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California's 'wall of debt' is only a slice of its liability problem
Santa Cruz Sentinel ^ | 01/26/2014 | Jessica Calefati

Posted on 01/27/2014 6:22:26 AM PST by artichokegrower

SACRAMENTO -- Gov. Jerry Brown's image as a responsible, penny-pinching steward of California's finances has been cemented in recent weeks because of his renewed call to pay off California's "wall of debt.

That's a term Brown coined when he took office to describe the tens of billions of dollars California owed to public schools and special funds whose coffers were raided to help balance budgets in the past.

But look behind that $24.9 billion wall and you'll see a $330 billion skyline of other liabilities threatening the state's financial health. It includes $80 billion needed to cover teachers' pensions and $64 billion to pay for state workers' health care in retirement -- two particularly troublesome liabilities because the state isn't even making the minimum payments on them.

(Excerpt) Read more at santacruzsentinel.com ...


TOPICS: Business/Economy; Culture/Society; Government; US: California
KEYWORDS: california; californias; debt; liability; problem; slice; wallofdebt
And this situation exists with California having the highest sales tax, the highest fuel tax, and one of the highest state income tax and one of the highest property tax.
1 posted on 01/27/2014 6:22:26 AM PST by artichokegrower
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To: artichokegrower

Pony up your cash there Kalifornikaters. March in a gay parade waving your check stubs!


2 posted on 01/27/2014 6:29:59 AM PST by gr8eman (How ya doin Bob?...Bitchen!)
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To: artichokegrower
RE :”And this situation exists with California having the highest sales tax, the highest fuel tax, and one of the highest state income tax and one of the highest property tax”

Same thing with Maryland and O Malley, many on poor and middle class with zero resistance.

In the case of CA, Dems taking complete control of state gov ended the yearly deficits crises with all those tax increases, so in the short term it looks like a big success.

The question is : will all these taxes hurt CA long term? Its sure not Texas.

3 posted on 01/27/2014 6:34:52 AM PST by sickoflibs (Obama : 'If you like your Doctor you can keep him, PERIOD! Don't believe the GOPs warnings')
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To: artichokegrower

Clearly, they aren’t high enough.

Maybe they need an illegal alien tax?


4 posted on 01/27/2014 6:45:47 AM PST by ltc8k6
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To: artichokegrower

Are there that many state employed school teachers? No, but that was what I predicted, that school unions would start infecting every politician with the thinking that the state itself is a guarantor for teacher pensions and benefits because they’ve tapped out school districts which now pay more to teachers who used to work there than they do for their current payroll of teachers.

I can’t preach this enough: Public employees must be paid a flat salary which they can then use to buy whatever benefits they want. No retirement plans for any public employee (and most especially for any politician), no benefits plans, nothing. Heck, I don’t even mind if they give teachers a massive raise to equal all the current benefits while at the same time quashing any future benefits.

The core reasoning for ending this practice is that budgets need to start fresh each year. To have items that tie the hands of future budgets, there is a particular procedure called bonded debt, permitted for infrastructure only, and must be approved by the voters. That should be the only budget item that survives an election and a new school board or city government or county government.

And this is a problem that extends FAR beyond California and touches every city budget, every county budget and every state budget.


5 posted on 01/27/2014 6:52:43 AM PST by kingu (Everything starts with slashing the size and scope of the federal government.)
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To: artichokegrower

CA can solve this issue by raising taxes, floating debt bonds, adding more regulations, creating a new lottery, ..........


6 posted on 01/27/2014 7:23:20 AM PST by umgud (2A can't survive dem majorities)
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To: artichokegrower

The solution to all these problems is to build high speed rail. </sarcasm>


7 posted on 01/27/2014 7:36:06 AM PST by glorgau
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To: artichokegrower
And this situation exists with California having the highest sales tax, the highest fuel tax, and one of the highest state income tax and one of the highest property tax.

This situation exists due to Taxifornia having a one party rule and basically being a sanctuary state for illegals.

8 posted on 01/27/2014 7:46:01 AM PST by Mastador1 (I'll take a bad dog over a good politician any day!)
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To: glorgau
At the end of the article,"Whatever you want to say about Jerry Brown, you can't accuse him of being fiscally irresponsible," he said. "Down the road, I expect we'll see reform here."

Seriously? With 300 billion in unfunded liabilities? Let me be the first, then, to say that Jerry Brown and his Democratic legislative posse are fiscally irresponsible.

9 posted on 01/27/2014 7:53:37 AM PST by Thommas (The snout of the camel is in the tent..)
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To: kingu

You’re right that it reaches far beyond California.

Let me be the first on this thread to say what is now mathematically obvious to all casual observers:

The defined benefit pension is no longer workable, regardless of whether this pension is being offered by a private sector company or a government employer.

The defined benefit pension should now be regulated out of existence, because offering them amounts to financial fraud.

If employers (private or public) want to offer pensions, then they need to switch to defined contribution pensions, retirement savings plans, etc. But the pension that offers “$X for Y years or service” without any other considerations is done and gone.


10 posted on 01/27/2014 8:12:17 AM PST by NVDave
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To: artichokegrower

Cali, NY, and Ill are the cornerstones of Democrat electoral strategy. (Interestingly some of the most indebted also).

They will be the first to get federally guaranteed state borrowing.


11 posted on 01/27/2014 8:14:02 AM PST by nascarnation (I'm hiring Jack Palladino to investigate Baraq's golf scores.)
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To: artichokegrower

California should just sue the Democrat party. The lawyers know that you sue the organizations that have money. The Democrat party will never be out of money. You can squeeze them a million times, and the unions and the Limousine Liberals will just keep funding them.


12 posted on 01/27/2014 8:24:10 AM PST by blueunicorn6 ("A crack shot and a good dancer")
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To: artichokegrower

And the highest rate of uninformed voters in the country.


13 posted on 01/27/2014 8:26:50 AM PST by Vaduz
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To: artichokegrower

“..and one of the highest property tax.”

That simply isn’t true!


14 posted on 01/27/2014 9:30:55 AM PST by vette6387
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To: vette6387

Aww come on, don’t you know by now that many FReepers don’t let the truth get in the way of a good CA bashing?


15 posted on 01/27/2014 9:33:21 AM PST by SZonian (Throwing our allegiances to political parties in the long run gave away our liberty.)
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To: kingu
The core reasoning for ending this practice is that budgets need to start fresh each year. To have items that tie the hands of future budgets, there is a particular procedure called bonded debt, permitted for infrastructure only, and must be approved by the voters. That should be the only budget item that survives an election and a new school board or city government or county government.

This would make a terrific constitutional ballot initiative.

16 posted on 01/27/2014 5:57:34 PM PST by Carry_Okie (Grovelnator Shwarzenkaiser: fasionable fascism one charade at a time.)
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To: Carry_Okie
This would make a terrific constitutional ballot initiative.

I'd really like to see the present system defended in court, where a city bucks out of the system at present and states that they are no longer permitting human resource workers to take defacto control over budgets, where the only debt they will recognize is bonded debt approved by the voters. A spirited defense would do wonders; well, I should say spirited appeal, since likely the first court would find for the unions. After all, judges enjoy the same system as other public employees with even stronger benefits. They'd take a tremendous hit to the pocketbook if the present system ended.

17 posted on 01/29/2014 6:02:31 PM PST by kingu (Everything starts with slashing the size and scope of the federal government.)
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To: kingu
I'd really like to see the present system defended in court, where a city bucks out of the system at present and states that they are no longer permitting human resource workers to take defacto control over budgets, where the only debt they will recognize is bonded debt approved by the voters.

One way to do that is to put it in the local charter while simultaneously buying out the liability with a bond issue, an annuity so to speak. It would avoid the court costs, and fully fund the liability while ending the gambit. Some unions might go for that because it might be the only way they could expect to see their retirements funded without a bankruptcy. They'd be selling out their younger "brethren" of course, but since when have we seen such altruism among government workers?

18 posted on 01/29/2014 6:46:14 PM PST by Carry_Okie (0-Care IS Medicaid; they'll pull a sheet over your head and take everything you own to pay for it.)
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