Bankrupt city paying $204K per year in retirement for police chief who served for … eight months

posted at 12:21 pm on August 2, 2012 by Ed Morrissey

Want to know how California finds itself in debt at the state level by tens of billions each budget cycle?  Why three of their cities have already declared bankruptcy this year, and more may be on the way?  Here’s a cautionary tale from Stockton, one of the three Golden State cities to shield itself from its creditors this year, where they pay a retired police chief in pension slightly more than half of what the President of the United States makes.  That’s a fine reward for devoted service of … eight months?

Stockton, California, Police Chief Tom Morris was supposed to bring stability to law enforcement when he was appointed to the job four years ago.

He lasted eight months and left the now-bankrupt city at age 52 with an annual pension that pays more than $204,000 — the third of four chiefs who stayed in the position for less than three years and retired with an average of 92 percent of their final salaries.

Stockton, which filed for bankruptcy protection on June 28, is among California cities from the Mexican border to the San Francisco Bay confronting rising pension costs as they contend with growing unemployment and declining property- and sales-tax revenue. The pensions are the consequence of decisions made when stock markets were soaring, technology money flooded the state, and retirement funds were running surpluses.

Actually, it’s the consequence of the pension structure itself.  California, like most other states, use defined-benefit pensions for their public employees, rather than the defined-contribution plans used by almost everyone in the private sector.  The latter either utilizes a 401K plan or something similar, where both employees and employers deposit funds, which get invested over the time of service.  When employees retire, they own their own fund and draw off of it for their retirement income, which leaves no overhang of debt for the employer and gives the employee control over the investment strategies used.

The defined-benefit structure, on the other hand, guarantees certain levels of payment regardless of whether the retirement fund has actually performed to that level or whether the employer has made the requisite deposits.  The payout levels usually hinge on the average compensation paid during the final three to five years of service.  This structure lends itself to all sorts of mischief.  People work large amounts of paid overtime to pad the average and boost their retirement checks, for instance.  Employers defer plan payments in order to cover other spending, figuring that contemporary tax receipts will cover the eventual costs of retirement; that is why San Diego and San Jose were forced to offer referendums to revise their benefit plans, because those costs ate over 20% of the operating budgets of both cities.  Finally, that kind of retirement leads to very perverse outcomes for people who only work a short period of time, and who draw the same kind of pension as those who have worked for decades.

That’s also one of the main problems for San Bernardino, which declared bankruptcy last month:

San Bernardino, a city of 209,000 about 60 miles (100 kilometers) east of Los Angeles, is typical of the phenomenon. Its city council voted July 18 to approve an emergency bankruptcy filing, about six years after the panel unanimously lowered the retirement age for public-safety workers to 50 from 55.

The council acted in August 2006 even though Aon Plc, the city’s risk-management consultant, had warned it that such a change would add millions of dollars to San Bernardino’s long- term pension costs. In the fiscal year that ended in June, pensions consumed 13 percent of the city’s general fund, up from 9 percent in fiscal 2007.

Two of San Bernardino’s former police chiefs receive pensions above the $200K mark.  Keith Kilmer actually took another job — as interim police chief in Seal Beach.

Update: A reader objects to this post, as former chief Morris spent more than 30 years on the Stockton police force.  That doesn’t change the fact that he’s getting the pension for a chief after only eight months on the job, and that the pension for that position is more than half what we pay the President of the United States for actually being on the job.  In fact, the President “only” gets $191,300 in pension per year after retirement.


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California, like most other states, use defined-benefit pensions for their public employees, rather than the defined-benefit plans used by almost everyone in the private sector.

Should be “defined contribution plans”

BobMbx on August 2, 2012 at 12:24 PM

Actually, it’s the consequence of the pension structure itself. California, like most other states, use defined-benefit pensions for their public employees, rather than the defined-benefit plans used by almost everyone in the private sector

Ed,

Typo. I think you mean “defined-contribution”

WisRich on August 2, 2012 at 12:24 PM

California, like most other states, use defined-benefit pensions for their public employees, rather than the defined-benefit plans used by almost everyone in the private sector.

Are defined-benefit pensions different than defined-benefit plans, or is the second one supposed to be money-paid pension plans?

dcman98 on August 2, 2012 at 12:25 PM

Typo. I think you mean “defined-contribution”

WisRich on August 2, 2012 at 12:24 PM

Yup, saw that and just fixed it.

Ed Morrissey on August 2, 2012 at 12:25 PM

That is how you go bankrupt.

My own city, Huntington, WV is technically insolvent due to pensions. Unfortunately there isn’t any way to FORCE a city into bankruptcy so they are forced to use it to renegotiate pensions and union contracts. No, they are going to bankrupt the taxpayers and drive all business out of town first.

wildcat72 on August 2, 2012 at 12:25 PM

How do I get me some o’ dat?!

Akzed on August 2, 2012 at 12:27 PM

Simple solution: California can place a supertax all income from state and municipal pensions in excess of 250% of the median private sector annual income (which I believe is about $40,000 per year). So the first $100K would be taxed at normal rates. The excess would be taxed at oh . . . say 94%. Any money would be deposited towards the state pension fund. Or the retiree could voluntarily forgo any income in excess of 250% of median annual private sector income.

That would give municiple and state employees a reasonable retirement income (if you cannot live on $100K/yr in retirement, you need to tone down your lifestyle). Also it only applies to the public sector. Work for the government – accept limitations to income in exchange for security.

No Truce With Kings on August 2, 2012 at 12:30 PM

Republicans need to start running against BIG GOVERNMENT instead of DEMOCRATS. TV ads showing the above BS would hit a cord with most Americans.

brewcrew67 on August 2, 2012 at 12:30 PM

Retirement at 50 with 92% of salary just makes sense. Any fool can see that.

a capella on August 2, 2012 at 12:31 PM

What’s better than the trip facepalm is the girl’s expression in the next row

onetrickpony on August 2, 2012 at 12:31 PM

Welcome to my Left Wing Paradise.

peski on August 2, 2012 at 12:32 PM

A good friend of mine is one of the attorneys representing San Bernadino in the BK. It’s a freaking disaster. They don’t have enough $ to keep “essential services” (police and fire) running, even if they suspend all other payments.

peski on August 2, 2012 at 12:35 PM

This is like the city of Chicago rehiring a union rep for one day then giving him a full pension based on his years of union service and the state of Illinois giving full teacher pensions to a couple of union lobbyists who weren’t teachers but substituted for one day at a school and were allowed to apply their years of union employment towards the teacher pension. And the dumba$$ IL lawmakers allowed it to happen.

stukinIL4now on August 2, 2012 at 12:35 PM

Why the pic of the Duke men’s basketball coaching staff at a basketball game? Maybe the 53rd time you’ve used that picture?

michaelthomas on August 2, 2012 at 12:36 PM

What’s better than the trip facepalm is the girl’s expression in the next row

onetrickpony on August 2, 2012 at 12:31 PM

I think I’m in love with her.

CurtZHP on August 2, 2012 at 12:39 PM

Hey, I wanna be a police chief in California!

Yeah, I know–I don’t have any police experience, so you can fire me if I don’t perform. Still, it’s worth a try!

Steve Z on August 2, 2012 at 12:41 PM

Why the pic of the Duke men’s basketball coaching staff at a basketball game? Maybe the 53rd time you’ve used that picture?

michaelthomas on August 2, 2012 at 12:36 PM

It’s for their candid expressions. I laugh every time I see it.

RushBaby on August 2, 2012 at 12:41 PM

No…it’s all about this crazy chick.

Jaibones on August 2, 2012 at 12:43 PM

As for Tom Morris and the criminally stupid and/or corrupt Stockton board of managers, they should all be horse-whipped in the public square.

Jaibones on August 2, 2012 at 12:44 PM

Why the pic of the Duke men’s basketball coaching staff at a basketball game? Maybe the 53rd time you’ve used that picture?

michaelthomas on August 2, 2012 at 12:36 PM

Where else are you gonna find a picture of three (not one, not two, but THREE) facepalms, plus the bonus of the girl behind them with the classic Whiskey Tango Foxtrot look on her face?

CurtZHP on August 2, 2012 at 12:44 PM

Trouble is, the big shots like police chiefs and politicians always exempt themselves from any reform efforts.

It will happen again, believe me.

CA is doomed.

PattyJ on August 2, 2012 at 12:45 PM

Why the pic of the Duke men’s basketball coaching staff at a basketball game? Maybe the 53rd time you’ve used that picture?

michaelthomas on August 2, 2012 at 12:36 PM

Triple “Face Palm” with a look of Extreme Disgust from behind.

LoganSix on August 2, 2012 at 12:46 PM

No worries, the U. S. Postal service will not be able to deliver his checks….

RAGIN CAJUN on August 2, 2012 at 12:47 PM

Retirement at 50 with 92% of salary just makes sense. Any fool can see that.

a capella on August 2, 2012 at 12:31 PM

Exhibit A: Greece

BobMbx on August 2, 2012 at 12:48 PM

Bankrupt? Cool dude! Let’s share our bodies (either sex is OK) and a joint!

MaiDee on August 2, 2012 at 12:49 PM

…Delphi Corp retiree’s flocking to California…News at 11 !

KOOLAID2 on August 2, 2012 at 12:51 PM

There’s a word for this: idiocy.

crosspatch on August 2, 2012 at 12:52 PM

The rest of you are going to bail us out in CA…

… right?

/

Seven Percent Solution on August 2, 2012 at 12:54 PM

In California, it is really worse than the article suggests.

–Most pensions are based not on the average three or five final years compensation, but on the highest single year. This creates incentives for “spiking” the final years compensation by various artifices such as switching non cash benefits like health insurance and an official car to cash benefits like a “car allowance” and a “health care stipend”. Retirement contributions are not collected for non-cash benefits…so for an entire career the employee pays no retirement contribution on these benefits, but then collects a lifetime pension based upon them.

–in 1999, California and many of its Cities and Counties increased the retirement formula used to calculate pensions. These increases were made retroactively to include all the previous years of employment for employees. Public safety workers like the Police Chiefs cited in this article accrue 3% for each year of employment up to a maximum of 90% after 30 years of employment at age 50. Prior to 1999, most public safety workers earned 2% for each year of service, which could be increased to 2.5% for longevity for years worked past age 50.

–Many non-public safety worker positions, like billboard inspectors and milk inspectors have been upgraded to public safety pensions.

The result is a pension system, which in the words of the California Public Employees Retirement System’s (CalPERS) own actuary is “unsustainable”.

http://calpensions.com/2009/08/10/calpers-actuary-pension-costs-unsustainable/

Thankfully I am now retired (NOT on a California public pension) and can leave this mess to the people who keep re-electing the same California politicians who helped create this mess to office.

CalFed on August 2, 2012 at 12:55 PM

Why the pic of the Duke men’s basketball coaching staff at a basketball game? Maybe the 53rd time you’ve used that picture?
michaelthomas on August 2, 2012 at 12:36 PM

It’s the girl behind them – like the overly attached girlfriend meme, she’s the overly attached fan.

Marcola on August 2, 2012 at 12:57 PM

Ben Franklin said participatory democracies have always failed due the corruption of the citizens. Politicians are the manifestation of who they represent. We have found the enemy and it is us.

pc on August 2, 2012 at 1:05 PM

If we’re going to have “claw-back” provisions for Wall Street bonuses, let’s do the same for fat cat PEU pensions.

rbj on August 2, 2012 at 1:06 PM

It is time to switch ALL public employees from pension plans to
401(k)plans
(or other variations on defined contribution plans)!

And that includes Congress!

As an added bonus, getting rid of pension plans for public employees would get rid of the large pots of money that are used to fund pensions and the corruption that goes with the control of those pots of money.

wren on August 2, 2012 at 1:08 PM

No Truce With Kings on August 2, 2012 at 12:30 PM

Great plan. Good luck getting Governor Moonbeam and the DemoKleoptocrat legislature on board.

peski on August 2, 2012 at 1:08 PM

What’s better than the trip facepalm is the girl’s expression in the next row

onetrickpony on August 2, 2012 at 12:31 PM
I think I’m in love with her.

CurtZHP on August 2, 2012 at 12:39 PM

…check with lorien first…it may be too late…he may have already hit it!

KOOLAID2 on August 2, 2012 at 1:13 PM

California is surrounded by states that are in much better financial condition. Has California considered selling off some of their state to their neighbors? Anyone for San Diego AZ?

slickwillie2001 on August 2, 2012 at 1:13 PM

No Truce With Kings on August 2, 2012 at 12:30 PM

That might run afoul of a court decision that CA cannot tax retirement that is paid to retirees who live out-of-state.
A great many of our LE retirees manage to find themselves in places like Northern Idaho (Sandpoint and Couer d’Alene are favorites), or they move to states that have either no income tax (NV, TX, WA) or no sales-tax (OR).
Either way, once they are domiciled out of CA, the State has no claim upon their pensions; but, it would be an interesting court case.

Another Drew on August 2, 2012 at 1:13 PM

Full disclosure here. I am a beneficiary of the California Public Safety Public Employees Retirement System (CalPERS). I retired with the 3% at 50 pension. It’s not that cities like Stockton and San Bernadino pay their retired police and firefighters those pensions. I don’t get a dime from the City of Oakland. The pensions come from CalPERS, which is flush, or will be at least for the rest of my life. The problem is with the increasing contributions to CalPERS which the cities have to make, and their deferring thos payments into the system. This all came about because of liberal politicians at the state and municipal levels handing these benefits to the police and firefighters unions without question. I was never a union person or involved in union activities or negotiating, but when I turned 50 and saw what I was going to get paid for not working anymore, what was I supposed to do? Say no, that’s way too much money?

Trafalgar on August 2, 2012 at 1:15 PM

How do I get me some o’ dat?!

Akzed on August 2, 2012 at 12:27 PM

Simple answer::: Become a Democrat

nwsseeker on August 2, 2012 at 1:15 PM

Either way, once they are domiciled out of CA, the State has no claim upon their pensions; but, it would be an interesting court case.

Another Drew on August 2, 2012 at 1:13 PM

That’s why I moved out of California the day I retired. There’s no court case to be interesting. The courts have already ruled that California cannot impose income taxes on pensioners who live out of state.

Trafalgar on August 2, 2012 at 1:19 PM

How do I get me some o’ dat?!

Akzed on August 2, 2012 at 12:27 PM

Simple answer::: Become a Democrat

nwsseeker on August 2, 2012 at 1:15 PM

I’m as conservative Republican as they come. They didn’t like me in California, but they still had to pay me!

Trafalgar on August 2, 2012 at 1:20 PM

The result is a pension system, which in the words of the California Public Employees Retirement System’s (CalPERS) own actuary is “unsustainable”.

You betcha. My mom retired from working for Los Angeles County in ’89 after 20 years service, and still collecting retirement 23 years later, with several COLA raises.

The “unintended” consequences of people living much longer in retirement than they worked.

hawkeye54 on August 2, 2012 at 1:21 PM

The main problem is letting government decide what to pay itself.

Dusty on August 2, 2012 at 1:23 PM

The implication is that Morris showed up, worked 8 months, and walked away with a cool $200K/year pension … but that may not be accurate. According to this article, he joined the Stockton police force in 1972 and became an officer in 1979 – which may mean he spent 30 years climbing the ranks before being named Chief. He left after budget cuts caused a salary dispute in 2008. While it’s true that his pension is based upon his final salary (and he was only the Chief for 8 months), do we know that his salary after the promotion to Chief was significantly higher than his salary before? If it wasn’t, then the whole “8 months” part becomes irrelevant …

http://www.recordnet.com/apps/pbcs.dll/article?AID=/20081015/A_NEWS/810150340

TouchdownBuddha on August 2, 2012 at 1:35 PM

I’m sure we’re going to hear more about these kinds of insane, Greece-like pension schemes moving forward. I’ve heard rumors Compton and Fresno are both facing bankruptcies as well.

Doomberg on August 2, 2012 at 1:39 PM

I work for a actuarial firm that does the valuations for several California municipal retirement systems. I can guarantee that this was the result of something called “reciprocity”, where a policeman who accrued a pension with one city can take his years of service with him if he is hired by another. He didn’t get this for 8 months of work, he probably got this for 29 years of work with one police department and 1 year with another.

ATG on August 2, 2012 at 1:41 PM

TouchdownBuddha on August 2, 2012 at 1:35 PM

That’s true. The CalPERS Public Safety pension is based on 3% of your highest years salary (in the last 5 years) for every year you worked up to 90% of that salary. You also have the option to “buy back” up to four years of military service to add to your total service (and it’s an expensive buy-back). So, in my case, I worked in Oakland for 23 years, only 4 of which were the highest rank I attained. I bought back 4 years of my army service, giving me a total of 27 years of pensionable service. 27 years X 3%/year = 81% of my highest years salary. I’m not saying it’s justified, but there was 27 years of hard work involved.

Trafalgar on August 2, 2012 at 1:47 PM

ATG on August 2, 2012 at 1:41 PM

Exactly right, and that’s because it’s a state pension system, not each miniciplaty having it’s own. So as long as you’re working as a police officer in California, you take your retirement with you wherever you go. Los Angeles P.D. used to have its own retirement system (which was even more lucrative), not sure if they still do or if they’re under CalPERS now.

Trafalgar on August 2, 2012 at 1:50 PM

check with lorien first…it may be too late…he may have already hit it!

KOOLAID2 on August 2, 2012 at 1:13 PM

Word

BobMbx on August 2, 2012 at 1:52 PM

…check with lorien first…it may be too late…he may have already hit it!

KOOLAID2 on August 2, 2012 at 1:13 PM

Word

BobMbx on August 2, 2012 at 1:53 PM

The November 2010 election results indisputably, unquestionably helped make california the most disgusting, pathetic state in the nation. Not only did lunatic-left d-cRAT socialists win essential EVERY race in the state, the slugs, slackers, deadbeats, liars, freeloaders, losers, taxpayer-leeches, cheats, ILLEGALS, potheads and Hollyweird degenerate voters, all stoned on “medical” pot, EVEN RE-ELECTED A DEAD d-cRAT to the legislature! (There were some pathetic, low-IQ, slow-learner types at the Red State blog who actually though that some of the RINO candidates could win – but no mentally capable person believed them.) They also voted to keep the lunatic-left job-killing extremist CAP-AND-TAX law promoted by the eco-nuts and the d-cRAT socialists, in spite of the fact that califonia has one of the highest unemployment rates in the nation. (Why work when you can get generous, unlimited welfare from the state?) In fact, the voters are clearly so stoned out of their minds that the fact that these same d-cRAT socialists have morally, ethically, socially, politically AND fiscally bankrupted the state doesn’t matter to them in the slightest! It’s just “Party On, Dudes!”

The only hope for the rest of America is that some way is found to remove the people’s republic of california from our constitutional democracy. Let’s all pray for “The Big One”.

What do you call repeating the same mistakes over and over again but expecting a better result?
–1 California, 2 Insanity.

TeaPartyNation on August 2, 2012 at 2:06 PM

This is a great idea.

And we all know how liberals love progressive tax rates.

Simple solution: California can place a supertax all income from state and municipal pensions in excess of 250% of the median private sector annual income (which I believe is about $40,000 per year). So the first $100K would be taxed at normal rates. The excess would be taxed at oh . . . say 94%. Any money would be deposited towards the state pension fund. Or the retiree could voluntarily forgo any income in excess of 250% of median annual private sector income.

Labamigo on August 2, 2012 at 2:08 PM

There are a lot of people who got contracts long ago that said they could retire at 55. But today most will not collect Social Security until 68. Many government workers retire, get the pay and take another job.

No one should receive any government pension until they are 68 years old, I don’t care how you have to fix it, let those who prove they are disabled collect early, but it was wrong to begin with to tell someone they could retire on a government pension at 55 when SS was 65. AND

A police chief or a clerk should get the same government pension, whatever the CLERK is entitled to, not more for playing games with years and rates and steps and 3 highest paid months or years or whatever.

It never was right to promise such a thing. It never was honest. It was all political favors that were corrupt.

Fleuries on August 2, 2012 at 2:25 PM

Because of the presumptive laws that shield pubic safety retirees, that almost any condition/disability is service connected, it would be interesting to see what % disabled the chief is and how much of his windfall retirement is tax free? Bet it’s over 50%.

StevC on August 2, 2012 at 2:39 PM

It is coming home to roost in my state. I will. E I teresti g to see how the PEU’s respond when there just isn’t any money. The pension funds are broke and requiring the tax payer intervention.
http://civfi.com/2012/05/18/why-californias-government-worker-pensions-are-bankrupt/

uncommon sense on August 2, 2012 at 2:58 PM

Sorry for the typos above, it is difficult to get everything right on an iPhone :-) Should have been “it will be interesting”

uncommon sense on August 2, 2012 at 3:02 PM

Vallejo was the first to go Chap9, but hardly gets mentioned. They tend to pull the same trick, the City Manager gets a big salary and a golden retirement, usually after about a year.

mojo on August 2, 2012 at 3:13 PM

The pensions come from CalPERS, which is flush, or will be at least for the rest of my life.

Trafalgar on August 2, 2012 at 1:15 PM

Calpers is not going to last for the rest of anyones life. Calpers will be eliminated in the near future. Their useless 1% rate of return is EXACTLY what can be expected from this corrupt UNION/POLITICIAN fiasco.

Look for ALL of these PHONY CORRUPT CONTRACTS to be set aside by either the courts of the people in the very near future. Calpers is already ADMITTING to being HUNDREDS of BILLIONS short. It is simply impossible for this crooked deal to continue. And yes, I do think that EVERY PUBLIC SECTOR UNION member is a CROOKED thug STEALING from everyone they can find!!

Freddy on August 2, 2012 at 3:26 PM

Love the story photo of Coach K and his bench…know it’s not a political shot, but also know that I root for the team in lighter blue just down Hwy 15/501 from Duke’s Cameron Indoor Gym.

GuitarSlinger on August 2, 2012 at 3:37 PM

Of course, this pension is idiotic. But California could actually pay for its excesses if it weren’t putting the hurt on commerce.

California would be drowning in revenue if it allowed offshore drilling and the exploitation of the state’s colossal reserves of oil shale. California has the biggest such reserves in Nortb America! Bet you didn’t know that. No one can get at it because the state sides with every lawsuit from the eco-nazis.

Most at Hot Gas know California has been colluding with the feds to impose an artificial drought on the Central Valley, where farmers have been going under by the dozen, and the tax base has plummeted. There’s plenty of water in the reservoirs. This is a man-made drought, imposed by enviro-morons who think “irrigation” is the eighth deadly sin.

Regulations of all kinds are slaying small businesses right and left. Taxes are driving big businesses out. Whole fleets of trucks are no longer operating in California. No taxes are being paid by the unemployed who’ve had to flee and leave their foreclosed homes sitting empty.

California is killing itself with regulations, prohibitions, and taxes. You can have those things, OR you can have big pensions for your public workers. One or the other: big tax base and big pensions, OR killer regulation and bankruptcy. You can’t have both. One or the other.

J.E. Dyer on August 2, 2012 at 3:58 PM

I have a neighbor that collects $400/month from her grandmother’s pension. The grandmother retired from a school district in or near LA after working as a cafeteria worker for about 25 years. Granny changed her designated beneficiary to her grand daughter to maximize the payout which has amounted to more than $110,000 to my neighbor since her grandmother died.

And my neighbor has never spent more than a week in California in her entire life.

DanMan on August 2, 2012 at 4:43 PM

This seems to go WAY beyond just a defined pension. My last place of employment switched from pension to contribution plan when I was hired (missed the pension).

There was a minimum number of years required to get the pension, then it went up based on years of service.

How did this yutz get ANY pension after only 8 months?

dominigan on August 2, 2012 at 4:50 PM

J.E.
I would agree with you on our states economic woes, but it still doesn’t address the fact that none of these people deserve a retirement that ridiculous, come on 90%???. Even under a thriving economy, this type of shadow workforce, that produces nothing, would still bring the system down over time. We are just lucky that it will hit the brick wall sooner, because our state is bankrupt.

uncommon sense on August 2, 2012 at 4:55 PM

uncommon sense on August 2, 2012 at 4:55 PM

No, it doesn’t address what they “deserve.” But what they “deserve” isn’t a fiscal issue, and that’s what I meant to address.

There’s what people “deserve,” which is a matter of opinion, and there’s what a state or city can afford, which is less debatable. Thinking in the latter terms is what has been missing for so long in much of California. But thinking about what we can afford is a two-sided coin, and the side that always gets ignored is expanding the revenue base.

I consider it far, far, far more important to focus on expanding the revenue base — by releasing the government’s grips on the economy — than on ritual public hangings over the size of pensions. The real problem in California is that the golden-egg-laying goose — the private economy — is staked to an anthill and being eaten alive.

If California doesn’t lighten the regulatory load, and cease killing commerce and production with demented eco-worship, it won’t matter what public workers are paid or what pensions they get, because none of them will get anything. And the citizens won’t get the things we have the most right to expect from the government, such as police and fire services.

J.E. Dyer on August 2, 2012 at 8:39 PM

The pensions come from CalPERS, which is flush, or will be at least for the rest of my life.

Trafalgar on August 2, 2012 at 1:15 PM

Trafalgar…this is not exactly correct. While Oakland participates in CalPers, ultimately Oakland is responsible for providing the funds that CalPers pays out.

Oakland currently has a 1.3 billion dollar unfunded CalPERS
liability. In other words, The Oakland City CalPERS Pension account is unfunded by $1.3 billion. That is an obligation of the City of Oakland, not a general obligation of the CalPers system. If Oakland fails to pay up, I’m not sure what will happen, but I’m pretty certain that the rest of us poor saps will not have to cover Oakland’s failure to have contributed enough to pay your pension.

CalFed on August 3, 2012 at 12:33 AM

The Oakland City CalPERS Pension account is unfunded by $1.3 billion.

Meant to say, “underfunded by $1.3 billion”

Trafalgar, not to take a swipe at you, but when you started your career, was the pension calculation considerably less generous than the one that you ultimately retired on? When the calculation was changed, wasn’t it made retroactive for all your years of service…even the ones that were worked under the less generous formula?

I realize that you had no say in the calculation used and am not blaming you, but in my opinion to have made the formula change in the first place was dumb…and to have made it retroactive for all years worked was criminally insane.

CalFed on August 3, 2012 at 12:54 AM

I consider it far, far, far more important to focus on expanding the revenue base — by releasing the government’s grips on the economy — than on ritual public hangings over the size of pensions. The real problem in California is that the golden-egg-laying goose — the private economy — is staked to an anthill and being eaten alive.

J.E. Dyer on August 2, 2012 at 8:39 PM

JE, California undoubtedly would be better off if it was more business-friendly, but to ignore the costs of pensions and to blindly assert that they could easily be funded if the economy were in better shape assumes facts not in evidence.

First, the cost of public pensions is a problem in many states…even those with a business friendlier climate and less generous public pensions. I do not think you grasp the size of the problem if you truly believe that things would be rosy in California if only the economy was better. It would help, but the California public-pension burden is staggering and becoming more so.

Second, California has a track record of spending wildly when times are good and of being unable to throttle back when they are not so good. If the economy was better, I suspect that the public employee unions would simply be milking the system for even more.

CalFed on August 3, 2012 at 1:07 AM

No Truce With Kings on August 2, 2012 at 12:30 PM

Outstanding idea! It is based on leftist ideals of fairness, you’ve made enough, spreading the wealth, etc. And, it actually helps with the problem by addressing those benefiting from the problem.

+1!

GWB on August 3, 2012 at 11:02 AM