Tuesday, October 8, 2013

Dan Walters: California’s cities face pension woes

From the Sacramento Bee. Vallejo is a mess:

When Vallejo ended its sojourn through bankruptcy in 2011, it was paying CalPERS $11 million a year – about 14 percent of its budget – but it’s now $15 million, or 18 percent, and growing.

“Now we have to figure out a way to pay for these new CalPERS rates,” Vallejo’s finance director, Deborah Lauchner, told the Reuters financial news service. “Every time we react to the last rate change they impose, they come up with another one. I understand they want to improve their funding status, but it’s on the backs of the cities.”

While Deis may be proud of avoiding Stockton pension cuts, the underlying problem is still unresolved.

Voters may weigh in next year on a proposed state ballot measure that would allow local governments to cut future pension benefits they cannot afford.

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