California is at ground zero of a future financial implosion.
The number of people in the state collecting massive taxpayer funded pensions is simply unsustainable.
The Orange County Register reports:
California’s 100k club grows as tax hikes mount
Almost 80,000 retired public employees in California are drawing pensions in excess of $100,000 per year, according to an analysis of 2018 pension payout data by Transparent California. The $100,000 club members collected 20 percent of the $51.7 billion in total public pension payments made last year in California.
Both the number of six-figure pensions and the total payout were new record highs. If public pensions were a competitive sport, California’s trophies would weigh enough to sink the state…
Why do voters approve tax increases? The ballot language of Measure C in South Pasadena was typical of the genre:
“To maintain 9-1-1 emergency response times, including to home break-ins and thefts; neighborhood, school and park police patrols, fire/paramedic services, fire station operations, emergency preparedness; retain/attract local businesses; maintain streets/infrastructure; provide other general services and maintain City finances, shall the City of South Pasadena establish a 3/4¢ sales tax providing approximately $1,500,000 annually until ended by voters, all funds remaining in South Pasadena?”
The word “pension” is never mentioned, because pension obligations have first call on the tax revenue already collected, pulling money away from priorities listed in the ballot language.
Reason has more on this:
In a related story, more than 20 cents of every dollar spent by the Los Angeles city government now goes to fund the retirements of former employees. “The city’s general fund payments for pensions and retiree healthcare reached $1.04 billion last year, eating up more than 20% of operating revenue—compared with less than 5% in 2002,” the Los Angeles Times reported last year.
Previously, Transparent California had only collected data from the state’s two largest pension funds: CalPERS, which pays retired public workers, and CalSERS, which pays retired teachers. The newest update includes data from the state university retirement system and local pension funds from several big cities, including Los Angeles, where some of the highest payouts occur.
The more comprehensive data reveal nearly twice as many $100,000 pensions. Using last year’s data, Transparent California said Michael Johnson, a former Solano County administrator who received a $388,407 pension, was the highest-paid government retiree in the state. This year he does not even crack the top 100, a group dominated by Los Angeles police and fire retirees along with a handful of former San Diego city employees.
As the old saying goes, something that can’t go on forever, won’t.
At some point, California is going to run out of things and people to tax.
Cross posted from American Lookout.