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Please read and remember this the next time your politician says they cannot reduce cost!!!!

Original post made by Rita on May 17, 2011

More wasted money by the state of California.



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Comments (52)

Posted by Early Bird, a resident of Birdland
on May 17, 2011 at 9:17 am

[Post removed because it was directed toward another commenter and did not further the conversation.]


Posted by Rita, a resident of Downtown
on May 17, 2011 at 10:15 am

Early Bird,

When I say those things then you can comment on them as fact but until such time as I do please keep your opinions about me to yourself as it is not true. I am only pointing out that we are bankrupt as a state at the same time as people are gaming the system. Jerry Brown signed an executive order a few days ago allowing these payouts to take place at the same time people in Sacramento are saying that there is nothing to cut. Do you people realize that currently Sacramento has almost a 500 billion dollar unfunded pension liability for the state workers?


Posted by Early Bird, a resident of Birdland
on May 17, 2011 at 10:31 am

Tell me, Rita, how you are outraged by excessive CEO salaries and the way corporate lawyers game the system to avoid paying billions in taxes, and I might then take more seriously -- what? your desire to deny workers their vacation pay? [portion removed]


Posted by Paul, a resident of Birdland
on May 17, 2011 at 11:17 am

Early bird,

I think there is only one thing blowing and that is you. If we really wanted to take out all of the gimmicks.....flat tax of 20% for all individuals, corporations, businesses, etc. with no deductions of any type. 20% off the top of everyones gross. You make $100,000,000, you pay $20,000,000 in taxes, you make $100, you pay $20 dollars in taxes. Everyone is in and everyone gets the same retirement and no fat cat pensions like cops, teachers, lifeguards, toll takers, get. Change is coming and I do not think the libs are going to like it one bit..............


Posted by Early Bird, a resident of Birdland
on May 17, 2011 at 11:36 am

Yes, take out the gimmicks, and double the tax rate for those currently in the top ten percent.

Working people already pay way more than they should; and they're not the ones using the gimmicks. You exploit my labor and make huge profits from it? Well then you pay more. That is justice.

Let's follow the lead of our democratic socialist friends in Scandenavia. A more just system ensures a higher quality of living for all. Better health; better education; longer lifespans; far more greater satisfaction with their lives.

The selfish fatcats have ungodly sums of money and they're sitting on it, holding the Obama admin hostage, and at the expense of our near-10% unemployed. No jobs? Let's tell the fatcats -- get your money out of your deep pockets and invest it or we will tax all that dead, unnecessary wealth away from you.


Posted by Amazing, a resident of Bonde Ranch
on May 17, 2011 at 11:46 am

Early bird,

So tell me the answer to this. I have no deductions whatsoever, house paid off, no dependents, I pay 39.6% federal tax rate and 10.9% california tax rate so about 50% of my income goes in taxes and that does not even include sales tax, bridge toll, school bonds, giving to churches etc. How much of my income would you leave me with? 10%? 20%? In your mind what would you think fair?


Posted by Early Bird, a resident of Birdland
on May 17, 2011 at 12:04 pm

39.6% sounds pretty steep, "Amazing." You're paying higher than the highest tax rate?

In addition to exaggerating about your federal tax rate, you haven't provided us with what your earnings are. As standard, I personally would start with a top-grade full professor at, say, ucberkely. What does he or she make? Tops. Maybe 200 grand?

Since the professor is contributing to society at least as much as any employer, I'd tax the employer or employee at a rate that leaves him/her with a very comfortable after-tax income -- namely, exactly the same as that which the full professor at ucberkeley is left with. Sounds fair to me.

Of course this is just my opinion. Democratic socialist countries have quite detailed formula for ensuring economic justice.

When working my way through undergrad studies as a unionized cab driver, I picked up three well-dressed gentlemen who had been staying at a modest but comfortable hotel. They identified themselves as being from Sweden. I said, 'Ah, you're socialists!' And they replied in a cheerful manner, 'Yes, but we like it that way!' They then went on to tell me that at that time in Sweden, no person earned more than (roughly) 60 times what the lowest earner earned. All else was taxed. Sweden, you may want to know, is a beautiful country. Clean, healthy, well-educated, with citizens who are far more content with their govt than are US citizens.


Posted by anonymous, a resident of Another Pleasanton neighborhood
on May 17, 2011 at 12:08 pm

Sounds like Early bird is one of public employees who feels entitled to our tax money.

Instead of "double the tax rate for those currently in the top ten percent" I prefer "double the tax rate for those currently receiving public employee pensions." After all it is not the fault of the top earners that the state is in fiscal problem with a ton of pension debt, it is the public employees. Or alternatively, "double the tax rate for those currently receiving public employee pensions that are higher than what they would be receiving with Social Security."


Posted by Sam, a resident of Oak Hill
on May 17, 2011 at 12:09 pm

"Amazing" said: "So tell me the answer to this. I have no deductions whatsoever, house paid off, no dependents, I pay 39.6% federal tax rate and 10.9% california tax rate so about 50% of my income goes in taxes and that does not even include sales tax, bridge toll, school bonds, giving to churches etc."

No, you're not paying 50% of your income in taxes. Stop sounding hysterical. Your MARGINAL tax rate may be close to 50%, but that doesn't mean that 50% of everything you earn goes to taxes.

BTW, I thought that the (marginal !) Federal tax rate topped out at 35% for people making over around $350K per year.


Posted by Early Bird, a resident of Birdland
on May 17, 2011 at 1:02 pm

anonymous states: "After all it is not the fault of the top earners that the state is in fiscal problem with a ton of pension debt, it is the public employees."

That's where anon is sadly mistaken, though it is exactly what the wealthy spend a fortune on in order to ensure this kind of misdirected thinking. anon is assuming a restricted pool of available tax revenue -- a trough -- where public employees are expected to feed, but not too much, because then the wealthy are going to get nervous.

Fact is, we have now reached a state where public and private employees earn roughly the same, all other things being equal. But neither public NOR private employees earn what they should be making. anon wants to turn back the clock to when industrial robber barons hoarded a lion's share of wealth and all those below them, including the child laborers they exploited, were expected to work for a wage that would guarantee they'd show up for work the next day, nothing beyond that.

But we've moved beyond this condition, thanks in large part to unions and progressive political movements. However, the robber barons are still perched atop their castles. Their wealth is obscene by any standard. They can never have enough -- such is the logic of capital -- and they're certainly not going to willingly give it up. Their rich parents taught them that selfishness is a virtue. Over the past decade they've succeeded in deflecting attention away from their own obscene hoardings by pinning the blame on public employees, pitting them against private employees. It's sick.

The rates by which the wealthy are taxed must be radically overturned. Let them make as much as a well-paid Berkeley Professor, no more. Take the newly acquired tax revenues and create a healthier society for all of us. No more teacher bashing. No more cop and fire fighter bashing. We can make this a just system where everyone enjoys a minimal standard of living and where those who desire more than minimal are given the opportunity to acquire more. However: $200,000.00 cap. Decent house. Decent cars. Vacation options. And the satisfaction that comes from living in a just society. This vision is not that of someone who is class envious; rather it is that of someone who recognizes how justice can act as a principle/virtue of fairness, not where justice = just-us.

Let's put this to a democratic vote. No? Why not? You know very well why not.


Posted by Paul, a resident of Birdland
on May 17, 2011 at 1:19 pm

Why don't we quit looking in our neighbors backyard as a means of feeding ourselves? Just leave things as they are and the natural order of things will even everything out. Soon bills which we do not have money for will come due and then judgement day will be upon us and we will have to cut back and cut back dramatically. 500 billion in state underfunded pension liabilities and just in our little city I believe the number is about 285 million in unfunded liabilities. These numbers and the ones which have the government workers and pension holders nervous. We just need to wait and it will correct.


Posted by Paul, a resident of Birdland
on May 17, 2011 at 1:21 pm

By the way, the highest marginal tax rate currently is 35.9% and Obama wanted to raise it to 39.6% but fortunately cooler heads pervailed. Dependent upon income Amazing could easily being paying more than 50% in taxes with no deductions.


Posted by Paul, a resident of Birdland
on May 17, 2011 at 1:25 pm

By the way, here is the link relative to the point made earlier about unfunded pension liabilities.


Web Link

I wonder why Pleasanton Weekly does not do articles about this type of thing?


Posted by chuckles, a resident of Happy Valley
on May 17, 2011 at 1:44 pm

The forward looking, erudite Paul says "Why don't we quit looking in our neighbors backyard as a means of feeding ourselves? Just leave things as they are and the natural order of things will even everything out."

Actually, this is something of a variant of Karl Marx's prediction. Leave things as they are and class revolution will violently assert itself as nature's way of 'evening everything out.'

A democratic socialist believes some evening out is necessary, as a matter of justice. But the best way to do this is by democratic means, not revolutionary violence.


Posted by Drexl, a resident of Ironwood
on May 17, 2011 at 1:59 pm

You guys are all silly. Thread started about a place to save money; and showed that govt workers are saving days above their cap when they should lose it. Once I reach my cap, I don't accrue anymore vacation, why not govt workers? Seriously, getting paid out more than an annual salary, how many days do they get per year, say 6 weeks (30days) on high end; 8 years without vacation?? Something is not right here, I bet there is fraud involved.


Posted by anonymous, a resident of Another Pleasanton neighborhood
on May 17, 2011 at 2:14 pm

govt workers are milking the system and taking advantage of it. When they defer their vacations and accumulate them, they get paid their number of vacation days times their current salary when the use the vacation. First, I am sure they took vacations but did not claim them. By receiving a vacation day one year and using it 10+ years later, they are cashing out when the day is work more, and cost the taxpayers more.

Anybody who has that much vacation time accrued is either not reporting their vacation times and/or they have been receiving too much vacation time and we need to cut it way back.

All the companies I have been at have a use-it or loose-it. It does not do the company any good to have people who do not take vacations as people do need a break from time to time. Plus the liability to the company is huge. Maybe government does not have to account for the liability of unused vacation time but private companies have to keep that on their books as a liability.

Early Bird, you should consider moving to Sweden as they have the Socialist way of life that you want. Or I guess it is easier for you to stay as a public employee and live off the rest of us.


Posted by b, a resident of Another Pleasanton neighborhood
on May 17, 2011 at 4:16 pm

Amazing,

The 35% tax rate (not 39.6% as posted above) applies only to the portion of your income that exceeds $379,150. The portion of your income that is below that amount is taxed at a lower rate.

If it is hurting you to pay 35% tax on your 380,000th dollar of income, the problem is not the government. I assure you, the worker paying a 15% tax rate on $30,000 income would most certainly be happy to trade places with you.

You are enjoying the spoils of being a resident of the United States. It is the stability of this nation that has enabled you to enjoy such wealth and comfort. Quit whining.


Posted by Rita, a resident of Downtown
on May 17, 2011 at 4:23 pm

b,

Do you listen to yourself? He is paying in conservative numbers almost $190,000 in income tax and you are saying that he should feel fortunate? Also you are not tying his success to his hardwork but rather to the government. Wow! Besides it is his money not yours or this governments.


Posted by parent, a resident of Another Pleasanton neighborhood
on May 17, 2011 at 8:08 pm

If you look at Gov Brown's May revise, he says the reason that the state is doing better financially at this moment is because of the extra tax revenue from high-wage earners. You should be thanking them for the taxes they already pay; not keep milking them until they leave the state. The reason the state is so messed up right now is because most of the tax income comes from the high-wage earners so when they get hit, our tax income really suffers. You cannot have a small amount of people pay most of the taxes. You are putting all your eggs in the same basket. We need a more distributed tax model.

Rita, "b" is a spokesperson for the public employee union (has posted many times on this). "b" is a leach on the taxpayers and there will never be enough money paid in taxes to make "b" happy. We need to put "b" in the real-world (i.e., non-governmental) so he can see how working harder can bring in additional income; as opposed to his job now where he gets the same income no matter how hard he works. My guess is that he would not last in a job in the private sector.


Posted by b, a resident of Another Pleasanton neighborhood
on May 17, 2011 at 10:04 pm

Rita, do you listen to yourself?

This is someone earning half a million dollars per year, and he is whining about paying taxes to support the society that made this amazing accomplishment possible?

Do you REALLY think it would possible to run a successful business in this nation without safe neighborhoods, good roads and transportation, reliable sources of electricity and water, outstanding schools, a stable government and judicial system, a strong military, and a middle-class (that isn't being bankrupted by healthcare costs) with disposable income to spend at these businesses?

Where do you suppose business owners vacation? Hiking in Yosemite? Lounging on the oil-free beaches of Carmel? Road trip to Oregon? Walking the dog in a local park?

Do you have any idea how many people in this world would be grateful to be earning so much money that they would have a $190,000/year tax bill?

No, I'm sorry. "His" money would not be possible without "our" government. Like it or hate it, you need it.


Posted by b, a resident of Another Pleasanton neighborhood
on May 17, 2011 at 10:07 pm

Moderator, please edit the comment from "parent," in order to be consistent with your previous editing/censorship of comments on other posts. Unsubstantiated (and false) statements about my affiliations.


Posted by Arnold, a resident of Another Pleasanton neighborhood
on May 17, 2011 at 11:21 pm

"If you look at Gov Brown's May revise, he says the reason that the state is doing better financially at this moment is because of the extra tax revenue from high-wage earners. You should be thanking them for the taxes they already pay; not keep milking them until they leave the state. The reason the state is so messed up right now is because most of the tax income comes from the high-wage earners so when they get hit, our tax income really suffers. You cannot have a small amount of people pay most of the taxes. You are putting all your eggs in the same basket. We need a more distributed tax model.




Rita, "b" is a spokesperson for the public employee union (has posted many times on this). "b" is a leach on the taxpayers and there will never be enough money paid in taxes to make "b" happy. We need to put "b" in the real-world (i.e., non-governmental) so he can see how working harder can bring in additional income; as opposed to his job now where he gets the same income no matter how hard he works. My guess is that he would not last in a job in the private sector."

As a union rep, she doesn't have to work in the private sector as long as she can extract more money for the public employee unions. She views a budget funded with taxpayer dollars and fiscal constraints as nothing more than an obstacle that can be overcome through manipulation of taxpayers, city council, or increased taxes. It is all about funding early retirements and six figure sick leave payouts on top of already bloated pensions.

The recent chatter from B tells me that the PCEA contract negotiations are... BTW, the PCEA pension pension fund is ONLY funded, as of the last valuation (received december 2010), at 52.2%. Based on that number the plan should be in receivership. I've done some research on other city pension plans and I'm yet to find one lower than the PCEA Pleasanton plan. Not good!


Posted by One of the Readers of Books, a resident of Another Pleasanton neighborhood
on May 17, 2011 at 11:33 pm

I guess I'm not exactly sitting on pins and needles waiting for the results of Arnold's research. In addition to his stated inability to recognize the difference between a fact-based article and a right-wing, fascist opinion piece, I'm certain his research report will be about as legitimate as an empty dixie cup blowing across the highway. His inability to draw basic distinctions between facts and opinions is further manifested by an apparent inability to distinguish where another person's stated thoughts stop and where his 'own' begin. (See his post immediately above.)

After Arnold slanders b, he concludes: "I've done some research on other city pension plans and I'm yet to find one lower than the PCEA Pleasanton plan. Not good!" I'll tell you what also is 'not good': Arnold's inability to think and write a coherent thought that meets even minimal standards of grammar. Here we have another example of an ill-educated local yokel pretending as if he has something serious to say about the educational system that failed him.


Posted by Arnold, a resident of Another Pleasanton neighborhood
on May 18, 2011 at 12:08 am

One of the Readers of Books,

Thank you for the kind words. While you're busy critiquing my grammar maybe you can dust off a finance book and figure out how to convince your members that their pension check won't bounce. Or maybe you can convince the taxpayers that their services won't suffer as pension costs escalate and employees are let go. Tell the parents of school aged children how the escalating pension costs will lead to increased class sizes and reduced support staff. You might also mention that the cost of a college education is about to spiral out of control.

How do you propose we solve the problem of under funded pensions, a corrupt CalPERS, and unfunded healthcare liabilities? Should we ignore those issues while placing all of our focus on grammar?


Posted by Reader of Books, a resident of Another Pleasanton neighborhood
on May 18, 2011 at 1:16 am

Poor grammar is simply an indicator of sloppy thinking, Arnold, as is an inability to distinguish a fact-based article from an opinion piece.

Fascists like yourself already have provided your answer to all things woeful: bash the teachers, bash them some more, and keep on bashing them. Rather than consider a serious overhaul of Cal's tax structure -- one that would necessarily entail that corporations and the wealthy pay their fair share -- you instead trot out your chicken little routine and cry about teachers' causing the sky to fall. The consistent lament is tiresome, it lacks proportion -- compare for example teacher wealth with that of the top 1-2% of wealthy in the state -- and it appears to delight in its desire to tear down the state's educational system. Afraid all those unionized teachers are going to promote critical thinking that places students' knowledge of the world a cut or two above that of Pleasanton's right-wing local yokel clown club? Too bad, you lose.

If Cal, like other states, is experiencing hardship, you might consider turning your attention toward the real culprits on Wall Street whose unregulated behavior caused the loss of millions of jobs, record foreclosures, and untold hardship for America's working classes. But you refuse to go there. Rather than support state-enforced measures that would limit the kinds of blood sucking of American workers that goes on at virtually every level of your hallowed private sector, you and your fellow fascists choose rather to cry out for govt'l regulation of the teaching industry (e.g., bust unions, cap pensions, limit vacation days, etc., etc., boo-hoo, boo-hoo, we're victimized by the teachers, boo-hoo). Well, try as you may, the facts are patent. Our teachers are not at fault, nor are their unions. Talk about putting some teeth into legislation that would tax U.S./Cal companies that have abandoned Cal workers in favor of cheap foreign labor (locked inside sweatshop factories that are guarded by uzi-armed thugs -- the internat'l equivalent of America's Pinkertons), and you might gain some traction with the community. But make no mistake, your fascist, union-busting, public assembly-disrupting ideas and antics have left this community's majority exhausted, exasperated, and demoralized.


Posted by b, a resident of Another Pleasanton neighborhood
on May 18, 2011 at 5:57 am

My 401(k) is underfunded, too. That is what this Wall Street induced recession did to many of us little people. That's why I don't get to retire in my 40's like Bart Hughes did. Although we'd all love to have it as easy as he does, I don't consider that a crisis.

Arnold, Instead of calling me names and making up fairy tales, how about doing some research, and doing a post for us on how "underfunded" is actually calculated. Hint: it isn't what you seem to think it is, nor is it an especially big problem for the taxpayers.


Posted by Another, a resident of Another Pleasanton neighborhood
on May 18, 2011 at 7:14 am

Arnold - I commend you with trying to engage in a fact-based, issue focused discussion. However as you can see, you are running into the same mantra that always tends to happen - name calling, generalization/bucketing, avoiding the topic, etc.

Knowing that the top 1% already pay about 50% of CA taxes, I keep laughing when I hear these people say that the rich are not paying their fair share. The good news in all this as indicated by recent poll numbers, is that it is highly unlikely that CA taxes will be raised.

Instead, the government (state, county, city) will be forced to begin to live within its means. It may be happening slower than we like, but it is happening.

In the meantime, I try not to get too caught up with the fantasy tax/rededistribute nirvana that these folks want. It probably won't happen.


Posted by b, a resident of Another Pleasanton neighborhood
on May 18, 2011 at 8:42 am

"another" are you reading the same thread as I am? Arnold has yet to cite any facts, and has devoted multiple posts to calling me names and slandering me.

I also find it interesting that the moderator of this forum only feels the need to censor the unsubstantiated innuendo of one side of this debate.


Posted by steve, a resident of Parkside
on May 18, 2011 at 9:03 am

Has anyone thought about what happens to our country when the 'rich' (those earning more than $200K--which is middle class in Calif with our cost of living) are kept from earning more than $200K? What is their incentive to keep striving to succeed? Would you stop Silicon Valley green business leaders from continuing to innovate because they've reached theri earning potential?
Forget Sweden---I think the old Soviet Union is right up your alley.


Posted by b, a resident of Another Pleasanton neighborhood
on May 18, 2011 at 9:09 am

"another" ... If we're going to mutually agree to a fact-based dialogue, could we also agree to use accurate facts, as opposed to "facts" that sound real, but aren't?

You said: "Knowing that the top 1% already pay about 50% of CA taxes.". Casual readers will see you citing numbers, and draw the false conclusion that you have researched the issue and are citing facts.

However, it appears that you actually meant to say that the top 1% pays about as much tax as the bottom 50% of tax payers, which is an oft-quoted statistic by right-wing groups. While that may sound like the same thing, it is VERY different. And it is a an excellent example of how statistics are carefully crafted to manipulate your perception of a situation.

What is always left out of this analysis is the percentage of income earned by the top 1%, relative to the bottom 50%? And who are the bottom 50%? How much money do they have to live on in this expensive state.

So since you demanded a fact-based discussion, and opened this can of worms with statistics you made up, you get some homework.

Given: top 1% pays same $ amount of taxes as bottom 50%.

Find:
- How much total $ did the top 1% earn?
- How much total $ did the bottom 50% earn?
- What is the median household income in CA? (so we all have a baseline about what it means to be a 50%er)
- What is the average cost of a 3 bedroom apartment in the Bay Area?


Posted by b, a resident of Another Pleasanton neighborhood
on May 18, 2011 at 9:23 am

Steve, that would be a problem. But considering the current and proposed tax rates on $200k earners, it isn't even a remote concern. Think it is? Show me one $200k earner who wouldn't mind being a million dollar earner.

We now have more than 30 years of history to prove that Reaganomics does nothing but create bigger deficits. And we have an even longer history proving that higher tax rates reduce deficits without reducing the incentive to strive for more.

That's a fact based argument. Go ahead, Google the stats.


Posted by Stacey, a resident of Amberwood/Wood Meadows
on May 18, 2011 at 10:13 am

Stacey is a registered user.

This whole thread exhibits the continued lack of proportion shown by many posters here.

These posters are all just teeny tiny humans on teeny tiny Earth which is merely one of the zillion trillion bazillion life-supporting planets circling one of the zillion trillion bazillion stars rotating in solitude in the vast space-time bubble of existence known as the Universe. With whole solar systems being extinguished by black holes, galaxies colliding, life-bearing planets consumed by supernovas, and heavenly bodies playing cosmic billiards in the grand dance of physical laws, how much the top 1-2% are taxed in California or how much teachers make is certainly not worthy of any attention whatsoever. A Vogon demolition ship should just arrive in our little corner of the Universe, hanging in our atmosphere like a brick doesn't, and wipe us away to make way for an intergalactic highway. Nobody would notice and it would finally put an end to our petty, worthless concerns.

Yea, that's right, quit your whining. Pay no attention to the man behind the curtain. These aren't the droids you're looking for. Don't address structural fiscal issues of government agencies, raise taxes on the rich, or close corporate tax loopholes because there's a much more important planet that's about to be hit by a 20 million metric ton asteroid and you should be looking to help the people there instead of trotting out your petty concerns.


Posted by Wondering, a resident of California Reflections
on May 18, 2011 at 10:53 am

So, um, Stacey. Really enjoyed your post, but again either you provide stats with unclear argument or unfounded claims without stats. Here it's the latter. Here, unfortunately, your weak attempt at sarcasm just flew over the heads of the majority of P-Town's local yokel clown club. They're still with ya though, kid. Fascism never sleeps in this town.


Posted by Zealous Citizen, a resident of Castlewood Heights
on May 18, 2011 at 11:47 am

If the public employees hadn't entered into unregulated derivatives trading, if the public employees hadn't knowingly bundled bad subprime mortgages and cast them off as 'good as gold', if the public employees hadn't rated the bundles of rubbish as 'aaa', if the public employees hadn't bet against the fraudulently bundled loans, if the public employees moonlighting as realtors hadn't sold houses to unwitting customers at unsustainable subprime rates, if the public employees hadn't used their credit union to back buyers' mortgages, then California wouldn't be experiencing this apocalyptic crisis that threatens to encourage poor families to exit the state and bring more poor families in. Regulation will only work if we can somehow make sure public employee pensions are reduced. Some fascist movements target members of an ethnic group, others target immigrants, we target public employees. All we need now is a leader willing to land on the deck of an aircraft carrier in full military uniform in order to rally our pure taxpaying citizens in support of a grand cause, like reducing public employee pensions. Christie might be the guy, though they'd have to find a military costume to fit his body size.


Posted by Arnold, a resident of Another Pleasanton neighborhood
on May 18, 2011 at 7:24 pm

"Arnold...how about doing some research, and doing a post for us on how "underfunded" is actually calculated. Hint: it isn't what you seem to think it is, nor is it an especially big problem for the taxpayers."

B

I keep hearing that from you - pensions aren't a problem, and that says a lot about who you really are. Since you are challenging me to post "how "underfunded" is actually calculated.", I'll accept your challenge. Here we go, and even a fifth grader can follow along. From the CalPERS Actuarial report for the PCEA pension plan:

*Present value of projected benefits...$164,715,543 (what's owed if the plan closed today)
*Market Value of Assets................$ 85,946,752 (the money in the plan)

*Unfunded Liability....................$ 46,741,397

Funded ratio is 52.2% - significantly below the minimum threshold of 80%.


In other words, if the city closed the current plan and started a new plan going forward, they would have to come up with 47 million dollars. They can't do that so they would need to finance the 47 million at about 6% over the next 30 years, to pay for past service. What that means is the 47 million dollars will grow significantly.

Think of it this way, if you bought a 47 million dollar house and financed it over 30 years how much would that cost? In my example, after the 30 years of pension payments you don't have the house. You've only paid for service that was consumed prior to the re-financing. In the meantime, because the CalPERS pension plans are unsustainable, you are creating a new unfunded pension liability to stack on top of the old unfunded liability.


Posted by b, a resident of Another Pleasanton neighborhood
on May 18, 2011 at 7:43 pm

There are two problems with these statistics: "present value of predicted benefits" is a wild ass guess. "Market value of assets" is subject to gross manipulation (a substantial portion of assets are fairly difficult to value precisely--so more wild ass guessing), and the values of many were artificially written down during the recession.

Add those up, and you're left with another WAG.

This is how people manipulate you with statistics.

If you're really concerned about it, write a big check. The "problem" will go away tomorrow, and you can sleep better.

And don't start with the "how big of a return would you need..." BS. I've already addressed it in Big Bart's previous threads. The market doesn't work that way.

The reality is that these are future liabilities, and no one really knows what will happen in the decades before they come due. It is sort of like speculating about what would happen if there were a run on the bank. But in this case, the depositors can't even make a run on the bank. The due date is known.


Posted by Arnold, a resident of Another Pleasanton neighborhood
on May 18, 2011 at 7:50 pm

My previous post with corrections

B

I keep hearing that from you - pensions aren't a problem, and that says a lot about who you really are. Since you are challenging me to post "how "underfunded" is actually calculated," I'll accept your challenge. Here we go, and even a fifth grader can follow along ( I guess I struggled in fifth grade). From the CalPERS Actuarial report for the PCEA pension plan:

*Entry age accrued liability……...$164,715,543 (what's owed if the plan closed today)
*Market Value of Assets...............$ 85,946,752 (the money in the plan)

*Unfunded Liability....................$ 78,769,631 (the difference)

Funded ratio is 52.2% - significantly below the minimum threshold of 80%.


In other words, if the city closed the current plan and started a new plan going forward, they would have to come up with 78.7 million dollars. They can't do that so they would need to finance the 78.7 million at about 6% over the next 30 years, to pay for past service. What that means is the cost/dollars will grow significantly.

Think of it this way, the 78.7 million is what taxpayers owe employees for work that has already been performed. So, even though they have been paid well we still owe them money (78 million). That doesn't include the cost of the mostly unfunded retiree health care.


Posted by Arnold, a resident of Another Pleasanton neighborhood
on May 18, 2011 at 8:06 pm

"This is how people manipulate you with statistics.

If you're really concerned about it, write a big check. The "problem" will go away tomorrow, and you can sleep better.

And don't start with the "how big of a return would you need..." BS."

B, from the tone of your comments it sounds like you don't believe these numbers could possibly be true (based on my first post which erronously left out 30 million in unfunded liability). If you were to find out these numbers are true would you be as concerned as I - doubtful.

"I've already addressed it in Big Bart's previous threads. The market doesn't work that way."

B, these numbers aren't my numbers and they're not "Big Bart's" numbers either. These numbers are directly from CalPERS. Maybe you should share your concerns with them.


Posted by s, a resident of Birdland
on May 18, 2011 at 8:42 pm

It is ironic that the public employee unions say the problem with our finances is caused by the banking industry and all the manipulations they have done. The reason the public employee pensions became more generous in 2001-2002 was because of the banking industry manipulations. The rate of return on CalPERS was so high because CalPERS was investing in shady real estate deals and the stock market that was being held up by the banking industry. They then said they could offer a more generous pension at no cost to the taxpayer because of their great returns.

So if the banking industry did not do all those manipulations, we would not have offered a significantly more generous pension plan.

So if the public employees blame the banking industry in the market going down, they need to blame the banking industry for the market going way up, which resulted in a enhanced pension plan. The stock market increases were unsustainable and the current pensions are just as unsustainable.


Posted by Fed Up, a resident of Happy Valley
on May 18, 2011 at 9:04 pm

I think b has a great suggestion.

If the apocalypse-is-upon-us fascists are so concerned about the state's decline, why don't they just write a check? That's what many P-Town citizens are doing in order to prevent the schools from collapsing.

Why is it that the fascist 'No on E' crowd is so quick to tell people to use their own instead of somebody else's money but so unwilling to put their own money where their mouth is when it comes to the state? If you're so concerned about the state collapsing, write a check rather than expecting public employees to foot the bill.


Posted by Juanito, a resident of Downtown
on May 18, 2011 at 9:08 pm

Fed Up,

Do you use mind altering drugs? Do you hear dead people? Do you think there was another shooter on the grassy knoll? Where is Jimmy Hoffa?.............


Posted by Juanito, a resident of Downtown
on May 18, 2011 at 9:12 pm

Fed Up,

On a serious note, the government pensioners, teachers, and others are the doll will and are going to sacrafice a lot. Many of you on retirement are going to see the money cut significantly. We will get our money back and it is going to come from you, so write it down and it has already started...............


Posted by Fed Up, a resident of Happy Valley
on May 18, 2011 at 9:15 pm

Just remember, Juanito. Harmer lost the election because so many Republicans voted for the conspiratorialist Christiansen. Still studying Obama's birth certificate are you? What about the college transcripts of that black guy in office? Don't turn off the lights before you go to bed this evening, Acorn might be hiding under your bed. The preposterous stories the ill-educated fascist mob is susceptible to!


Posted by Fed Up, a resident of Happy Valley
on May 18, 2011 at 9:20 pm

Oh, okay, you'd like an example of someone who's a member of the 'ill-educated fascist mob'? Try this:

"others are the doll will and are going to sacrafice a lot. Many of you on retirement are going to see the money cut significantly. We will get our money back and it is going to come from you, so write it down and it has already started..............."

Note the menacing tone, the poorly veiled threat, the imagery of people sitting on dolls before being called to the pyre to 'sacrafice' their retirement pay.

Ain't that just a doll though?


Posted by Juanito, a resident of Downtown
on May 18, 2011 at 9:46 pm

Fed up,

I am a member of a union, voted for Obama, but am smart enough to realize that this practice of pensions being paid in excess of what can be afforded will never work in California nor anywhere. Take a look at united and what happened there. Guarity is going to come in to play here. Ask yourself how it can be afforded and if you are honest you will realize that tough times are coming for those of you who are taking advantage of these pensions.


Posted by b, a resident of Another Pleasanton neighborhood
on May 18, 2011 at 9:57 pm

I absolutely understand that these numbers come from CalPERS. I have no desire to share my concerns with them, because I frankly don't care. I'm not the one making the big stink about this alleged crisis.

CalPERS has every reason to report these numbers conservatively at this point. Reporting artificially low asset values forces member agencies and employees to make larger contributions, giving them more fresh money to invest at lower market valuations. As the markets recover, the larger base of money generates higher returns with lower risk. The "underfunded" guesstimates disappear, and the TEA Party/Chicken Little crowd look like idiots. Absolutely brilliant, if you ask me.

I stand by my prediction. If that Pleasanton "underfunded" balance doesn't approach zero within 2-3 years, I'll dress up in a yellow chicken suit and kiss babies on street corners with Kay and her clipboard.


Posted by Fed Up, a resident of Happy Valley
on May 18, 2011 at 9:58 pm

@ "and lastly I do not think you like mexicans and are a racist."

I'm unable to understand much of what you're attempting to say in your two recent posts. I'm usually pretty good at interpreting the fascist nonsense that comes out of your and others' pens. Not tonight, sorry. Good thing though that you have union protection. You should be grateful.

As to your attempt to paint me as a racist, didn't you forget to add 'doll sitting, liberal, public employee, racist'?


Posted by Arnold, a resident of Another Pleasanton neighborhood
on May 18, 2011 at 10:59 pm

"Posted by b: "I absolutely understand that these numbers come from CalPERS. I have no desire to share my concerns with them, because I frankly don't care. I'm not the one making the big stink about this alleged crisis.

CalPERS has every reason to report these numbers conservatively at this point. Reporting artificially low asset values forces member agencies and employees to make larger contributions, giving them more fresh money to invest at lower market valuations. As the markets recover, the larger base of money generates higher returns with lower risk. The "underfunded" guesstimates disappear, and the TEA Party/Chicken Little crowd look like idiots. Absolutely brilliant, if you ask me."

Silicon Valley Executive? You continue to regurgitate the standard union issued talking points:

1) What pension problem?
2) It is Wall Streets fault (I don't disagree- but the public sector unions have benefited). If anyone should be complaining about the Wall Street Fiasco it is the private sector/private sector unions (and I support private sector unions).

3) We represent the middle class. Sure you do. That may have been true 15 years ago but it is a distant memory now. Public sector Unions are pilfering the middle class, the lower class, and the upper class. The foundation of the Public Sector Union Pyramid is crumbling. That is to the benefit of everyone.

"I absolutely understand that these numbers come from CalPERS. I have no desire to share my concerns with them, because I frankly don't care."

I know - you've said that many times.

B, you seem upset. The numbers I've posted are true. You can check with the city (or CalPERS) if you don't believe me. I understand if you find the numbers difficult to accept because I felt the same way the first time I saw them. They're scary.

"I have no desire to share my concerns with them, because I frankly don't care. I'm not the one making the big stink about this alleged crisis."

I think it is less than interesting that you refer to a serious problem as an "alleged crisis". You challenged me to provide the numbers. I did that. Does a 78 million dollar unfunded pension liability concern you at all? And why do you think your units pension should be the taxpayer's problem. If you aren't concerned about the plans solvency why should we care (other than the fact we get to pick-up the check for a meal we didn't eat, while at the table of people we don't know)?


Posted by Arnold, a resident of Another Pleasanton neighborhood
on May 18, 2011 at 11:04 pm

"I stand by my prediction. If that Pleasanton "underfunded" balance doesn't approach zero within 2-3 years, I'll dress up in a yellow chicken suit..."

B, that will never happen. You should go ahead and get fitted for that new suit.


Posted by b, a resident of Another Pleasanton neighborhood
on May 19, 2011 at 3:02 pm

Upset? LOL. I've read the numbers. If you are reading these numbers the same way you read your bank statement, the joke's on you.

Accounting is a very inexact science. You need to read the detailed reports and footnotes to understand what's really going on.

Over the past couple years, they've massively written down real estate and other relatively hard to measure assets. Good "conservative" accounting. But way below the real value.

This is how you get played. Just watch...over the next 2-3 years, they'll announce massive "gains" in those very same assets.


Posted by Wow, a resident of Another Pleasanton neighborhood
on May 19, 2011 at 3:19 pm

"I stand by my prediction. If that Pleasanton "underfunded" balance doesn't approach zero within 2-3 years, I'll dress up in a yellow chicken suit..."

Wow b, do you really know what you are signing up for? Do you realize that the current proposed budget assumes they will do nothing over the next two years to reduce the unfunded liability?

So unless there is a massive stock market increase, there is no chance the balance will go to zero. This is not going to happen. In fact, I'll give you 15:1 odds that it won't, heck I'll give you 100:1 odds that is won't if you are big enough to take the bet to back up your confidence.

But remember you are the one earlier this year who said that real estate was starting to boom again and now we have dipped into another housing down-turn. Your positive exuberance seems to be clouding your perception of reality.

Can't wait to see the yellow chicken suit ...


Posted by Latte Drinker, a resident of Downtown
on May 19, 2011 at 11:02 pm

Good news from Paul Krugman, Princeton Professor of Economics, Nobel Prize Winner, and columnist for the NYTimes.... (Gotta say, my friend purchased a Chevy Volt last week, and I am extremely impressed.)....

[O]ne potential disaster has been avoided: the U.S. auto industry, which many people were writing off just two years ago, has weathered the storm. In particular, General Motors has now had five consecutive profitable quarters.

America's industrial heartland is now leading the economic recovery. In August 2009, Michigan had an unemployment rate of 14.1 percent, the highest in the nation. Today, that rate is down to 10.3 percent, still above the national average, but nonetheless a huge improvement.

I don't want to suggest that everything is wonderful about U.S. manufacturing. So far, the job gains are modest, and many new manufacturing jobs don't offer good pay or benefits. The manufacturing revival isn't going to make health reform unnecessary or obviate the need for a strong social safety net.

Still, better to have those jobs than none at all. Which brings me to those right-wing critics.

First, what's driving the turnaround in our manufacturing trade? The main answer is that the U.S. dollar has fallen against other currencies, helping give U.S.-based manufacturing a cost advantage. A weaker dollar, it turns out, was just what U.S. industry needed.

Yet the Federal Reserve finds itself under intense pressure from the right to make the dollar stronger, not weaker. A few months ago, Paul Ryan, the chairman of the House Budget Committee, berated Ben Bernanke for failing to tighten monetary policy, declaring: "There is nothing more insidious that a country can do to its citizens than debase its currency." If Mr. Bernanke had given in to that kind of pressure, manufacturing would have continued its relentless decline.

And then there's the matter of the auto industry, which probably would have imploded if President Obama hadn't stepped in to rescue General Motors and Chrysler. For those companies would almost surely have gone into liquidation, closing all their factories. And this liquidation would have undermined the rest of America's auto industry, as essential suppliers went under, too. Hundreds of thousands of jobs were at stake.

Yet Mr. Obama was fiercely denounced for taking action. One Republican congressman declared the auto rescue part of the administration's "war on capitalism." Another insisted that when government gets involved in a company, "the disaster that follows is predictable." Not so much, it turns out.

So while we still have a deeply troubled economy, one piece of good news is that Americans are, once again, starting to actually make things. And we're doing that thanks, in large part, to the fact that the Fed and the Obama administration ignored very bad advice from right-wingers — ideologues who still, in the face of all the evidence, claim to know something about creating prosperity.


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