And now to those of you sleeping too well, here are some facts that may help keep you awake a little better. The current Federal unfunded pension liability for Federal Government employees only---not taxpayers in general---is bigger than the social security deficit. It is 4.7 trillion dollars. The current social security unfunded liability is a mere 4.6 trillion dollars. There are no current plans to address it, in fact me, you now, and those who subscribe to some obscure government newsletter are the only ones who even seem to know about it.
I had to laugh when I saw the answer Dan Walters of the Sacramento Bee sent to me when I asked about our persistent State budget deficits, see if you can tell what I am talking about, Here is the question and answer which appeared in yesterdays Bee.
"March 26, 2007
Question: Dan, my impression is that there is a $6 billion budget "gap" which is really a deficit that has not been closed. I believe we have deficits from previous years that have not really been dealt with either. Is this true and do you know the total amount? Michael Haley, Napa
Answer: There is a persistent operating deficit roughly of the size you mention and both the administration and the Legislature's budget analyst say that it will continue at least for the remainder of this decade. Past deficits have been covered by borrowing either from private lenders or internally from restricted funds."
http://www.sacbee.com/static/weblogs/capitol/
I laughed at the phrase "restricted funds". They are stealing from accounts that are restricted for certain purposes. In Napa that happened with the farm worker housing fund, and some one or two got fired for it. In the State they call it "good government" or "balancing the books".
There is a huge unfunded liability for state pension and health plans, and according to the State Legislative Analyst it requires at least $6 billion a year that they are not paying in just to go into the investment fund, on top of each years bail out of current employees.
They have already borrowed $17.75 billion to shore it up, before 2003. I doubt the state budget analyst's prediction is going to come true, as we have borrowed more money to the point that we have tripled our debt in the last three years alone. We are not paying in, no way we are going to catch up by the end of this decade.
In the City of Napa, the portion of the budget that has gone to employee compensation has gone from 77% to 88% in three short years. Are we going to be at 99% in three more years? Will we have scores of well paid employees sitting in empty offices with no computers because there will be no money for anything but compensation?
Sounds absurd, and hopefully it is but the way that pension costs have been skyrocketing one wonders. We don't yet know the exact numbers for Napa County, other than two years ago it was 80% of costs, but we do know that even though pension consultants predicted bankruptcy for the State in 1999 when Grey Davis had CalPers give up to 90% of salary for safety employee pensions, in Napa some are not only getting 109% of their highest salary but are also coming back to work in other government jobs and collecting both retirement and another salary, usually as "consultants".
And here is the kicker. Our Assembly person, Noreen Evans, introduced a bill to raise the pensions for safety employees all the way up to 100% of their highest salary. What was even worse is that she also included changing the definition of what salary was to whatever the local government (read unions) wanted. This most certainly would have included anything remotely considered salary, overtime, uniform allowances, travel reimbursements, per diems, the baby, the bathwater, etc.
This was done in New York City, right before 9/11. The Firefighters there got the government to change the definition of what constituted salary to include overtime. Then 9/11 happened, and in one year 3200 Fireman retired at once, realizing that due to the overtime incurred, their retirements would never be bigger.
That is the big version of what happened in Napa in January of 2005 when due to increased retirement benefits, nine police officers retired at once. Right now Contra Costa County is five years from insolvency due to over generous pensions and health care. Right now they have about 8500 active employees, and over 5000 retired and on benefits. In four years they will have about 9000 on retirement. Think they can make it?
How many employees is Napa supporting on retirement now compared to how many are working? We need to find out.
Evans bill would have been a financial disaster, but it shows you who is running the state government, the public employee unions. Evans received a number of "what are you nuts?" letters and her bill did not reach a vote. She was, however, reportedly surprised by all the negative reaction. Scary, huh?
This situation is not going to change unless voters start to demand from the government that it change. Right now the public employee unions are running the government at all levels in California. So far the public has supported that, but I do not think the general public realizes how much tax money is going into these pensions and benefits, how really generous they are, and how out of balance it is with the compensation that private sector employees receive. In other words, they are napping, and they need to read articles like this to jolt them awake a bit.
Please help me start to push back against this so that in Napa we can start to have some money for something else, like parks, road improvements, flood control, more police, and other things that we cannot afford right now.
One last thought, Keith Caldwell, American Canyon Fire Chief who just retired, announced his intention to run for Supervisor today. Gary Simpson, former Sheriff has also announced. Both will not only receive full pension benefits, which will amount to 90% or more of a salary north of 150K, but also receive 70K a year as a supervisor. I intend to publicly ask them to forego one of those, because after all they won't really be retired if they continue to work for the county as a Supervisor. It will be double dipping.
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