Dan Walters

Dan Walters

By Dan Walters
Published: Sunday, Nov. 17, 2013 – 12:00 am

Public employee union propaganda notwithstanding, California has a serious public pension problem.

Or, more precisely, cities and some fire districts have a pension problem because they spend so much of their budgets on highly paid, high-pension police and firefighters.

Pension obligations are consuming ever-larger portions of those budgets, squeezing out money for other services. Payments into the state’s public pension fund played central roles in the bankruptcy of three cities and the one that has emerged from bankruptcy, Vallejo, is already back in distress.

Cities are in this pickle because of a perfect storm of shortsighted decisions.

Fourteen years ago, at the behest of the California Public Employees’ Retirement System and unions, then-Gov. Gray Davis and the Legislature sharply increased state pension benefits, relying on CalPERS’ assertions that strong investment earnings would pay for them without additional money from taxpayers.

Throughout the state, local government officials in thrall to their unions followed suit. But CalPERS’ assurances turned to dust when its relatively risky real estate and equity investments turned sour, costing tens of billions of dollars.

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