California government workers asked the politicians in Sacramento to approve billions of dollars in retroactive pay increases, a retirement age of 50 and lifetime pensions of up to 90% of their final salary.
CalPers, the union representing the state workers promised Sacramento it wouldn’t cost the taxpayers “a dime” and that it would remain “fully funded.”
Indeed, CalPers estimated that as long as the Dow Jones hit 25,000 by 2009 and 28,000,000 (no typo, that’s six zeros) by 2099, the rate of return needed to fully fund these pensions and pay increases will be met.
Not needing the approval of the citizens of California and excited at the opportunity of securing ever more union votes, the Governor enthusiastically signed SB400 into law.
That was 1999.
Today the Dow Jones sits at 10,200…only 14,800 points shy of what CalPers based their math on, which is why the taxpayers of California have already cut checks to California state union workers in the amount of $15 billion with another check for $3.5 billion getting cut this year. There are many more checks to be written.
It would seem that SB400 failed to disclose that the citizens of California were on the hook to cover any losses to any California state workers retirement plans and that those losses could turn out to be hundreds of billions of dollars.
And in a glaring example of conflicts of interest, it turns out that the benefits being negotiated by the CalPers union would also benefit CalPers union employees and that members of the CalPers board had received contributions from the public employee unions that would benefit if SB400 was passed.
So as we continue to cut more checks throughout future years, that money will have to come from us in higher taxes, or from us in cuts to higher education, infrastructure improvements, public services, etc…
Either way, we pay. And we will be paying long after these workers are retired and sipping Mai Tai’s in Fiji.
Categories: Gov't Workers & Unions