California 'Hell-Hole' to Run $7 Billion Budget Surplus

[Frodo]

California Agency Predicts $7 Billion State Budget Surplus
A report says California’s savings account could grow to more than $18 billion by the end of 2021

[dead0man]

California’s State and Local Liabilities Total $1.5 Trillion

Our findings may appear to contradict reports that suggest a state budget surplus of about $9 billion. But the state’s spare cash and rainy day funds pale before the mountain of long-term liabilities that California governments at all levels have accumulated. Moreover, if the stock market drops, personal income tax and capital gains tax revenue will decline precipitously, wiping out these surpluses.

Our analysis differs from government reporting in a few ways, the most significant of which is governments’ use of a very generous expected rate of return on their pension fund investments. Using a more accurate rate, we calculate the total of unfunded pensions in California at $846 billion – $530 billion more than the official estimate of $316 billion. But even using only the officially reported estimates, California’s state and local governments are about $1.0 trillion in debt.

[Sir Mohamed]

Gavin Newsom, my gov

[DINGO Joe]

California’s State and Local Liabilities Total $1.5 Trillion

Our findings may appear to contradict reports that suggest a state budget surplus of about $9 billion. But the state’s spare cash and rainy day funds pale before the mountain of long-term liabilities that California governments at all levels have accumulated. Moreover, if the stock market drops, personal income tax and capital gains tax revenue will decline precipitously, wiping out these surpluses.

Our analysis differs from government reporting in a few ways, the most significant of which is governments’ use of a very generous expected rate of return on their pension fund investments. Using a more accurate rate, we calculate the total of unfunded pensions in California at $846 billion – $530 billion more than the official estimate of $316 billion. But even using only the officially reported estimates, California’s state and local governments are about $1.0 trillion in debt.

So, there is some magical place in America that doesn't carry bond debt (for schools and sewers and roads and what not) or have retirement obligations?  Jeez, I can only imagine what the debt of the US Military is based on their retirement and healthcare obligations alone.

Kudos to Cali for running a budget surplus, certainly not something Trump can do.

[dead0man]

California’s State and Local Liabilities Total $1.5 Trillion

Our findings may appear to contradict reports that suggest a state budget surplus of about $9 billion. But the state’s spare cash and rainy day funds pale before the mountain of long-term liabilities that California governments at all levels have accumulated. Moreover, if the stock market drops, personal income tax and capital gains tax revenue will decline precipitously, wiping out these surpluses.

Our analysis differs from government reporting in a few ways, the most significant of which is governments’ use of a very generous expected rate of return on their pension fund investments. Using a more accurate rate, we calculate the total of unfunded pensions in California at $846 billion – $530 billion more than the official estimate of $316 billion. But even using only the officially reported estimates, California’s state and local governments are about $1.0 trillion in debt.

So, there is some magical place in America that doesn't carry bond debt (for schools and sewers and roads and what not) or have retirement obligations?  Jeez, I can only imagine what the debt of the US Military is based on their retirement and healthcare obligations alone.

California is rather exceptional here though.  Forbes

The most notable example of this occurred in 1999. Senate Bill 400 passed that year in California. SB 400 granted tens of billions of dollars in retroactive increases to pension benefits on the assurance from the nation’s largest government pension system, the California Public Employees’ Retirement System (CalPERS), along with the state’s powerful government labor unions, that the state’s main pension plans were overfunded by as much as $17.6 billion.

The fund was in good shape at the time, as it was heavily invested in the Dot.com boom on Wall Street. The boom went bust soon after the higher benefits were granted with the 9-11 attacks following on soon after. In less than two years, California’s massive pension system was seriously in the red.

<snip>

Pension Tracker has collected data from around the nation, and in California specifically, has gathered information from more than 1,200 counties, cities, and special districts to determine that the total market pension debt in California is more than $1 trillion, or $78,334 per household, the second-highest in the nation after Alaska. Nationally, Pension Tracker calculates the total pension debt on a market basis at $5.2 trillion, or an average of $43,179 per household.

[DINGO Joe]

So what your saying is Alaska is really screwed?

[McNukes™ #NYCMMWasAHero]

They should spend it on mitigating and extinguishing fires. I'd ordinarily say they should spend it on their debt, but the former takes priority.

[slothdem]

Wow. Jerry Brown is one of the best governors of any state in the history of this country, and it looks like Newsom is going to be nearly as good. California is just an absolute behemoth of a state. It will never stop dominating.

[Amenhotep Bakari-Sellers]

The state beautified Hollywood, while massive Homelessness is a problem in Cali, it's still the best place to live due to plentiful jobs; however, the rents are too high, especially in North California

[President Johnson]

But, but... Republicans are the party of fiscal discipline.

[Old Man Willow]

Conservatives label CA a hell hole because of demographics and nothing else. You never hear them complain about quality of life in WV, KY, OK, KS, ect.

[ProudModerate2]

Conservatives label CA a hell hole because of demographics and nothing else. You never hear them complain about quality of life in WV, KY, OK, KS, ect.

Conservatives are jealous.
If California was a nation, its economy would be ranked 5th in the entire world, just ahead of the United Kingdom.

[Coastal Elitist]

Completely misleading for the reasons dead0man said. Also if it's so great how come there are homeless people everywhere and people leaving the state because they can't afford it. Not to mention the fact that Newsom has an approval rating in the 40s and the state legislature has an even worse approval rating than that.

The truth is we have massive bond debt and a massive pension problem that gets overlooked because muh surplus.

Overall the state isn't a hellhole. However major cities have a tendency to be, because they are filled with homeless people living on the street. I no longer take BART in the bay area because you're likely to get robbed or a homeless person will be pissing on the train. It's not a great place to live. Although there are still some good areas.

I don't know how anyone can look at the past years of democratic control in California and come away with the thought that yeah this has been good we're doing great.

[Libertas Vel Mors]

Wow. Jerry Brown is one of the best governors of any state in the history of this country, and it looks like Newsom is going to be nearly as good. California is just an absolute behemoth of a state. It will never stop dominating.

More than a million people have left the state in recent years, we are set to lose a CD for the first time in our entire history, we have the highest taxes in the whole nation, ridiculous zoning and labor laws, horrible schools, a deteriorating infastructure, and a massive homeless problem, but yes, please do tell us about how great things are going here.

[Libertas Vel Mors]

Completely misleading for the reasons dead0man said. Also if it's so great how come there are homeless people everywhere and people leaving the state because they can't afford it. Not to mention the fact that Newsom has an approval rating in the 40s and the state legislature has an even worse approval rating than that.

The truth is we have massive bond debt and a massive pension problem that gets overlooked because muh surplus.

Overall the state isn't a hellhole. However major cities have a tendency to be, because they are filled with homeless people living on the street. I no longer take BART in the bay area because you're likely to get robbed or a homeless person will be pissing on the train. It's not a great place to live. Although there are still some good areas.

I don't know how anyone can look at the past years of democratic control in California and come away with the thought that yeah this has been good we're doing great.

You're from the Bay Area too? Peninsula gang, or somewhere else?

[Badger]

The totally jelly so-called fiscal conservatives in this thread are hilarious

[Coastal Elitist]

Completely misleading for the reasons dead0man said. Also if it's so great how come there are homeless people everywhere and people leaving the state because they can't afford it. Not to mention the fact that Newsom has an approval rating in the 40s and the state legislature has an even worse approval rating than that.

The truth is we have massive bond debt and a massive pension problem that gets overlooked because muh surplus.

Overall the state isn't a hellhole. However major cities have a tendency to be, because they are filled with homeless people living on the street. I no longer take BART in the bay area because you're likely to get robbed or a homeless person will be pissing on the train. It's not a great place to live. Although there are still some good areas.

I don't know how anyone can look at the past years of democratic control in California and come away with the thought that yeah this has been good we're doing great.

You're from the Bay Area too? Peninsula gang, or somewhere else?

I grew up in the Tri-Valley where it used to be affordable to live.

[OSR stands with Israel]

California is a boom bust state , during good economic times it has surpluses and during bad it not only has deficits but massive ones .


Happened in the early 80s, early 90s , early 2000s and from 2008-2012 .

[R.P. McM]

California’s State and Local Liabilities Total $1.5 Trillion

Our findings may appear to contradict reports that suggest a state budget surplus of about $9 billion. But the state’s spare cash and rainy day funds pale before the mountain of long-term liabilities that California governments at all levels have accumulated. Moreover, if the stock market drops, personal income tax and capital gains tax revenue will decline precipitously, wiping out these surpluses.

Our analysis differs from government reporting in a few ways, the most significant of which is governments’ use of a very generous expected rate of return on their pension fund investments. Using a more accurate rate, we calculate the total of unfunded pensions in California at $846 billion – $530 billion more than the official estimate of $316 billion. But even using only the officially reported estimates, California’s state and local governments are about $1.0 trillion in debt.

Relative to what? is the question. Here's an answer:

https://www.pewtrusts.org/en/research-and-analysis/data-visualizations/2014/fiscal-50#ind4

CA does have above-average unfunded liabilities. However, the state also has a higher capacity to absorb them via robust economic growth. So while LA, AL, MI, WV, RI, NY, PA, VT, etc., currently have less debt, they're arguably in much worse fiscal shape. To say nothing of AK, IL, NJ, CT, NM, KY, etc.

[DrScholl]

Are there any conservative states that have a surplus? It's amazing that blue avatars are finding a way to turn a surplus into a negative. California has problems, but it still is more fiscally sound than other states with lots more jobs.

[Beet]

California is a great state if you're a right-wing, Koch brothers, balanced budget type guy who loves Peter Thiel and Mark Zuckerberg.

It's a horrible state if you're an economic progressive who likes income/wealth equality and affordable housing.

However, it's full of liberal types who vote Democrat. Conservatives feel obligated to dislike it when they should love it, liberals feel obligated to like it when they should hate it. Hence why everyone is so confused.

[HillGoose]

CA will be Republican again when President Liz Cheney fills SoCal up with defense contractors

[HillGoose]

California is a great state if you're a right-wing, Koch brothers, balanced budget type guy who loves Peter Thiel and Mark Zuckerberg.

that slaps brah

[OSR stands with Israel]

Are there any conservative states that have a surplus? It's amazing that blue avatars are finding a way to turn a surplus into a negative. California has problems, but it still is more fiscally sound than other states with lots more jobs.

https://www.mercatus.org/publications/urban-economics/state-fiscal-rankings

[John Dule]

Conservatives label CA a hell hole because of demographics and nothing else. You never hear them complain about quality of life in WV, KY, OK, KS, ect.

No. We call it a hellhole because it's prohibitively expensive in most metropolitan areas due to terrible zoning laws and rent control, which traps the working poor in a situation where they spend a huge percentage of their earnings on rent and gas. Oh, and violent drug addicts wander the streets in the cities. I love my state, but the people in this thread trying to pretend that it's some sort of progressive Xanadu (just because the government collects a lot of revenue from techies) are definitely not well-informed with regards to what it's actually like to live here.