CalPERS $100,000 Pension Club has more than doubled since 2012, new data show

Last year, the California Public Employees’ Retirement System (CalPERS) issued 30,969 pension checks that were worth $100,000 or more on an annualized basis, according to newly released pension payout data from TransparentCalifornia.com.

https://transparentcaliforniablog.files.wordpress.com/2019/04/calpers_100kclub.png

The new, 2018 data reveals that CalPERS is now paying out over $23 billion annually in pension benefits, 17 percent of which will go towards those receiving annualized pensions of $100,000 or more.

The growing number of $100K-plus pensions reflect an increase in newer retirees who benefited from the pension enhancements passed in 1999 and 2001. As documented by reporter Ed Mendel of Calpensions.com, CalPERS advocated for these enhancements by falsely claiming that they would not cost “a dime of additional taxpayer money.”

In reality, these enhancements are part of the reason why governments across the state such as Fullerton’s are now struggling under the weight of soaring pension costs.

We have updated the link on our homepage to the 2018 list of Fullerton’s 732 pension recipients and will be doing a follow-up post about it. To view the updated list now, please click here.

The average pension of state and local retirees who worked at least 30 years before retirement are shown in the chart below:

To explore the complete 2018 CalPERS dataset in a searchable and downloadable format, please click here.

CalSTRS

The California State Teachers’ Retirement System has also seen an explosion in the number of those drawing pensions of at least $100,000 in recent years, as shown in the chart below:

https://transparentcaliforniablog.files.wordpress.com/2019/04/calstrs100kclub.png

The average pension for full-career CalSTRS retirees hit an all-time high of $73,920 last year — an increase of over $10,000 from 2011.

To explore the complete 2018 CalSTRS dataset in a searchable and downloadable format, please click here.

Transparent California will be continually updating its website with new, 2018 data from California’s other pension funds in the coming weeks. Be sure to follow their Facebook and Twitter accounts, sign up for their mailing list, or subscribe to their blog in order to receive the latest updates.

We have updated the link on our homepage to the 2018 list of Fullerton’s 732 pension recipients and will be doing a follow-up post about it. To view the updated list, please click here.

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Tonight’s special city council meeting agenda

The AgendaTo read or download the agenda for tonight’s special council meeting from the City’s website, please click here.

The meeting is scheduled from 6:30-8:30 in the Council Chambers.

This is a strategic planning study session is to create a Mission and Vision Statement for the City and to update the City’s Priority Policy Statements. The discussion agenda for the Study Session will cover the following topics and will be facilitated by former Interim City Manager Allan Roeder:

  • Third Quarter FY 2018-19 Report and Preliminary FY 2019-20 Budget Presentation
  • Summary of Community Stakeholder Engagement Responses
  • City Council Discussion of:
    – Mission, Vision and Priority Policy Statements
    – Priorities for use of city resources for city services and programs
  • Public Comments

If you can’t attend, you can watch the meeting at home on cable Channel 3 (Spectrum — formerly Time Warner Cable).

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Call the Capitol today to protect Proposition 13!

The Howard Jarvis Taxpayers Association is asking members and supporters to oppose the newest attack on Proposition 13, Senate Constitutional Amendment 5. This measure would make it easier to raise property tax bills by lowering the two-thirds vote currently required for approval of local education parcel taxes to just 55 percent.

ACTION IS NEEDED NOW!

SCA 5 will be heard in the Senate Governance and Finance Committee tomorrow morning, April 24. Please call the legislators listed below today and ask them to protect Proposition 13 by voting NO on SCA 5.

WHY:

  • Lowering the two-thirds vote for education parcel taxes makes it easier to add new taxes that show up “below the line” on property tax bills and are not included in Prop. 13’s one-percent cap. This can add hundreds of dollars a year to residential and business property tax bills.
  • Parcel taxes are very regressive in that all property owners typically pay the same amount, regardless of the size of the home or business. Also, numerous parcel taxes have been approved since 2010 with a two-thirds vote; there’s no need to lower the threshold if voters are persuaded that the money is really needed.
  • While everybody gets to vote on parcel taxes, only property owners pay them. That’s why we must continue to demand a supermajority threshold to authorize debt or new taxes.

Please call the following Members of the Senate Government and Finance Committee and urge them to oppose SCA 5:

Senator Mike McGuire (Eureka, San Rafael, Santa Rosa, Ukiah)  Mr. McGuire is the Chair of the Governance and Finance Committee: 916-651-4002

Sen. Jim Beall (San Jose, Los Gatos): 916-651-4015

Sen. Bob Hertzberg (Los Angeles, Burbank, San Fernando): 916-651-4018

Sen. Melissa Hurtado (Fresno, Hanford, Sanger): 916-651-4014

Sen. Scott Wiener (San Francisco, Daly City): 916-651-4011

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Has the business community had enough?

By Jon Coupal | There is a particularly nasty YouTube video that made the rounds several years ago where a school punk was bullying another student who was overweight.  The punk kept punching the other kid who was forced to retreat until his back was against a wall.  After several punches, the overweight kid picked up the bully and slammed him to the ground so violently that the punk literally bounces off the pavement.

A weekly column by Jon CoupalFor decades, taxpayers in California have been the punching bag for tax-and-spend politicians and the special interests that consume tax dollars. Periodically, however, those receiving the blows stand up and punch back.  The recall of former Governor Gray Davis in reaction to his car tax increase is a good example.

For the most part, individual taxpayers and grassroots organizations are more vocal – at least publicly – against tax hikes than the business community.  Certain business interests, especially large corporations, are more likely to have a “go along to get along” attitude which means that as long as a tax increase doesn’t hit their business directly (or can be passed along to consumers), they won’t put up much of a fight.  The rationale for this is that many of these business interests are vulnerable to arbitrary government action that threatens their interests and it would be unwise to anger the politicians who could, with a stroke of a pen, put them out of business.

But the frequency and intensity of recent tax proposals out of Sacramento and from various city halls is causing pushback from even the business community. In the City of Los Angeles, the Los Angeles Unified School District jammed through a tax increase proposal that is an affront to taxpayers of all stripes. Measure EE, appearing on the ballot in a June 4th special election, would add hundreds of dollars to property tax bills and rents by imposing a tax of 16 cents per square foot of building improvements on properties within the district. That’s $160 for every 1,000 square feet. This would hit homeowners, renters and businesses with a huge new property tax increase.

To read the entire column, please click here.

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An open letter to California’s Senate Education Committee

By David Crane | Dear Legislators,

David CraneThere’s a scene in the Monty Python film Life of Brian in which a committee meets to discuss a resolution condemning Roman oppression while their hero, Brian, is being led to his crucifixion. A resolution wasn’t the sort of action Brian needed at that time. But at least he got a discussion.

The Senate Education Committee hasn’t even scheduled a discussion about a crisis in the state’s K-12 education system.

The Sacramento City Unified School District, which serves 42,000 students in the state’s capital city, has sent layoff notices to teachers and other staff to address a deficit. As the Sacramento Bee has pointed out in a series of articles, SacCity’s deficit is in large part the result of destructive financial practices that the legislature could — and should — prohibit. Just two common-sense reforms could close SacCity’s gap. Those same destructive financial practices are contributing to financial problems across the K-12 system despite a 60 percent increase in state spending on schools since 2010. If California schools are reducing staff in the tenth year of a bull market and after a 30 percent income tax increase, just imagine how they will act in a recession.

Yet the Senate Education Committee hasn’t even scheduled a hearing on SacCity. Instead, the agenda for the next session (April 24) not only does not address SacCity but includes as a “special order” the consideration of a moratorium on charter schools. Nowhere in the articles about SacCity’s financial distress are charters mentioned as a cause, and the governor has already created a special commission to evaluate charters that will report its findings July 1 — just over two months from now. While there’s not a single reason for the Senate Education Committee to act before the commission’s report, there are 42,000 reasons to act on the financial practices causing SacCity to reduce staffing. The same goes for the discriminatory seniority-based method by which the Education Code requires SacCity to issue layoff notices.

K-12 education is the legislature’s largest expenditure. The legislature writes the Education Code. The school district in the state’s capital city is laying off teachers in the tenth year of a bull market and after a 30 percent income tax increase. The Senate Education Committee should pay attention.

Here’s what a state takeover would mean at Sacramento City Unified School District:

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California Attorney General admits end to sham probe of OC Sheriff’s Department

By R. Scott Moxley, OC Weekly | On the homepage for his California Department of Justice (DOJ) website, Attorney General Xavier Becerra—a former Los Angeles congressional Democrat—laughably sells the notion he believes in exposing “systemic police misconduct.”

Xavier Becerra But in a quiet, corner Fullerton courtroom Friday, not on a stage before TV-news camera crews, a Becerra representative softly announced the DOJ has ended what it once touted as a serious probe of Orange County Sheriff’s Department (OCSD) corruption without taking even wrist-slap action.

Those of us who have followed the alleged investigation knew it was a sham from the outset precisely 1,499 days ago, in part, because a deputy attorney general, Theodore Cropley, sat idly through months of courtroom testimony that revealed deputies committed blatant perjury, destroyed exculpatory evidence and ran unconstitutional scams against pretrial defendants in a systemic fashion.

In the wake of that shocking inaction, the ruse of a formal DOJ probe began in March 2015, when U.S. Senator Kamala Harris served as AG, and has now finally died an embarrassing finale under the watch of Becerra.

Harris, who is running for the Democratic Party’s nomination to face President Donald Trump, essentially admitted to The New York Times earlier this year that her OCSD investigation was more of a publicity stunt because she didn’t want to use her office to reprimand tainted cops when, in her view, citizens should wait for an election and vote out leaders of warped agencies.

Becerra showed he, too, wasn’t interested in using his office’s powers to hold badged wrongdoers responsible when, ostensibly while the independent probe was ongoing last May, he held a happy, hamfisted campaign event at OCSD’s Santa Ana headquarters with the same officers who conducted cover-up operations for what became known as the jailhouse-informant scandal.

To read the entire article, please click here.

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Paid your taxes on April 15th? Take a breath — more may be on the way

By | April 15 was Tax Day, so now you’re probably breathing a sigh of relief.

Just don’t get too relaxed.

Loren KayeMore than $15 billion in tax increases – mostly aimed at business taxpayers – await hearings and decisions in the Legislature. If the tax proposals get that far (they require two-thirds approval by the Legislature), then new Governor Newsom will have his say.

California’s treasury is awash in surplus revenues, more than $13 billion when the Governor introduced his budget in January, which is on top of a nearly-filled Rainy Day Reserve. Economic growth signals remain strong. And we haven’t seen the last of budget-brimming Silicon Valley IPOs that will boost revenues even more.

The response to this bounty of good fiscal news? Raise taxes!

Record budget surpluses have been met with record tax increase proposals. Here’s just a taste:

Massive corporate tax increase. A state senator is proposing one of the steepest corporate tax increases ever contemplated in California. It would bring the top tax rate for some companies to an eye-popping 22.26%, about 150% higher than today’s rate. It would make the California corporate tax rate easily the highest in the nation.

Were this $5 billion tax increase to pass, California would have the highest or second-highest tax rates nationally for income taxes, corporation taxes, sales taxes and motor vehicle fuel taxes.

While the author means this bill to attack alleged wage disparities and foreign outsourcing, it would likely have little effect on those objectives and more likely have the easily-anticipated effect of harming workers in California or elsewhere in the United States.

While CEO compensation is a favorite topic of class warriors, this legislation ignores the enormous responsibility placed on these individuals to maintain or improve the success of a company that creates jobs for hundreds or thousands of workers, and value for thousands of shareholders, including pension funds.

Companies have also been reshoring jobs from overseas steadily since the beginning of the recovery, with more than a half million jobs returning since 2010 because of better access to skills, favorable transportation or marketing needs.

A $5 billion tax increase cannot just be waved away by corporate taxpayers. This bill would increase revenues from this source by about a third, but would fall on just a small percentage of corporate taxpayers. The malignant effects inevitably would include reduction of workforce or constraint in workers’ pay or benefits. Another outcome could be a reduction in the value of the company, which would affect shareholders. Note that more than 20 percent of household assets are in stocks, and retirement plans own a majority of corporate stock.

Corporate tax revenues in California are at record highs, having increased by 80 percent since 2012. Federal tax reform broadened the corporate tax base and has generated more revenues for the state, and on a parallel track, the Governor has proposed further conformity to the federal tax law to bring in even more revenues.

New taxes on food, farmers and innovation. Another Senator will be proposing to eliminate a dozen tax incentives and exemptions, raising at least $8 billion in general revenues. The key changes: (1) eliminating the sales tax exemption for meat and fish, for animal feed and medicine, and for plants, seed and fertilizer used for food production, (2) eliminating tax credits that encourage companies to create innovation in California, and (3) eliminating a longstanding separate tax benefit for small business pass-through organizations (called Subchapter S firms) to help the owners minimize double-taxation.

California hasn’t taxed food for generations, or what’s necessary to grow food, so now is the right time to hit low income consumers the hardest? That one is a head-scratcher.

This bill would also repeal the research and development tax credit, which rewards innovative activity in California, which in turn is the main engine for small business growth and the creation of well-paid, middle class jobs.

According to the Milken Institute, innovation is crucial for the creation of high-quality jobs and strong economic growth, and in the global race for innovation, California enjoys advantages that others envy. California’s research credit is a crucial part of the tax environment that businesses evaluate in choosing whether to site new research activity in California or in another innovation hub.

Exhumation of the California death tax. Repealed by voters in 1982, another state senator has proposed imposing a new inheritance and gift tax at a 35% rate, on estates valued at more than $3.5 million, up to the point where the federal inheritance tax kicks in. The tax would in effect step into the void vacated by the federal tax reform, which upped the estate exemption to $11.4 million . This bill would directly affect many small business and farm owners who seek to pass along their businesses to family. The tax base is not indexed for inflation, so as time goes on will capture more estates of lower value.

But wait, there’s more. In the category of products that are unpopular or unfashionable:

  • A new tax on sweetened soft drinks, targeting a single product to pay for health programs that have many causes and beneficiaries.
  • A new tax on oil and gas produced in California that will increase costs, prices, carbon emissions, out-of-state oil imports, and cut jobs in the hard-pressed San Joaquin Valley.
  • A new tax on pain-killer pharmaceuticals, which will increase costs and potentially reduce availability of drugs for some of patients who most need pain medication.
  • A new tax on tires to pay for water pollution that comes from many sources.

Lurking in the background and awaiting launch: a new tax on business services.

Loren Kay is president of the California Foundation for Commerce and Education.

[Cross-posted with permission from Fox & Hounds.]

Posted in California Legislature, Gavin Newsom, Taxes | Comments Off on Paid your taxes on April 15th? Take a breath — more may be on the way

Fullerton City Hall is closed today for another three-day weekend

City Hall Closure Dates and
Observed Holidays

2019
January –1*, 11, 25
February – 8, 18*, 22
March – 8, 22
April – 5, 19
May – 3, 17, 27*,31
June – 14, 28
July – 4*, 12, 26
August – 9, 23
September – 2*, 6, 20
October – 4, 18
November – 1, 11*, 15, 28*, 29*
December – 13, 24*, 25*, 26^,27^, 31*

*Holiday observed
^Winter Closure

Fullerton City Hall

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No, California’s finances are not back in the black

By Patrick Gleason, Forbes | It’s happening again. People who should know better are pointing to California’s current budget surplus as proof that the state, the world’s fifth largest economy, is in sound financial shape. That figure is also being used to support the claim that California’s relatively high tax burden and onerous regulations are not too problematic, as CNBC’s Robert Frank did on Squawk Box the morning after Tax Day.

Patrick GleasonThe surplus figure cited by Frank and others has two problems: it’s both misleading and paints an incomplete picture of the Golden State’s finances. The truth is that there is no revenue surplus had by California state government. In fact, the state’s long-run obligations far exceed projected revenue collections to the tune of $1 trillion in unfunded pension liabilities alone. When factoring in the cost of non-pension benefits for state workers, such as health care for retired government employees, the debt facing California taxpayers rises further.

“Combining California’s debt with publicly held federal debt, we estimate a total debt-to-GDP ratio of 125% (or 153% using the broader definition of federal debt),” California Policy Center report released in 2017 points out. “This level places California distressingly close to peripheral Eurozone countries that faced financial crises in 2011 and 2012. Portugal’s 2015 debt-to-GDP ratio was 129% and Italy’s was 133%.”

Bill Fletcher and Marc Joffe, authors of the California Policy Center report, breakdown how much of this debt each Californian is on the hook for and find a burden of “$33,000 per resident and $74,000 per taxpayer – excluding their share of federal debt.”

This massive unfunded pension liability, which California taxpayers are on the hook for, is something that state legislators in Sacramento continue to ignore, acting as though the problem will go away on its own (or, more likely, that the federal government will bail them out at the end of the day).

State and local unfunded pension liabilities are pegged at $5 trillion nationwide, with California accounting for about a fifth of that total. States where unfunded pension liabilities are the worst (states like Illinois, New York, and California) are the places where there is the least amount of political will and interest in addressing the issue.

To read the entire article, please click here.

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Watch last night’s city council meeting

To watch the six-hour meeting, click here.

Fullerton City Council Meeting

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