In Libtopia, all things are wonderful and all things are free. In the liberal Bay Area, it’s another story.
Cities across the region are making financial cuts now, and planning to fend them off in the future. Simply put, more money cities, school districts and agencies would spend on other things must now be channeled to CalPERS and employee and retiree pensions. This is happening because of shortfalls in CalPERS’ other main income source, its financial investments. Those lower returns, a recent trend, loom as a larger problem in coming years.
Eva Spiegel, spokeswoman for the League of California Cities, said CalPERS is lowering the average expected investment return on its investment portfolio — called the “discount rate” — from 7.5 to 7 percent over the next three years. It’s happening over three years, she said, to help blunt the pain and to allow for more budget planning.
A League survey in 2016 showed that, among the 240 California cities and towns that responded, 26 percent said the impact of these added CalPERS pension payments will be “extremely high,” while another 42 percent rated the impact on their budgets as “high.”
Source: East Bay Times
Categories: Sacramento Update