A Teachable Pension Math Moment

David Crane
Lecturer and Research Scholar at Stanford University and President of Govern for California

The California Public Employees’ Retirement System reported excellent earnings for its 2016–17 fiscal year, earning 11.2 percent. Yet CalPERS’s Funded Ratio (the ratio of assets set aside to meet pension liabilities owed by governments) improved only three percentage points, from 65 percent to 68 percent. In other words, an extraordinary investment return 60 percent greater than the […]

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The Great California Classroom Robbery

David Crane
Lecturer and Research Scholar at Stanford University and President of Govern for California

Despite historic revenue gains, California’s public schools are in financial trouble. While California’s public schools often suffer financial distress during recessions, their current plight is alarmingly taking place during an economic recovery and after a large tax increase. The principal cause is exploding spending on pension and retiree health care obligations. State funding for schools […]

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Jerry Brown’s Big Skim

David Crane
Lecturer and Research Scholar at Stanford University and President of Govern for California

Governor Jerry Brown and the California Legislature have approved a scheme under which a special state fund filled with citizen-paid fees will lend money to the state General Fund, which in turn will contribute the proceeds to a state pension fund that in turn will invest in stocks in the hope of generating profits to […]

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One Last Plea to Stop the Pension Loan

David Crane
Lecturer and Research Scholar at Stanford University and President of Govern for California

Dear Legislators: In my essay the other day I provided an alternative to Governor Brown’s pension loan — actually pay down pension debt. You could do that by offering to redeem future pension payments for cash today. Provided the amount you pay is no greater than the present value of those future pension payments using the discount rate CalPERS […]

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What Awaits California’s Next Governor

David Crane
Lecturer and Research Scholar at Stanford University and President of Govern for California

California’s economy rises and falls with the national economy: Governors have little to do with those waves but their approval ratings ride right alongside. Pete Wilson wasn’t touted as presidential material until the economy improved in the 1990’s. Gray Davis rode the dot-com boom to high approval ratings until the 2001 dot-com crash. As housing […]

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The Real Reason Behind The CA Single Payer Proposal

David Crane
Lecturer and Research Scholar at Stanford University and President of Govern for California

Hint: It’s not about health This past weekend the California Democratic Party of which I am a member held a state convention riven by the election of a new chairman. Behind that was a battle over a proposal to enact “Single Payer” (SP) health care financing in California. Behind that is a power play about money. […]

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Pension Loan would Cover Up Wealth Transfers to Employees

David Crane
Lecturer and Research Scholar at Stanford University and President of Govern for California

California proposes to issue a pension obligation bond to finance extra contributions to the state pension fund, CalPERS. It would also cover up wealth transfers from citizens to state employees. Here’s how it works: When pension promises are made by the state to its employees, both the state and employees incur costs (“Normal Costs”) in the form of contributions […]

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State budget more vulnerable than ever to stock market decline

David Crane
Lecturer and Research Scholar at Stanford University and President of Govern for California

Take a look at California’s General Fund revenues over the last twenty years: Schedule 2, 2017–18 Governor’s Revised Budget Zero in on 2000-03. Notice how revenues peaked at $76 billion in 2000 and then fell below that level for three years. Aggregate revenues over those three years fell $30 billion short of the revenues the state would’ve collected had they continued […]

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CDA CMA CNA CHA CTA SEIU CCPOA: Gibberish to you but not to candidates for CA governor.

David Crane
Lecturer and Research Scholar at Stanford University and President of Govern for California

Ask the average Californian what those acronyms stand for and you’ll draw a blank stare. Ask a candidate for governor and they’ll snap to attention. Those acronyms are associations (see * below) representing the largest recipients of state spending and the beneficiaries of state laws shielding them from accountability or competition. The health, safety and teaching […]

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CA Legislature Must Stop Bullying UC

David Crane
Lecturer and Research Scholar at Stanford University and President of Govern for California

As the State Legislature holds a hearing about the University of California, consider the following: UC will collect $3.5 billion from the state this year, just six percent more than a decade ago. Since 2010, state spending on UC is up just two-thirds of the growth rate of state revenues and just a fraction of […]

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