Thirty-First

The TRUE mountain of debt picture.

There are reports that suggest a state budget surplus of about $9 billion for California. But the states spare cash and rainy day funds pale before the mountain of long-term liabilities that California governments at all levels have accumulated.

Californias state and local government debt is estimated to total just over $1.5 trillion. That total includes all outstanding bonds, loans, and other long-term liabilities, along with the officially reported unfunded liability for other post-employment benefits (primarily retiree healthcare), as well as unfunded pension liabilities.

Californias largest pension system, CalPERS, has already told participating agencies they will be required to increase required employer contributions to the retirement fund. This will likely lead to budget cuts that will reduce government services and employment.

CalPERS demand for more money from state and local governments is hitting budgets even harder these days because tax revenues have been eroded by the COVID-19s recession. They force employers to dip into reserves, shift funds from other services, ask their voters to raise taxes or even borrow money to pay pension debts.

Yet our State continues to hand out high 6 figure incomes to State employees, to the tune of almost $50 million per year, adding to our future pension nightmare.

Our citizens cant continue to fund these expenditures that only serve to increase our debt and decrease our take home pay. We would suggest and push for immediate changes to this system. Knowing the courts would never agree to decreasing benefits, our first approach would be to reduce these high 6 figures incomes. Realistically decreasing any State salary of $120,000 annually by 10%, and any State salary over $240,000 by 20%. Our next approach would be the requirement of legally requiring these high 6 figure State income earners to invest more into their pensions while working for the State.

In a 4 year term, we believe that we can address current and future pension liabilities, as well as level out these outrageously high State employee incomes to a reasonable and manageable level.