California’s Massive Debt – $71 Billion for Teacher Retirements

Posted on Monday, March 24, 2014 by Post Scripts

by Jack

The Democrat lawmakers and Unions have done a wonderful job raising teachers pay and benefits package, in fact its so good they may not be able to collect their retirement because Calif. will be broke. Actually we are now, however we’ve been able to put a lot of the debt on a credit card for payment at a future day. We call these things unfunded liabilities. The City of Chico has been hearing a lot about unfunded liabilities too. We’re as broke as the State.

A large part of the State’s debt is owed to the California State Teachers’ Retirement System. The cost to taxpayers to fully fund the teachers’ pension debt will be almost $4.5 billion in the coming year, $4.6 billion the year after that, and more in each subsequent year.

CalSTRS calculates that 30 years from now – and many veteran teachers who retire now will live another 30 years – the annual cost of fully funding the system will be $13.9 billion. In order for us to pay off the money borrowed from the retirement fund, think of this like a mortgage held by the taxpayers, the state, school districts and teachers will need to pay out $235 billion over the next 30 years to make good on that $71 billion liability. That’s a lot of interest payments and it’s money that will not be used for any good purpose, just paying off credit debt.

Meanwhile Senate Democrats announced legislation on Tuesday to expand kindergarten to help 4-year-old children get off to a good start in school, at a cost of $198 million a year.

This entry was posted in Uncategorized. Bookmark the permalink.

7 Responses to California’s Massive Debt – $71 Billion for Teacher Retirements

  1. bob says:
    Tuesday, March 25, 2014 at 8:33 am

    Don’t worry, Jack. Bownie and the Demoncrats will just con the Colliefornian voters (as Ahnode calls them) into another round of tax increases.

    Heck, he’ll prolly come up here and deliver it personally to you like he did last time when I saw you on the telly.

    And if Brownie and the Demoncrats can’t they will figure out some other way to raise taxes or borrow more.

    You ready for 4 more years of Brownie?

  2. Tina says:
    Tuesday, March 25, 2014 at 10:48 am

    It remains a mystery to me how these leftists think they will generate enough revenue when they are so hostile to those who create wealth, jobs, and a vibrant economy. Taxing the rich has its limits since investment in business and enterprise declines when taxes and regulation become too restrictive. After all of these years one would think the left would learn to love the word profit since companies that can profit are more likely to expand and through growth expand the tax base.

    The elephant in the room, as we argue about raising or lowering tax rates, is that the constant growth, and therefore the cost, of government is out of control. Those who like big government think that higher tax rates will solve the problems of government. Republicans point out that the more we give to government the more they spend.

    The people are, of course, the problem. We are, in fact, at a tipping point. If the people continue to demand more in government services, we will see ourselves on a fast track to mediocrity, sloth, and a society of two classes…the very wealthy and the surviving poor.

    The middle class in America grew and thrived because we had a system of government that valued freedom and individual effort. anyone, it was said, had a chance to own his own business and to become well to do, if not wealthy. It was a place where because individuals had that opportunity the chance to get a good job and lift the family out of poverty was possible. A country of growing government is killing that dream as it sucks up revenue and hampers the dreams of ordinary Americans.

    Jerry Brown and his Democrats are of the same big government mind as Barack Obama, a man that has increased the size of government like no other President before him. But raising taxes to generate more revenue can never keep pace with spending. As Jack Kemp pointed out years ago when you raise taxes on something you get less of it. And as Michael Barone points out:

    When the government took 91 percent of what the law defined as adjusted gross income over a certain amount, not many people had adjusted gross income over that amount.

    According to a Congressional Research Service study, the effective income-tax rate on the top 0.01 percent of earners in the days of nominal 91 percent tax rates was only 45 percent. Others have pegged it at 31 percent.

    In the 1970s, when the top rate on wage and salary income was 50 percent, and 70 percent on investment income, high earners spent much of their time and energy seeking tax shelters. The animal spirits of capitalists, to use John Maynard Keynes’s term, were directed less at productive investment and more at tax avoidance.

    Keynes apparently knew that higher rates don’t result in more revenue but the big government types like Brown and Obama ignore this reality and push for economy stifling higher taxes at every turn. They do it because they believe they can get away with it. If the economy collapses they will not suffer but in the meantime ignorant voters will continue to put them in power..and power is what they want. Power to arrange life according to their priorities and ideology. Power to control the future.

    Wake up pilgrims. We must throw the big government, freedom

    killers out or resign ourselves to a life of just barely getting by.

  3. Jim says:
    Tuesday, March 25, 2014 at 11:28 am

    I’m sure you must have the same concerns over the pensions that police and firefighters receive, which are considerably higher than teachers get, after working about 10 fewer years.

  4. Tina says:
    Tuesday, March 25, 2014 at 1:45 pm

    Since Jack wrote, “The City of Chico has been hearing a lot about unfunded liabilities too. We’re as broke as the State,” and since he’s written about it before I’m pretty sure the answer to your question, Jim, is yes.

    Teachers, firefighters, and police officers should of course be compensated for their work. they should not be able to negotiate benefits for themselves that cause the city, county or state to go bankrupt. Nine of us would organize our own personal finances in this way. There is something dishonorable about politicians and public servants conspiring together for their own mutual benefit anyway. Personally owned health insurance and pensions would take the incentive to trade better benefits for promises of votes and campaign donations. Those of us who work in the private sector have to provide these things for ourselves.

    Teachers, in my opinion, could be paid more with the elimination of administrators and layers of needless bureaucracy. Too many of our tax dollars for education never make it to the classroom.

  5. Jim says:
    Wednesday, March 26, 2014 at 7:44 am

    Tina: “Teachers, in my opinion, could be paid more with the elimination of administrators and layers of needless bureaucracy. Too many of our tax dollars for education never make it to the classroom.”

    I totally agree with you, colleges, cities & school districts are top heavy with administrators.

Comments are closed.