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Schwarzenegger: Public Pensions and Our Fiscal Future

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Re: Schwarzenegger: Public Pensions and Our Fiscal Future

#131

Post by anamax »

irons wrote: post #68
mark_l_watson wrote: post #11

About 25 years ago in California, Orange Country went bankrupt and public employees had to do "give backs" of (if I remember correctly) about 1/2 of their retirement funds and other concessions. I think that this will be the model for the future, but a state levels. It may not seem fair to change the rules on public employees, but effectively the rules have changed for private employees because the economy at federal…

You're right: voiding other people's contracts because they (collectively) negotiated better deals than you did doesn't seem fair at all. Arnold knows exactly how to push your buttons.

> You're right: voiding other people's contracts because they (collectively) negotiated better deals than you did doesn't seem fair at all.

You're forgetting that govt is a monopoly. GM can promise anything it wants to its retirees, but if its customers decide to buy Toyota, GM won't honor those promises (unless the govt bails them out).

If San Jose makes promises, folks who had nothing to do with those promises are forced to make good.

That's why public employees and public works projects (SJ Arena, light rail, pro-sports facilities) should be on a pay-as-you go or collateral basis. That way, the stadium failure won't be a burden on future tax payers.

If you think that such things are a great idea, buy the bonds. If you're correct, great. If you're wrong, you get to foreclose.

Re: Schwarzenegger: Public Pensions and Our Fiscal Future

#132

Post by aswanson »

dasil003 wrote: post #118
aswanson wrote: post #109

Earlier quoted context omitted.

One solution may be to have taxpayers directly vote on benefits for public servants...make the unions take on the people who will be paying for it rather than temporary placeholders with no real skin in the game.

Assuming reasonably educated voters. But as we've seen in California, the ballot initiative process only helps the idea that can be distilled down to a compelling soundbyte and is championed by the deeper pockets. I'm afraid public employee compensation reform probably loses on both counts.

Soundbyte. :)

Re: Schwarzenegger: Public Pensions and Our Fiscal Future

#133

Post by timr »

callmeed wrote: post #101
donaldc wrote: post #49

Earlier quoted context omitted.

Since UCB gets state funding, this may make the professor and his pension a part of the very problem he (the professor) is complaining about.

And makes it more laughable that he framed his letter as "an apology"

Remember, this is one side of the debate. There's a lot more to the story than you're reading here, so perhaps you should hold off on the laughter.

I generally agree with the governor, but I also tend to believe that the state has to make good on past obligations -- especially when real people have planned their lives around those obligations. The 55-year-old retiree with fat benefits is a political straw man, but reality is much less clear.

Re: Schwarzenegger: Public Pensions and Our Fiscal Future

#134

Post by MaysonL »

CWuestefeld wrote: post #108
MaysonL wrote: post #91

Earlier quoted context omitted.

I have a feeling those graphs are more than a little fishy - the bottom one especially. Retirement costs went up ~5X from 2000 to 2010? And they'll go up by the same from 2010 to 2020? I call BS.

It's a very reasonable number. Consider that there are three factors feeding this: 1. Increased promises to the public sector workforce. 2. The need to make up shortfall in the funding due to market declines. 3. The need to make up shortfall because the funding was insufficient to begin with, owing to accounting ... creativity.

And these three factors are going to continue for the next 10 years? I strongly doubt it.

Re: Schwarzenegger: Public Pensions and Our Fiscal Future

#135

Post by jbooth »

yummyfajitas wrote: post #123
jbooth wrote: post #120

Earlier quoted context omitted.

Give me a break. Those low level employees do a job under a contract which was supposedly negotiated in good faith. Now because you don't like "unions" or "government" it's ok to stiff people who perform a public service for a previously agreed upon wage and benefits? What, because highway workers weren't doing financial due diligence on the multi-hundred-million dollar county's books? It was their responsibility to…

Union contracts are not negotiated in good faith. That's the problem. Our politicians do not get into negotiations with the union, driving as hard a bargain as possible and looking out for the taxpayers. Our politicians are in league with the unions hoping to get their support in the next election. In any case, no one wants unions to supply labor for free - all anyone is advocating is that the government pay it's sup…

Liberals don't claim that the government should renege on a contract that was lawfully entered into with a military contractor. In fact, nobody claims that, ever. Yet whenever local budgets are crunched, we always hear about how greedy the municipal workers are. You know what policemen and highway workers get paid?

I've negotiated union deals from the government side. I negotiated fairly, in good faith, and nobody attempted to bribe me with campaign contributions or do 1/10 of the stuff that regularly happens in Washington with military contractors.

Your assumption that the deal must be crooked because it's paying workers is ridiculous. How about the fact that they were out of money because they were cooking the books? How come the workers have to pay for that screwup?

Re: Schwarzenegger: Public Pensions and Our Fiscal Future

#136

Post by chollida1 »

sliverstorm wrote: post #127
pchristensen wrote: post #25

If he forces through public pension reform, my opinion of Arnold as a politician would go way, way, up.

When I was a kid and he was elected, I thought he would be a bit of a joke. A movie star elected governor by Hollywood- California really is crazy! My opinion has changed drastically since then, and I find myself proud to have him as our governor.

> A movie star elected governor by Hollywood- California really is crazy!

I guess you've never heard of Ronald Regan:)

http://en.wikipedia.org/wiki/Ronald_Reagan

Re: Schwarzenegger: Public Pensions and Our Fiscal Future

#137

Post by sliverstorm »

chollida1 wrote: post #136
sliverstorm wrote: post #127

Earlier quoted context omitted.

When I was a kid and he was elected, I thought he would be a bit of a joke. A movie star elected governor by Hollywood- California really is crazy! My opinion has changed drastically since then, and I find myself proud to have him as our governor.

> A movie star elected governor by Hollywood- California really is crazy! I guess you've never heard of Ronald Regan:) http://en.wikipedia.org/wiki/Ronald_Reagan

My mistake! I knew about Regan, but I didn't know he was a Cali guvner first.

Re: Schwarzenegger: Public Pensions and Our Fiscal Future

#138

Post by btilly »

robryan wrote: post #9
nlavezzo wrote: post #4

Earlier quoted context omitted.

Everyone who buys California state bonds (which are income tax exempt) is loaning the money. The interest rate California has had to pay to entice people to buy these increasingly riskier bonds, has increased accordingly as the state's financial condition has deteriorated. It is a risky deal, and buying CA state bonds to hold until maturity is basically a bet that the state will get bailed out by the federal governme…

Yeah I knew it would be bonds, just seemed like a risky proposition. I guess any responsible economic action here isn't going to be popular so it's not going to happen? Hypothetically what would happen if the state decided to reform these pensions, slashing them right back to something they could realistically afford?

The fundamental problem is that a large amount of possible government action is hampered by a constitutional rule that says that 60% of the house has to agree on any budget. Structurally neither party has the power to get to 60% of the state legislature, voting for taxes is political suicide for Republicans, and voting to cut benefits is political suicide for Democrats. So we have permanent deadlock with no attempted solutions being politically viable.

With your example, if California tried that before declaring bankruptcy, there would be court challenges that California would lose. Even if contracts going forward were amended, that wouldn't help the structural problems from what has already happened.

Therefore California requires either bankruptcy or extraordinary assistance. And the Obama administration has indicated that no extraordinary assistance will be forthcoming.

It is worth noting here that California is one of the few states that pays more into the federal government than we get out, and the amount extra we have paid in over the years is more than enough to rescue the state government.

Re: Schwarzenegger: Public Pensions and Our Fiscal Future

#139

Post by natep »

aswanson wrote: post #132
dasil003 wrote: post #118

Earlier quoted context omitted.

Assuming reasonably educated voters. But as we've seen in California, the ballot initiative process only helps the idea that can be distilled down to a compelling soundbyte and is championed by the deeper pockets. I'm afraid public employee compensation reform probably loses on both counts.

Soundbyte. :)

Soundbyte = 8 soundbits :)
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