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CSPP
The real story behind Sacramento's push for tax hikes: pension red ink
Pension related news has been relatively slow this summer except as it relates to the upcoming elections. I am waiting for Jon Cox to make a statement on the public pension crisis, but haven't yet heard or seen a definitive plan. Gavin Newsom's views were made crystal clear in his proclamation to various unions that, even if the upcoming State Supreme Court decision allows, he will still 'enforce' the California Rule. I'm not sure how this would be accomplished, but just making the statement is scary enough.
This last month has been full of the Department of Motor Vehicles news. What began as an effort to discover why waits are up to 7 hours long in some places led to much more being revealed. The State Legislature had a proposal before them to delve into DMV operations in order to discover why service has deteriorated, but it failed to pass.
Instead, on the same day, the Legislature approved $16.6 million to hire 230 more DMV employees, with a separate request for $26 million to hire an additional 400 employees. As one article stated, they are even considering allowing unlimited funds to be available at the discretion of the Department of Finance.
If this wasn't bad enough, it was disclosed that there is a "secret" DMV office near the State Capitol that serves current and retired members of the Legislature and Congress - and their staffers - allowing them to avoid long wait times. Although this office has been around for decades, it resurfaced as an issue following the furor over wait times for the general public.
The second big story of the summer seems to be proposals for increased taxes and bonds, including pension obligation bonds, aimed at reducing/managing pension debt without any reform measures.
As we know, bonds simply delay their repayment costs to future generations.
Taxes and bond measures are on the agenda for several cities and counties throughout the state and nation as well as local public agencies. The Shoreline Unified School District is considering a bond measure of $30 million for school facility improvements. It's obvious to those who follow the pension crisis that schools lack money for such basic expenditures because of unfunded pension debt.
This editorial from the San Diego Union-Tribune covers two tax increase proposals that might be on the November ballot.