A test for state’s untouchable pensions | PressDemocrat.com

A test for state’s untouchable pensions
Stockton, on verge of bankruptcy, running up against the 800-pound gorilla known as CalPERS
By MARY WILLIAMS WALSH
NEW YORK TIMES
Published: Sunday, March 18, 2012 at 4:03 a.m.
Last Modified: Sunday, March 18, 2012 at 4:03 a.m.

When the city manager of troubled Stockton had to tell City Council members why it was on track to become the biggest U.S. city yet to go bankrupt, it took hours to get through the list.

There was the free health care for retirees, the unpaid parking tickets, the revenue bonds without enough revenue to pay them. On it went, a grim drumbeat of practically every fiscal malady imaginable, except an obvious one: municipal pensions.

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A test for state’s untouchable pensions Stockton, on verge of bankruptcy, running up against the 800-pound gorilla known as CalPERS

Some public pension experts think they know why pensions were not on the city manager’s list. They see the hidden hand of California’s giant state pension system, known as Cal-PERS, which administers hundreds of billions of dollars in retirement obligations for municipalities across the state.

CalPERS does not want cities like Stockton going back on their promises, and it argues that the state Constitution bars any reduction in pensions — and not just for people who have already retired. State law also forbids cuts in the pensions that today’s public workers expect to earn in the future, CalPERS says, even in cases of severe fiscal distress. Workers at companies have no comparable protection.  (Click here to read the article)

California college students protesting budget cuts miss the mark

According to Stanford and California Common Sense studies, over the past 12 years state spending on higher education has increased just 30 percent. Spending on the retirement benefits for government employees has grown more than 10 times as fast, tripling, and spending on prisons has more than doubled. The message is clear: Despite revenue growth, cash has not gone to fund higher education. So on this the students are right.

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