Yet another reason to leave California while you can

On the heels of learning that three California cities either have, or are considering filing for bankruptcy, yesterday’s USA Today had an interesting blurb on Calpers, California’s pension trust fund.  I will quote it in its entirety.

The nation’s largest public pension fund reported a dismal 1% return on its investments, a figure far short of projections that will likely add pressure on California’s state and local governments to contribute more, officials said Monday.  The California Public Employees’ Retirement System reported its returns for the fiscal year that ended June 30.  The return is well below its projected annual return of 7.5%. [emphasis supplied]

Let’s break this down.

First, how can any responsible entity project annual returns of 7.5% in this economy?  I suppose anyone can project anything, but the key word in that question was “responsible”.

Second, because of this, I’m sure, “unexpected” shortfall, there will be “added pressure on California’s state and local government to contribute more”.  Of course they will have to contribute more.  How else do you make up for the millions of dollars of “shortfall” caused by the ridiculous assumptions used by the state?

And finally, where will those “more contributions” come from?  The state doesn’t print money.  It can’t borrow the money, as very few, if any, sane people would lend California the money for this purpose.  And, from a state that just approved a high speed rail (that it can’t afford) from nowhere to nowhere, it’s not likely California will cut its spending to make up the shortfall.

Oh, wait, I forgot, the taxpayers will do it.

California isn’t alone.

Call your governor’s office and ask three simple questions.  How much did you project your public employees’ pension fund would earn its last fiscal year?  How much did it earn?  And, how do you propose to make up the shortfall?

That should be an interesting conversation.


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The Sound Off Sister was an Assistant United States Attorney for the Southern District of Florida, and special trial attorney for the Department of Justice, Criminal Division; a partner in the Florida law firm of Shutts & Bowen, and an adjunct professor at the University of Miami, School of Law. The Sound Off Sister offers frequent commentary concerning legislation making its way through Congress, including the health reform legislation passed in early 2010.


  1. Dimsdale on July 18, 2012 at 6:56 pm

    What is the old business/investing adage?? “Past performance is not guarantee of future results”?
    Unfortunately for California (soon to be the New Greece), continued political stupidity is a guarantee of future failure.

  2. JBS on July 18, 2012 at 6:56 pm

    “As? California goes, so goes the country.” Westbrook Pegler, not the most popular man to quote, but his quip certainly sums it up.

    • Dimsdale on July 18, 2012 at 7:00 pm

      If so, hang on tight.? The swirling will make you dizzy!

  3. Dimsdale on July 18, 2012 at 6:59 pm

    As an interesting aside,? the Massachusetts legislature recently passed legislation that allows people on the Optional Retirement System (ORPS) (alternate retirement system with employee contributions with state match) to “buy into” the state’s guaranteed benefit system, which is in pitiful shape as is CT’s.
    Needless to say, I am staying in ORPS.

  4. JollyRoger on July 19, 2012 at 2:38 am

    I’d been hearing all my life that California was gonna to fall into the ocean…? I didn’t realize this was an allegory for bad fiscal policy.?? I guess global warming kicks in when we start burning our dollars just to keep warm?

  5. ricbee on July 19, 2012 at 8:15 am

    Never a thought to cutting benefits is there? Just build & spend more,a railway or a busway it’s amazing how they all think alike. I belong to a private national organization that thinks just like them-being based in NYC may have something to do with it.

  6. Murphy on July 19, 2012 at 8:57 am

    Ayup JollyRoger, California’s been underwater for years, they’re just too stoned to notice.

  7. JBS on July 19, 2012 at 9:03 am

    Was it Will or Buckley who said, “California is the sick man of the Republic?” California certainly embodies most, if not all, of the accomplishments of the Progressives. Its state flag might well feature a very sad donkey.

  8. sammy22 on July 19, 2012 at 6:13 pm

    I wonder why the population of California is growing twice as fast as that of Connecticut.

    • Dimsdale on July 19, 2012 at 6:30 pm


  9. sammy22 on July 19, 2012 at 9:21 pm

    But why are they not coming to CT, if CA is so bad?? Maybe to work on the high speed rail?

    • Lynn on July 20, 2012 at 6:58 am

      I think they are not coming here because of the cold and snow.

    • Dimsdale on July 21, 2012 at 11:17 pm

      New Haven.

  10. Benjamin Less on July 19, 2012 at 10:10 pm

    Two words.? “Medical Marijuana.”?? Once the State of California lights up in public unity, growing, packaging and selling this medicinal herb to its very needy and in pain population there will be billions trillions zillions over flowing the government coffers.? Each bud grown in the heights of attics and deep within citizens basements, sold, groomed, rolled and toked will elevate the State to a level of complete utopia/euphoria.? The State taxing weed will save all mankind.?
    It’s alright.
    Everything will be alright.
    It will be okay.

  11. JollyRoger on July 20, 2012 at 2:49 am

    Population only appears to be growing in CA because they’re letting so many criminals out of prison right now- as mandated by the supreme court in order to improve conditions inside the prisons…? Or are they being released because there’s an election coming up?

  12. sammy22 on July 20, 2012 at 11:19 am

    Hey, Benjamin Less. Check this out:

  13. PatRiot on July 23, 2012 at 8:21 pm

    hmmm.?? Is there a legal precedent that states a person is?obligated NOT to give money to a person or group(i.e.: either party)?that has a proven track record of finacial mismanagement?

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