July 19, 2010

How Do You Spell “California”? M-e-s-s California’s budget for 2010-2011 was due on June 15. By law it is to be passed by the end of June. It wasn’t. In recent years it has taken anywhere from two to four months beyond the deadline to get a budget, usually done with a combination of bookkeeping legerdemain, delayed spending, a few cuts, new bonds and, in general, a kick-the-can-down-the-road approach to the problem. The underlying problem is that too many wants are chasing too few dollars. During the recession, state revenue has declined. California’s high-tax, heavy-regulation climate has had the effect of driving some businesses out of the state and discouraging others from coming in. A large component of the budget problem is the size of the state’s public employee pensions. In 1999, during flush times, the legislature’s perpetual Democratic majority and then-Gov. Gray Davis, gave large increases in pension benefits to all state employees. Most counties and cities followed suit. Now, virtually every government body in the state is facing a deficit. A Stanford University estimate puts the size of California’s unfunded pension liability at close to half a trillion dollars. Over the years, most counties and cities abandoned their own pension systems and joined CALPERS, the California Public Employees Retirement System. It is the nation’s largest pension fund. For years it enjoyed a golden reputation, turning in steady annual gains from its investments. That has turned to ashes. Over the last two years, CALPERS has been under the gun for risky investments in real estate projects and evidence of questionable practices.


I'm a watchman for Christ, looking on the horizon in expectation for the fulfillment of God's Word.

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