California’s Governors Should Send Their Kids To Public Schools
Citizens feel confident President Obama would never move himself and his family to another country for their safety. National security is the #1 presidential responsibility. Citizens expect presidents to experience the consequences of their leadership in that regard. In California, K-12 education is the #1 gubernatorial responsibility. It’s the first and largest category in the Governor’s […]
The Ultimate Recipients of California’s State Spending
California’s General Fund will spend $122 billion this fiscal year. The state budget illustrates that spending in the following manner: But that chart doesn’t show WHO pockets that money. Looked at that way:
Big Changes in California’s Spending
A review of California’s 2016–17 state budget yields a new pattern as spending surges on retirement and Medicaid (Medi-Cal) costs. Budget shares have changed dramatically since 2010–11: Much has been written about the spending surge on pensions and OPEB (retiree healthcare) but little has been written about the surge in spending on Medi-Cal, a voucher-style […]
Pensions: How To Earn 7.8% for 20 Years But Be Short $100 Billion
Board members at CalPERS and other public pension funds often mislead citizens about the reasons for rising pension costs and worsening Funded Ratios (the ratio of pension liabilities to pension assets) but the principal reason is surging liabilities. In 1995 CalPERS reported a Funded Ratio of 96%. Over the next 20 years it earned a […]
The Consequences of Weak Pension Earnings
Several reporters have asked about the consequences of CalPERS’s weak investment earnings. Although CalPERS has not issued an actuarial report since June 30, 2014, one can draw an inference that its Unfunded Liability has grown about $50 billion since then, to $140 billion. Here is how you get there: Start from this chart on page […]
Protecting CA Students From Pension Costs
“The secret to stellar grades and thriving students is teachers,” writes The Economist in a recent editorial. One study cited by the magazine found that “in a single year’s teaching the top 10% of teachers impart three times as much learning to their pupils as the worst 10% do” and another “estimates that if African-American children were taught […]
Prison Guards 3, Parks and Kids 0
If ever you wondered about the importance of elections to the California State Legislature, read below. While the legislature considers yet another compensation increase for state prison guards, a state commission considers imposing a new charge on visitors to state beaches to make up for cuts to the state parks budget. I.e., the California Legislature […]
What Accrual Accounting Would’ve Exposed
Nothing has the power of accrual accounting to unmask and curtail reckless fiscal behavior by elected officials. As one example, accrual could’ve stopped the largest non-voter-approved debt issuance in California history. That happened in 1999, when legislation proposing a retroactive pension increase for state employees was introduced in the California Legislature. Accrual accounting would’ve forced state officials to acknowledge a […]
More Truthiness From CalSTRS’s CEO
In 2005 Stephen Colbert coined the word “truthiness” to describe “truths we want to exist.” His invention was timely because at that moment I was contending with truthiness as practiced by the California State Teachers Retirement System (CalSTRS), to whose board I had been appointed that year. I discovered the organization was understating pension liabilities […]
Jerry Brown’s Excellent Budget — At Least On a Cash Basis
Last week Governor Jerry Brown continued his steady stewardship of state finances by proposing a budget for the 2016–17 fiscal year that restrains spending despite hefty projected revenue growth. Brown once again reminded observers that healthy revenues today are likely to turn infirm tomorrow because of the state’s reliance on capital gains and that officials should plan accordingly. For […]