David Crane, a businessman who advised former Gov. Arnold Schwarzenegger on financial matters – particularly long-term public pension deficits – recently wrote an I-told-you-so piece for the Bloomberg news service about the State Teachers Retirement System.
He and others had postulated last year that if voters approved the sales and income tax hike being sought by Gov. Jerry Brown, they would see the money disappear into CalSTRS, rather than into classroom instruction, as Brown, et al., insisted.
CalSTRS is now seeking $4.5 billion a year in additional funds from someone – the state, local school districts or teachers themselves – to cover its projected pension obligations.
And as Crane points out, the $4.5 billion assumes that the trust fund can meet its "unrealistically high investment return assumption that implicitly forecasts the stock market to double every 10 years..."
The CalSTRS deficit is not new. Capitol politicians have been talking about it – but not doing anything about it – for several years.
Wednesday, May 01, 2013
From the major Sacramento newspaper: