Seeking
to divert attention from its billion dollar losses and huge unfunded
liabilities, this week CalPERS released its own study of the fund’s economic
impact seeking credit for the $26 billion in economic activity generated by its
expensive and generous retirement benefits.
Of course the economic impact
would be exactly the same if General Motors, Boeing or IBM sent the same $12
billion in payments out of a $230 billion pension fund, so there is no credit
to be earned for merely sending out government checks.
Indeed, the
downstream recipients do not care if the money their customers use came from a
public pension fund, a child’s lemonade stand or a jar buried in the back yard. Not surprisingly, the CalPERS sponsored study
glosses over the fact that most of the money they distribute actually comes
from taxpayers, either as employer contributions to the program or as
additional payments imposed to cover staggering pension debts.
These
days across California, employee contributions to public pension costs range
from commonly nothing, up to occasionally 35%, making most of the money in the state
and local government funds the returns on taxpayer contributions. In addition, CalPERS imposes a surcharge on
government agencies to pay for its stock market losses, spectacularly failed
real estate investments and reports on its corrupt former board members and
executives. Taxpayers will be paying
these surcharges for more than 30 years, spreading those costs and huge losses
over two generations of taxpayers.
So while
CalPERS vainly tries to convince Californians they are helping the economy,
their increasing demands for tax dollars is gobbling up the money we need to
fund our schools, build our roads, keep our parks open and our fire stations
fully staffed. Growth in government
pension costs is also adding pressure to raise taxes at the state and local
levels. Those things are nothing to be
proud of. Though you have got to give
CalPERS some credit for trying to put a happy face on end-stage budget cancer.
California
Pension Reform is preparing a statewide initiative for the November 2012 ballot
that would cap state and local pension costs at private sector levels, keep new
employees out of retirement plans that generate debts and require pension
boards such as CalPERS to have a majority of qualified, independent members. After watching Governor Brown and the
union-controlled Democrats dismiss the substantial pension reform proposal
offered by the Senate Republicans during last month’s budget negotiations, it
is clear California voters must step in and cap pension costs at a level they
can afford.