I brought up the disappointing CalPERS performance on the Senate Floor last month, when I expressed my opposition to the State Budget bill on June 15th (see http://district37.cssrc.us/content/senator-moorlachs-warning-state-budget). I was hoping the net return for the last fiscal year would again be 2.4 percent, although I was sensing it would be closer to zero.
The Fox & Hounds piece, the first below, expresses what many shared with me as I was making calls to personally invite as many friends and supporters as possible to tonight’s "Teddy Roosevelt" event (see the invitation below).
The agenda item on modifying term limits was continued at yesterday’s Board of Supervisors’ meeting and it is covered by MyNewsLA in the second piece below.
Believe it or not, these two subjects are related. Some Supervisorial candidates accept public employee union contributions, endorsements, and independent expenditures. Even in Orange County, the unions have a significant toehold. Keeping terms shorter, thus allowing Supervisors to avoid considering the long-term impacts of their fiscal decisions in bargaining unit negotiations, has been the cause of what will be the next "Citronesque" fiscal debacle. I’ll try to leave it at that, but you may want to reread MOORLACH UPDATE — Seeking Independence — July 3, 2015 july 3, 2015 john moorlach.
By David KerstenKersten Institute for Governance and Public Policy
Orange County Register reporter Teri Sforza quietly released a story that blows the whistle on another fiscal bombshell of bad news at the California Public Employees’ Retirement System (CalPERS).
The story states that according to unofficial preliminary numbers from CalPERS the fund lost about 2% of its market value in the 2015-16 fiscal year that just ended–which represents an estimated $28.5 billion increase in the fund’s unfunded liabilities, according to my rough calculations.
The fund assumes a 7.5% per year annual return despite the fact that no investment officer in the country believes that is achievable in the current environment.
Stanford Professor Joe Nation estimates CalPER’s total unfunded liabilities have increased to an estimated $150 billion, compared to $93 billion just two years ago, according to the Orange County Register report.
And if one assumes a more realistic 4% rate of return (a “Treasury” or “risk-free” rate) the funded liability for Calpers alone is now $412 billion, or the equivalent of three state general fund budgets, Nation said.
For anybody who knows the numbers, and I do, CalPERS is speeding down the track toward financial catastrophe but none of the state’s leading Democrats will even acknowledge that there is a major problem here.
And this ignorance of the problem by California Democrat politicians is perhaps what is most upsetting to me and the small community of pension reform advocates that fully understand the magnitude of the problem and what this means for the state’s future.
The lone voice in the legislature for reform continues to be Sen. John Moorlach (R-Costa Mesa) who has a significant background in public finance and accounting.
“What has me baffled is that this is causing me great anxiety, but it does not seem to have the same impact on my colleagues in Sacramento,” Moorlach said.
Inside sources say most if not all California Republican State Legislators in Sacramento understand the magnitude of the problem but there is not much to be gained politically by going out on the issue prior to a critical mass being reached for reform.
The true culprit for this code of silence in the Legislature is the state’s powerful public employee unions, their political threats, failed logic, and propaganda on the issue.
Dave Low, chairman of Californians for Retirement Security, says the pension reformers are a case of “crying like Chicken Little about how the sky is falling,” according to the Orange County Register report.
Low and the state’s public employee union bosses are playing a dangerous game here that will inevitably blow up in their face and result in major financial hardship, lost benefits, and jobs for their public employees at some point in the not so distant future.
Low won’t even acknowledge a problem with the escalating liabilities, and this is the same position taken by the California Democrat Legislature.
This is an unconscionable policy position to anyone who cares about the future of our state and illustrates why the California Democrat Party is no longer fit to lead California.
California Democrat politicians are too tied to their base which is the public employee unions, and are unable to make decisions that will benefit the state’s future and prevent financial catastrophe.
This whole facade is rapidly deteriorating and the problem will soon become so big that nobody will be able to ignore it.
The only question, is whether it will be too late to save the State of California and its local governments from financial disaster at this point, or whether we will first cross a point of no return that permanently saddles our public agencies and state taxpayers with trillions of dollars in debt that we cannot afford to pay.
David Kersten is an expert on fiscal issues and teaches a masters’ course on public budgeting for the University of San Francisco.
OC Supervisor Nelson defends term limits proposal
POSTED BY HOA QUACH
Orange County Supervisor Shawn Nelson Tuesday defended his proposal to ask voters to approve a change to the county’s charter that would allow supervisors to serve three consecutive terms before leaving the office.
Nelson placed the issue on the agenda of today’s board meeting, but it was postponed until a later meeting because officials are still researching if past service can be counted against any incumbents such as Supervisor Todd Spitzer, who is on a second tour of duty on the board having first served on the board from 1997-2002. He was elected again to the board and started another term in 2013.
Jon Fleischman, president of the California Term Limits organization, criticized how the proposal was placed on a supplemental agenda for today’s board meeting “without substantial public discourse” beforehand.
Fleischman also objected to the supervisors getting three terms.
“We believe that two terms is better than three terms because we believe by that third term you start to detach from public life,” Fleischman said.
While it was “not ideal” to let supervisors get termed out and return after sitting out for some time, as Spitzer has done, “it’s preferable to three (consecutive) terms,” Fleischman said.
“If this is placed on the ballot we will oppose it,” Fleischman warned the supervisors. “And we will make a big deal out of it. We think it’s a bad idea.”
Nelson said he placed it on the agenda at the request of state Sen. John Moorlach, who first proposed the idea.
Nelson said the “loophole” that allows elected officials to be termed out after being re-elected, but then allows them to run again, ought to be closed because it violates the spirit of term limits that voters have approved.
“I think there should be a lifetime ban” after the three terms, Nelson said. “When people voted for term limits we understood it to be a lifetime ban.”
And 12 years appears to be the best way to do it, Nelson said.
“I think three terms is the appropriate amount, not because I served two,” Nelson said. “I’m planning on running for something else, if anything.”
Nelson said he is planning to run for judge.
Twelve years is enough time for an elected leader to get experience to participate in all of the committees and other agencies that go along with being supervisor, such as work on the Orange County Transportation Authority board, Nelson said.
“I think term limits are a pretty good idea and they should be for life, and a reasonable time — not too long and not too short,” Nelson said.
–City News Service
You’re Invited to a Moorlach for Senate 2016 Fundraiser
WHEN: Wednesday, July 13th — 5:30 – 7:30 PM
WHERE: Pacific Club — 4110 MacArthur Blvd, Newport Beach
SPECIAL GUESTS: Chris Epting – Author of "Teddy Roosevelt In California — The Whistle Stop Tour That Changed America" and Shaun MacGillivray — Producer of The IMAX Movie "National Park Adventure"
Celebrating the Centennial of the National Parks Service
OPPORTUNITIES: Individual Tickets: $250, Co-Host: $4.200, Gold Sponsor: $2,000, Silver Sponsor: $1,000, and Bronze Sponsor: $500
RSVP: David – david
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