Milestones
By Miles H. Barber

Silence on a critical issue is a statement of allowance which, if ignored, gives permission for the issue to grow into an irreparable crisis.

This is the where we find ourselves in regards to our public pension programs in California and why our credit rating is the worst in the Nation.

Few legislators are talking seriously about the severity of the issue. One third of our state deficit is a result of taxpayer dollars being used to fill the shortage gap in CalPers and CalSTRS pension payments, therefore increasing our state debt.

While the "independent" CalPers board promised that taxpayer funds would never be used to supplement public worker pensions, it was just a promise that has been ignored.

The cost to taxpayers in 2010 was $3 billion and the projected deficit for this fiscal year is pegged at $3.5 billion, a very expensive unfulfilled promise and misuse of taxpayer’s funds.

Here is one of the problems with the independent board governing the pension funds; they are not actuaries and they continue to ignore the advice of their senior actuaries. Most of the CalPers board members are public employee friendly or are union members themselves. They are projecting an annual return of 7.75% on the investment pool and have been since 2007 even though in 2007-09 they lost $65 billion of their $300 billion fund and currently have a projected unfunded liability of $400 billion.

Actuaries for the state pension funds have reported a more realistic return would be in the 4.1% range. Even when municipalities independently decide to leave the CalPers system they are credited with only a 3.8% return.

It appears the philosophy of these boards is, “If there is money in the fund, let’s give it to the employees.” Of course this is money contributed by former and current workers who are counting on their funds being available when they retire.

A similar issue is brewing over at CalSTRS, the public school teacher’s trust fund. The unfunded liability is pushing $300 billion and climbing with no one wanting to talk about it.

The unions argue that when there is a surplus in these funds that there should be increased benefits paid to employees. However, when the market tumbles, as it has in recent years, they are protected by law from taking any reduction in benefits.

What is the net result? Taxpayers make up the difference as has been the case the last few years. And what do taxpayers receive? Simply a shrug and a turn of the head!

The Golden State is setting new records that have a lot to do with public employees. Our unemployment is second highest in the Nation. We have run virtually every manufacturing industry out of here. They have left for other states or countries because of our self-righteous anti-pollution, anti-business, over regulated and excessive legal requirements. Is it any wonder why we can’t fund our highways and schools?

How do we fix this issue? Start first and clean out the current boards and appoint business professionals who deal with numbers. Second; stop the lying. These thugs are nothing more than legalized robbers, legislatively approved to steal from the public. Third; if our legislature doesn’t take corrective action on this issue in the next 12 months vote them out. Forget the party line and remember their promise, "To serve the people of the state of California," (this promise is not limited to just public employees).

Miles Barber can be reached at Scweekly2011@yahoo.com