◼ Controller John Chiang drops bombshell on California public pensions - Dan Walters/Sacramento Bee
State Controller John Chiang dropped a political bomb the other day, “unfunded liabilities” – the gap between assets and liabilities for current and future pensions – exploded from $6.3 billion in 2003 to $198.2 billion in 2013.
The unfunded liability problem hits cities the hardest because of their high payrolls. Many have seen their retirement tabs quadruple, such as the 2003-13 increase from $98 million a year to $375 million for Los Angeles’ city police and fire pensions.
Three California cities have declared bankruptcy in recent years, in large measure due to pension debts, and the judge in Stockton’s case declared those debts may be reduced in bankruptcy, although he didn’t compel Stockton to do so....
Fifteen years ago, in a spasm of abject irresponsibility, then-Gov. Gray Davis and the Legislature pumped up pension benefits for state employees on blithe, unsupported assurances from a union-friendly CalPERS board that high investment earnings, not taxpayers, would cover the cost. And many local governments blindly followed suit.
Davis was rewarding unions that helped him get elected in 1998. Now the piper must be paid, and the cost is very steep.
