CalWatch: Despite a sounder economic footing, California’s pensions problem has deepened. That was the conclusion drawn by analysts who warned that new accounting rules would shine a startling spotlight on practices long kept in the shadows.Note, even though pensions earned nearly 10% YoY on the market, governments could not keep up. Now the market is neutral, pension funds are reporting 1-2% YoY gains. Meanwhile the economy is not at 1.8% GDP growth, not 2.3. So that 17/4 ratio will go to 23/3; the denominator and numerator both change.
“The Governmental Accounting Standards Board is implementing new rules that require governments, for the first time, to report unfunded pension liabilities on their 2015 balance sheets,” Lawrence McQuillan noted at the Sacramento Bee. “Overall from 2008 through 2012, California local governments’ pension spending increased 17 percent while tax revenue grew only 4 percent.”
Are the taxpayers on the hook when their elected officials cheat?
So the NASB accounting board is bring new rules that make it difficult for Matir County's crooked politicians. We have had the same problem under Grey Davis, pension stuffing in county government.Critics have pointed to evidence of a pattern of conduct in masking pension costs. As Steven Greenhut has observed, a grand jury investigation into Marin County pension practices produced a recently issued report with damning details:“The county’s governments increased pension benefits 38 times between 2001 and 2006. Each time, agencies were supposed to provide public notice about the proposed changes, obtain actuarial reports detailing the future costs of the benefit hikes, and detail the degree to which the increases will affect the funds’ financial conditions.”Instead, officials “violated these requirements in a variety of ways — providing little, if any, notice to the citizens of Marin County that they would be responsible in the future for hundreds of millions of dollars in pension costs,” the report concluded.
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