The State Worker
Chronicling civil-service life for California state workers
August 1, 2011

A proposed initiative that would require the state’s public sector pension systems to maintain at least 85 percent of their investments in California-based businesses would weaken returns and fail to spur significant economic activity in the state, according to the Legislative Analyst’s Office.

In a report released last week, Legislative Analyst Mac Taylor and state finance director Ana Matosantos wrote that the proposal “most likely” would cause investment returns to fall “because the measure would require a huge concentration of investments in one economic market–California–that is responsible for only about 3 percent of world economic output.”

They added, “While this measure is intended to increase economic activity in California, it seems uncertain that it would result in such an increase over the long term.”

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