◼ That’s a frightening statistic David Crane, a former economic adviser to Governor Arnold Schwarzenegger, cites in a useful Bloomberg View column on the huge gaps in funding for California’s teacher pensions. - Patrick Brennan/National Review
The pension system, CalSTRS, is currently about 70 percent funded, meaning that it has assets that, if projections prove correct, can cover 70 percent of projected payments — the 30 percent that’s unfunded is growing by $22 million a day, or $255 a second.
An unfunded liability, like what the state of California has to the CalSTRS system, isn’t the exact same thing as the normal debt that the state of California carries, but it’s a liability that’s almost as worrisome....
That debt has grown an impressive $25 billion since Governor Jerry Brown took office in 2011. He hasn’t spent one penny on reducing the funding gap — the hook for Crane’s column is that the state assembly’s speaker, Democrat John Perez, has said that California lawmakers need to get cracking on this problem. (To be specific, the unfunded liability is the gap between the payments local governments, community colleges, and teachers themselves have been required by statute to make and the benefits that they’re owed — the state, as sponsor of the pension plan, is the entity legally responsible for filling it.)
Otherwise, it just keeps growing, like “a gigantic financial tapeworm” — the way Warren Buffett’s 2013 investor letter described America’s public-pension problem.
