Friends with Benefits - Part 21 This would be funny....

This would be funny if it weren't so sad.  The San Mateo Mercury Times somehow found an administrative assistant in the SJ school district's special ed department to write an OpEd claiming "Californians have had enough of pension reform".  The piece is so lightweight I thought my paper was going to float up to the ceiling as I read it.  First, the author--one Donna D'Arcy claims

Legislators may have lost their appetite for using pensions as a scapegoat for budget woes.

That's funny on its face since it isn't apparent legislators outside of the locals in San Jose and San Diego have done ANYTHING about pension reform except to watch the tidal wave of cash that crushed Prop 32.  You can read up on the problem here, here and here.  D'Arcy goes on to claim

Critics also were quieted by the California Public Employees Retirement System's announcement that its investments earned 13.3 percent in 2012. Over the long-term, that number is even bigger, showing that California's pension system is strong.

That last bit about "that number is even bigger" begs a footnote.  Really?  Where is she getting that and what selective bit of data is she hiding behind?  The suffocating future pension liabilities are well-documented.

But the most egregious part is the idea that Californians have had enough of reform.  D'Arcy should go look at the polls and the few elections that aren't swayed by forced union dues money.  She can also take a look at the Seventh Circuit Court ruling last Friday that reaffirmed the reforms in Wisconsin.  The article would be funny--if it weren't so sad.

Comments

[Joe]

...and one more thing from this OpEd. D'Arcy writes:

California voters have had enough of politicians attacking police officers, firefighters, teachers and other public employees. They realize that these working class public servants are not to blame for budget problems.

She completely misses the point while she is applying a head fake to the reader. A house-of-cards pension plan is no pension plan at all and doesn't do the police or firefighters who are on the job Right Now any favors.

[Pam]

I agree but people need to understand that it's no different for the rest of us either. Socualy security is an even bigger house of cards and most of the people in Burlingame are considered rich by a lot of the country and will be excluded from ever getting what ever scraps are left from social security in 10 or 20 years so we are in the same boat as the police and firefighters.

[Joe]

I wasn't going to beat this dead horse anymore, but the WSJ just handed me the rest of story on the front page:

AUSTIN, Texas—On the 13th floor of a sleek downtown office building here, the trading desks are manned overnight. The chief investment officer favors cowboy boots made of elephant skin. And when a bet pays off, even the secretaries can be entitled to bonuses.

The office's occupant isn't a highflying hedge fund but the Teacher Retirement System of Texas, a public pension fund with 1.3 million members including schoolteachers, bus drivers and cafeteria workers across the state.

It is a sign of the times. Numerous pension funds are still struggling to make up investment losses from the financial crisis. Rather than reduce risks in the wake of those declines, many are getting aggressive. They are loading up on private equity and other nontraditional investments that promise high, steady returns in the face of low interest rates and a volatile stock market. .......

In some states, like California, failure to hit the target return puts taxpayers on the line to make up the difference.

California's giant public employee pension fund, Calpers, had made an aggressive push into alternative investments such as real estate, representing about one-tenth of its assets. But many of those real-estate holdings, particularly in housing, suffered big losses during the financial crisis.

[Joe]

From the SacBee's editorial:

In recent months, the state, school districts and many local governments have been basking in the warmth of a slightly improved economy and new revenues from voter-approved tax hikes.
They need to brace themselves. A fiscal cold front is on its way in the form of huge pension cost hikes.
The California Public Employees' Retirement System board is set to vote Tuesday on recommended accounting changes that would raise employer pension contribution rates by 20 percent on average over the next six years. Added to pension rate increases already scheduled, school districts and state and local governments could be hit with pension cost hikes of between 40 and 50 percent by 2020. For the state of California alone, pension contributions for state workers and non-teacher school employees would climb from $5.1 billion to $7.4 billion.

Read more here: http://www.sacbee.com/2013/04/13/5338325/day-of-reckoning-is-coming-for.html#storylink=cpy

[pat giorni]

Hike needed to pay for Stockton's bankruptcy??