers will be paying more to make up for these pension investment losses. [...]

* California is the only state in the nation that uses just one year – an employee's final year salary – to determine their long-term pension benefits. Most states use three- or five-year periods to determine pension benefits, making their systems less susceptible to pension spiking.

Among the many sensible suggested reforms:

* Close the defined-benefit pension plans for state employees and enroll all new employees in defined-contribution plans for pensions and other post-employment benefits, such as retiree health care and dental benefits. [...]

* Adopt an amendment to the state constitution prohibiting retroactive benefit increases.

Start chewing on the report here. Past Reason coverage on California's pension mess here.

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  • Tim||

    Two words: Federal Bailout.

  • ||

    One word: Carpetbombing.

  • AlmightyJB||

    Yeah, I think we should combine the last two articles on fixing California and the Nuclear option.

  • ||

    Lex Luthor was the solution that came before the problem.

  • ||

    "Bye-bye, California. Hello, new west coast. My west coast. Costa Del Lex. Luthorville. Marina del Lex. Otisburg... Otisburg?"

  • ||

    Mr. McGuire: I want to say one word to you. Just one word.
    Benjamin: Yes, sir.
    Mr. McGuire: Are you listening?
    Benjamin: Yes, I am.
    Mr. McGuire: Pensions.
    Benjamin: Just how do you mean that, sir?

  • ||

    There is a joke in the army about losing weight. It goes, there is only one weight loss program that works every time, eat less exercise more. I am reminded of that when I read these pension stories. There is nothing complex about it; spend less and collect more. There is always a simple answer. It is just not an easy answer or the one you want to hear.

  • ||

    Oh shit I got it backwards, I've been eating more and exercising less.

  • ||

    Getting your legs blown off by an IED probably helps take off some pounds too.

  • moosecat||

    Caligreecia

  • hmm||

    If you're going to speak redneck do it right. The plural of youse is youse all. Otherwise you are only addressing one person, and I expect you may want more than one person donating.

  • BakedPenguin||

    "youse" isn't Redneck, it's Guido. "Y'all" is redneck, and it's both singular and plural.

  • ||

    Living on the boarder between Cajun country and Redneck country, I can confirm Baked Penguin is correct.

  • ||

    Border-Damn it!

  • Drax the Destroyer||

    We need an Escape from LA situation expanded to the whole state to cut ourselves off from California's looming fiscocalypse. California will be stricken from the textbooks and will henceforth be known as Tartarus, land of the dead.

  • ||

    Just let them print their own currency. Call them Pelosis. Then they can just inflate their way out of debt without destroying the rest of the country.

  • Corduroy||

    I concur. They show no willingness to reform. I communicate regularly with old friends in CA and most of them are brainwashed. They blame everything on corporations. To the point that one of them calls for an end to for-profit corporations. It's utterly hopeless.

  • ||

    The Civil War settled the issue of whether a state can leave the union (it can't). But what about the rest of the country kicking a state out of the Union?

  • Michael Ejercito||

    I concur. They show no willingness to reform. I communicate regularly with old friends in CA and most of them are brainwashed. They blame everything on corporations. To the point that one of them calls for an end to for-profit corporations. It's utterly hopeless.


    How about we just get rid of the Bay Area?

  • ||

    Kurt Russell will have to go into California, which has been walled off, and plant a nuclear device in Sacramento. He can then rescue as many Hollywood starlets as he has time for before escaping.

  • Hockey Guy||

    This is not going to end well.

    Most elected officials here do not even acknowledge a problem and if they do it is because WE are not paying enough taxes. It may be time for a trip to Sacramento with the tar and feathers, anyone want to go?

  • ||

    Being headquartered in California, some of the best research behind Door Number 2 has to do with the clusterfudge that is the Golden State's public policy.

    I'll take what's in the box, thank you.

  • ||

    Note to self, get a government job before the racket is up.

  • kinnath||

    It is time to expel CA from the Union.

  • Suck it up Crybaby||

    The elected officials feel no pain as their paychecks are always in the bank.
    Remember that Jerry Brown unionized the state workers his last term as Governor.
    Forget the tar & feathers, how about pitchforks and torches.
    www.suckitupcrybaby.com

  • Hockey Guy||

    How about tar and feathers, wait 1 hour and then prodding with pitchforks and ignition by torches?

  • ||

    To the point that one of them calls for an end to for-profit corporations.

    Isn't that in the California State Constitution?

  • Corduroy||

    It's certainly been institutionalized in the Legislature.

  • BakedPenguin||

    “My name is Schwarzeneggar, king of kings:
    Look upon my works, ye Mighty, and despair!”

  • ||

    "And when he saw that there were no other governmental departments to fuck up, Schwarzeneggar wept."

  • ||

    To be fair to Schwarzeneggar, he DID veto SB 840 and its predecessor.

    Other than that, he has mostly just caved in on everything which is, while disappointing, unsurprising.

    He actually DID try to undo the unions in his first year and they destroyed him. Since then he's been a lackey.

  • ||

    The study proposal lacks THE critically needed change .... without which all the others will not matter (as CA will be broke in short order).

    That change is a significant pension formula reduction (not for PAST), but for FUTURE years of service for CURRENT, (yes CURRENT) workers.

  • ||

    That's going to happen regardless. If I promise you 1 zillion dollars a year that I don't have, never could have, and never will be able to acquire, don't be shocked when when I end up paying you less than that.

  • hmm||

    "How to Fix California's Pension Crisis"

    Several low yield nuclear devices.

  • ChrisO||

    Bankruptcy.

  • ||

    The magnitude of California's problems (and the future of the US) cannot be solved with token spending cuts and increasing already too-high taxes. There is only ONE real solution.

    Disband and outlaw all unions. Abrogate all union contracts, and adjust their wages, benefits, health care, and retirement as equivalent to private benefits (which is what the rest of us have to live with). It's must "social justice" and "redistribution of the wealth" as Obama stated was his goal.

  • asldkjfdlkjfja||

    'Adopt an amendment to the state constitution prohibiting retroactive benefit increases.'

    And make it retroactive.

  • realityonetwo||

    I stopped reading less than 10 words in when I saw "donate today!".

  • ||

    Anyone who works inside the walls of a prison or where prisoners are working, hospitalized or camped are potentially at risk. This includes medical, clerical, religious, educational, operations, administrative and mental health personnel. They also deserve safety retirement when working closely with this population.

    Elaina Jannell, Ph.D.
    AFSCME Local 2620

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