Health teacher Rich Ceriale in his remodeled classroom at San Marcos High School funded by Bond Measure Q (Aug. 23, 2012).

Paul Wellman

Health teacher Rich Ceriale in his remodeled classroom at San Marcos High School funded by Bond Measure Q (Aug. 23, 2012).

Ticking Time Bond

School Districts Gambling with Risky Bonds?

Thursday, December 6, 2012
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The latest in the long list of creative financial instruments to gobsmack the public since the Great Recession struck in 2008 is a municipal bond called a capital appreciation bond (CAB), which gained attention recently with reports that the Poway school district in San Diego County has saddled its taxpayers with almost a billion dollars in future debt by issuing them. In the past five years, these bonds have been increasingly employed by districts throughout California, including several in Santa Barbara County.

In the coming weeks, the county Auditor-Controller’s Office will, along with the County Education Office, perform an analysis of CABs issued by Santa Barbara districts, according to officials from both agencies. “There isn’t anything we can do about them because they have been approved by voters,” said Wendy Shelton, director of communications for the County Education Office, “but we can be aware of them.”

Unlike typical municipal bonds, CABs do not have to be paid off for several years, often decades, during which time interest compounds and is due along with the principal. Poway will have to pay $877 million in interest on a $105-million principal. Ed Price, Santa Barbara County property tax manager, explained, “What made those particularly frustrating was that they weren’t callable,” meaning that the district could not pay them off early and avoid some of the interest.

According to a Los Angeles Times–compiled database, the Santa Barbara Unified School District has issued about $26 million worth of CABs as part of Measure Q and R bond measures passed in 2010. It has also issued conventional bonds as well as convertible CABs that revert to conventional bonds after a certain number of years.

The decision to issue CABs is based on the gamble that assessed values will increase enough to cover that interest, a gamble that, as the recent recession has proved, can be a losing proposition. Price said he is not a fan of CABs. Meg Jetté, business chief for the Santa Barbara schools, feels confident that, in the long term, property values in Santa Barbara will increase.

CABs also allow districts to circumvent Proposition 39, passed in 2000, which made it easier for districts to pass bond measures but limited the amount of property tax that can be levied. Meanwhile, schools have faced constant cuts over the past four years. “If you don’t have enough in the bank, and you aren’t going to raise tax rates, then you resort to a CAB,” said Sandra Doria, business manager for the Hope Elementary School District. In 2010, Hope district voters approved $8-million Measure L, but because of declining property values, only $3 million worth of bonds — all CABs — could be issued.

Measure L has funded the installation of 234 kilowatts of solar panels on all three Hope campuses. In the Santa Barbara district, bond proceeds have paid for projects like repairing play areas at elementary schools, adding a new wing on the San Marcos High School campus that replaced eight deteriorating portable classrooms, and replacing the HVAC system at Dos Pueblos High School. The portion of the measures funded by CABs will mature in 30 years, at which point taxpayers will owe $148 million, a combined 5.7 times the principal. “CABS are like a homeowner waiting to add an addition to their home,” said Jetté, “pulling equity out of it and extending the loan out 30 years.”

But these delayed maturity dates beg the question of whether the districts have quite literally mortgaged the children’s futures. Districts need to think, said Price, about whether raising tax rates would be a better way of financing projects than capital appreciation. “I don’t envy [schools],” he said, “because they have a heartfelt need.” But he also wonders, “Do they miss some of the nuances of these financing deals that can be quite complex? People selling bonds are out to make money, not necessarily to protect the taxpayers or districts.”

Whether or not districts understand the financing arrangements into which they enter, the public is much further in the dark. While voters approve bond measures, they leave the financing up to districts. Ballot measures do not ask voters to weigh in on such details. That responsibility lies with school officials, who have to balance the educational needs of children with the long-term fiscal health of their communities.

Aside from the Hope and Santa Barbara districts, the Lompoc, Cold Spring, Buellton elementary, and Allan Hancock college district have all issued CABs.


Independent Discussion Guidelines

Who was on the SB school district board of trustees when they passed the Measure Q and R CAB's? Please can you detail exactly what they will cost taxpayers, if they do not convert to conventional bonds.

Any voters remember getting this explosive detail explained to them with precise projected facts and figures, instead of typical flowery words it was "for the children" and you are a malcontent who hates children if you do not pass these bonds?

Caveat emptor when it comes to school boards demanding you pass public school bonds "for the children". Guess who gets stuck with the massive future tax bills -- the children. Okay, but they were not age of consent to have agreed to this future explosive tax burden. The adults in charge should have known better than gamble their future.

Oblati (anonymous profile)
December 6, 2012 at 6:31 p.m. (Suggest removal)

Moreover, whenever these bonds pass, the schools are still broke and Johnny still can't read.

billclausen (anonymous profile)
December 6, 2012 at 6:39 p.m. (Suggest removal)

These CAB bonds are the subprime mortgages of the muni-bond industry. We criticized Wall St. and the too big to fail banks for the same thing these municipalities are doing to themselves.

We can expect that when these CAB bonds come due, the municipalities will be coming back to the taxpayer crying for more.

Botany (anonymous profile)
December 7, 2012 at 5:35 a.m. (Suggest removal)

Who was on the school board in 2010 when these explosive CAB bonds were passed? Heron, Deacon, Cordero, Parker, Limon?

Ed, I think you have some 'splainen' to do. We know Deacon, Parker, Cordero and Limon were solidly in the pockets of the unions, but Ed you were our go-to, independent fiscal conservative, right?

Additionally, there is no longer information on the property tax bill who to contact for seniors to opt out of parcel taxes A and B.

You now need to contact the SBUSD office to obtain the parcel tax exemptions forms. You have to search the SBUSD website long and hard to even find the email request person. This is an annual requirement.

Make this parcel tax opt-out a New Year's resolution, seniors. Get your school board members to budget more responsibly than always have their hands in your fixed-income pockets. Put your school boards on a fixed income as well by turning down all future parcel taxes.

Even if your landlord "pays" for this and not you, ask him/her to opt out if qualified so these charges do not get passed on to you with rent increases.

Oblati (anonymous profile)
December 7, 2012 at 11:54 a.m. (Suggest removal)

It's what happens when you think wall St. is the answer to what ails.

Ken_Volok (anonymous profile)
December 7, 2012 at 12:05 p.m. (Suggest removal)

But we need to help the poor children at any cost and without logic. Don't we?

italiansurg (anonymous profile)
December 7, 2012 at 2:25 p.m. (Suggest removal)

IS - Well if don't vote for every spending measure that throws money at the problem, you must hate children then.

Botany (anonymous profile)
December 7, 2012 at 3:03 p.m. (Suggest removal)

Apparently in the final shakedown Prop 30 will pay only for school employee's COLA. So much for Prop 30 being "for the children".

Nope, it was for the adults. Now hopefully teachers will no longer take out their bad morale on the children. At least for a while, until they stick their hands out again or else the "children will suffer".

Cal Facts online: State already spends $11,000 per student in California. 50% of your state income tax dollars already go to education. Add the 10 additional local SBUSD property taxes on your current tax bill and ask what amount will ever be enough "for the children".

State teachers unions refused federal education dollars Obama has been handing in his "Race to the Top" education accountability program. California teachers were among only a few other states who refused the reforms required to get these federal dollars. No wonder California has less money than other states.

Remember this when your teachers come begging to increase your taxes "for the children". Tell them you already gave at the office and they need to apply for this money, instead of being among the few states who have rejected education reform required to get those extra dollars.

No wonder teachers whine other states pay their teachers more. Those "other states" accepted the reforms in order to get that extra money. But nooooo, California teachers living in their self-imposed cocoon chose instead to raise your taxes .... for the children.

Something is wrong with this picture. Passing Prop 30 and Measures A and B was not the solution. Voters, please ask for education reform and accountability next time instead of blindly shelling out more money..... for the children.

Oblati (anonymous profile)
December 7, 2012 at 4:06 p.m. (Suggest removal)

Oblati, Italiansurg and Botany, remember this: All public school teachers are perfect. Whatever they say, you must believe. They are always right and if you don't support every bond measure they propose (even if the money doesn't actually make the schools better) then you hate children. Got it?

billclausen (anonymous profile)
December 7, 2012 at 7:06 p.m. (Suggest removal)

I love the Santa Barbara mentality towards teachers and public education.

You want teachers to be, not just teachers, but nurses, social workers and day care supervisors. You want teachers to have at least a master's degree so they're qualified to basically raise your kids (and too bad if the cost of college is such that teachers now carry a substantial debt after graduating). And with the limited amount of parenting you've done, you've raised your kid to act like a spoiled, self-entitled brats who think they're owed the world.

You want and done all of this - but you don't want to pay for any of it Classy...

EatTheRich (anonymous profile)
December 8, 2012 at 8:01 a.m. (Suggest removal)

Below is the contact information for the Senior Exemption. Every year the School District advertises in local papers the information about how and where to obtain this information prior to the deadline. Hopefully Seniors will think about the benefits of education in our community and the additional programs these funds provide to children prior to making any decision to request an exemption.

Senior Citizen Tax Exemption Applications: The senior citizen tax exemption applications will be available in January 2013. Please contact Alma Flores,, to request to have the application e-mailed to you when it is available.

I intend to ask the School Board to discuss the issues brought forward in this article as part of any decision to sell additional bonds.It should be pointed out that a large proportion of the District's bonds are not of the type described. If we are to maintain and renovate our 179,000 square feet of school buildings our options are fairly limited. Call me 687-7639 or email me anytime if you have questions or suggestions. School Board Member

EdHeron (anonymous profile)
December 8, 2012 at 10:40 a.m. (Suggest removal)

Well you can't beat that for outreach and accessibility.

Ken_Volok (anonymous profile)
December 8, 2012 at 1:17 p.m. (Suggest removal)

I want teachers to teach and it does not take rocket scientists to teach the three "R's" to at least K-8.

Parents need to do the rest and think whether than can meet and honor this full parenting obligation before they procreate or stupidly invest their procreative liabilities with the wrong partner who fails to honor this mutual obligation..

How about if we get back to celebrating the intact, stable two parent family (any gender) who responsibly raises and cares for their own children and only when they are financially ready to do so.

Impossible you say? Nope, that is the way it used to work a few decades ago when K-12 actually educated students and did not get bogged down and unfocused with all this extra-curricular stuff that belongs squarely back in the parent's laps.

("a few years ago" = before the rise of the nanny state, recreational drugs and free sex)

Thank the Democrat buddies in the entertainment media for celebrating irresponsible single parenthood, bratty entitled attitudes, excessive consumption, and the rise of the greedy teachers unions for changing the entire face of both parenthood and education that we suffer from today.

No, it does not take two incomes to raise a responsible family. Plan and budget before you boink remains the best way.

And wouldn't you know it. We pass three new taxes for teachers and before the ink is already dry we have EatTheRich who claims teachers are already over-worked, under-paid and under appreciated. And blaming "them" for these self-inflicted travails. It never ends, folks. It never ends.

Here is an offer you should stop refusing, and listen up Ed Heron too: Accept federal Race to the Top dollars like 46 other states and accept the required reforms in order to get that money. But get out of my pocketbook. Oh, that's right now all the sudden teachers don't like the nanny state and want to keep their "independence"/ Got it?

I suggest all seniors opt out of all parcel taxes until California teachers stop turning down federal education dollars they now leave on the table because refuse the accountability that comes along with that money.

Heron, take that to the bank since you asked for suggestions. In one year, get SB schools qualified for federal Race to the Top dollars California teachers have been turning down for far too long because of their refusal to reform their own failed educational practices.

Ed, please put this request on the next SBUSD agenda and start this process ASAP.

Oblati (anonymous profile)
December 8, 2012 at 3:44 p.m. (Suggest removal)

When all else fails blame show business. Yawn.

Ken_Volok (anonymous profile)
December 8, 2012 at 6:15 p.m. (Suggest removal)

Sorry Ken, I have to agree with Oblati on this one. The entertainment industry has been a part of the cause-and-effect here. In my view, Oblati articulates the problem well. The fact is, we once had an education system that worked, so let's look at what worked, and not be afraid to take the best of the past as a positive vehicle to the future.

billclausen (anonymous profile)
December 8, 2012 at 9:35 p.m. (Suggest removal)

The education system worked when we did not demand every student be college prep. That drags down everyone - dumbs down for those who do want to go on to higher education after college, and bores those who do not.

Junior colleges pick up the slack if someone later wants to go to college instead.

But we are missing a bet not training those to go into the workforce with valuable skills, work ethic and hands-on talents that cannot be outsourced.

Quite frankly, America cannot compete with global intellectual resources, but it still can produce efficient and innovative products of quality the world clamors for. Which is why we need to keep our defense spending up to control global shipping lanes that in turn controls the economic flow of goods.

Hand-on skills is the wave of the future for our students -- not sending them on for more French Literature degrees. No wonder so many college grads can't find jobs. They never get taught a lick of sense these days in our public schools.

At least guys learned how to use a hammer two pieces of wood together and girls learned how to sew and cook from scratch back in the "good old days". Even if they were going on to college. Basic adult survival skills is what they were - and a few licks of common sense. Frou-frou culinary arts is no substitute. Learning how to cook an egg for pennies at home by yourself is.

All of that practical education went out the window in order to teach kids to care more about polar bears on broken ice floes ( who belonged there in late summer in the first place, kiddies) than about their own lives right here and right now.

The amount of junk science garbage that passes for education today in our public schools is the worst source of mind pollution you can find anywhere. Hey, we all care about the planet and a few PSAs repeated often enough gets that across to one and all.

But K-12 is where kids should be getting their basic building blocks so they can later explore the world on their own later. And if the best way is to lecture and demand rote memory to get this crammed into their little heads with grades from A to F instead of social passes where everyone is an honor student regardless skills acquired, then let's go back to that too.

Kids are too young for "critical thinking". College kids even can't handle it. They all just need facts and exposure to as much information as they can absorb. Knowledge, wisdom and critical thinking comes later in life after experience, but only if the grounding facts have been presented fairly, thoroughly and with out political bias.

Back to basics teachers and the love of teaching; not social agenda indoctrination.

Oblati (anonymous profile)
December 8, 2012 at 10:59 p.m. (Suggest removal)

French Colonial Literature should be a pre-req for auto mech school. ;)
But seriously, to be a great auto mechanic or craftsmen of any kind is an honorable job, something to be proud of. Our values have become so twisted that unless you aspire to be Gordon Gekko you're considered a failure.

Ken_Volok (anonymous profile)
December 8, 2012 at 11:33 p.m. (Suggest removal)

gosh Oblati, when you write "Now hopefully teachers will no longer take out their bad morale on the children" how the heck can you know this?? I know plenty of underpaid public school teachers who don't do this and never have, even pre-Prop 30. I'm hearing sour grapes from you and Botany.
I agree with you, when you ask? "How about if we get back to celebrating the intact, stable two parent family..."? I wish we could, but that isn't then?

DrDan (anonymous profile)
December 9, 2012 at 7:46 a.m. (Suggest removal)

and KV is right in noting we have to honor "shop" and vocational ed in our schools more, we can't all aim for the NBA, hedge fund managership, or even BA degrees now. As the book title goes, Shopcraft is Soulcraft.

DrDan (anonymous profile)
December 9, 2012 at 7:48 a.m. (Suggest removal)

How can teachers alone be the only ones to complain they are "underpaid". I thought everyone thought they were underpaid. It is just that teachers have a louder, tax dollar funded bully pulpit.

What is "underpaid" anyway, besides as union-inspired sound byte.

Teachers get paid what they get paid and this is disclosed up front before they sign their contracts. If they don't like those terms of employment, nothing forces them to take these jobs or hostage their "morale" later as a means to abrogate this mutually bargained for contract.

How do teachers who can make up to $100,000 with lavish perks and benefits for a 180 day year job complain about being "underpaid"? (state controllers office public records for public salaries).

If you don't like what your district is paying you, by all means move on. Tried of this continual lament that is never assuaged by any level of new taxes coming exclusively from teachers: we are under-paid, over-worked and under-appreciated.

Consider what your own self-inflicted griping as done to the entire profession, now held in increasing disregard by the public. And the flight by those concerned parents who do want the best for their children to private schools or home schooling.

They don't want their children exposed to the toxic environment created by this constant teacher union bitch-fest motto that shows no signs of ending or identifying an endpoint where teachers will finally decide they are paid enough and stop taking this gripe out in the classroom.

We get back to celebrating the intact, two-parent family ...... by celebrating it, and discrediting factors that are destroying it. See, this is not rocket science. You might need to get rid of your anxiety about bucking negative peer pressures to think otherwise, but at some point all our lives benefit when we stand for what is good and not protect that which is dragging us all down.

Not everything in life is politically correct or morally irrelevant. Sometimes things are just good in their own right and then become simply the right things to do. So we do it and we speak up for it. And single drops soon become a rushing river.

Oblati (anonymous profile)
December 9, 2012 at 10:21 a.m. (Suggest removal)

A timely entry found in a blatantly conservative blog, but still worthy of reading as this important conversational topic about today's and yesterday's classroom experience unfolds before us right here and right now:

Oblati (anonymous profile)
December 9, 2012 at 10:29 a.m. (Suggest removal)

If we want to get back to "when things worked" it's actually pretty easy:
1) Repeal Prop. 13
2) Boycott the Texan textbook industry which goes by backwards Texan educational standards.
3) Streamline administration (use the savings for teachers and classrooms.) Ex: The once free before his royal highness Reagan UC system is so far afield today they just wasted thousands on a new logo (that is plug ugly to boot.) Of course student tuitions neeeded to be raised to pay for it.
Quit blaming the teachers and the unions, its the greedy and the ignorant that are destroying CA's educational system.
And I'm sorry Bill but both you and "Oblati" are wrong on this one. people have been blaming "show folk" since 156 of not earlier for society's ails. We don't create them, we just put them in your face so you have to address it.

Ken_Volok (anonymous profile)
December 9, 2012 at 11:38 a.m. (Suggest removal)

You can't streamline education until you unfreeze the teacher union lock on the state legislature, who keep passing the teacher job protection mandates that administrators then have to administer.

While you are dumping Prop 13, be sure to also get rid of Prop 98 that guarantees 50% of all state tax revenues are irrevocably dedicated to public education and have been ever since Prop 13 was passed.

My guess is schools today are getting far more money per student, adjusted for inflation than they ever got before Prop 98.

Decades of trash talk and demands from the teachers unions have done more to degrade the profession than anything else.

Teachers unions remain the primary cause of the problems in education today and also the source of the primary solution. They need to get off their one trick pony bleating: we are under-paid, over-worked and under-appreciated and then yet again sticking their hands in our back-pockets for more, more, more.

The better message is we love what we do, we want your child to succeed in the modern world with essential basic skills and we will work relentlessly to ensure this happens. Thank you tax payers for dedicating 50% of all state revenues to this important educational mission.

Oblati (anonymous profile)
December 9, 2012 at 12:59 p.m. (Suggest removal)

When teachers aren't dipping into their own pocketbooks to pay for supplies you might have a case. Til then, I suggest therapy to deal with your unresolved issues with teachers/authority figures and resist the temptation to do more harm.

Ken_Volok (anonymous profile)
December 9, 2012 at 1:09 p.m. (Suggest removal)

Ah yes, I forgot the second verse of the Teacher Union Lament: we dip into our own pockets for class room supplies.

And we also get a federal income tax deduction for every penny we allegedly spend. This obviously is a practice that needs to be independently audited, for its worthiness and creditability.

However, the dialogue is useful because it underscores the first first verse of the Teacher Union Lament: we are under-paid, over-worked and under-appreciated.

Chorus (repeat endlessly): we want more, more more. We want more, more, more. We want more, more, more.

This chorus can be sung as a contrapuntal duet with the Taxpayers Lament chiming in: we want scores, we want scores, we want scores.

Oblati (anonymous profile)
December 9, 2012 at 1:38 p.m. (Suggest removal)

Why do you hate educators Oblati? It really does seem psychological. You realize W. Bush screwed up the system more don't you?

Ken_Volok (anonymous profile)
December 9, 2012 at 1:46 p.m. (Suggest removal)

From the website "" in a search for "capital appreciation bonds" was listed the following SB school bond encumbrances:

2011 SB Elem:

Principal: $6,980,377
Total Debt Service: $39,900,956
Maturity: 30 years
Maturity/Debt warning status: Yes

2011 SB HS:

Principal: $15,789,211
Total Debt Service: $95,322,402
Maturity: 30 years
Maturity/Debt Warning status: Yes

2012 SB Unified:

Principal: $3,756,427
Total Debt Service: $12,920,953
Maturity: 30 years
Maturity/Debt Warning status: Yes

SB School board members when these were issued: Heron, Deacon, Parker, Limon, Cordero. Where is the new board majority on these issues left by their predecessors today?

Oblati (anonymous profile)
December 9, 2012 at 2:11 p.m. (Suggest removal)

Anyone can publish on that site, just like here or on FB.

Ken_Volok (anonymous profile)
December 9, 2012 at 2:19 p.m. (Suggest removal)

For about 30 years at least there's been a growing fifth column in the Republican Party, the outcome being our broken system and the results of the last election. These fifth columnists publicly stated then proceeded to sabotage their own government (by "starving it" financially) to benefit but a few. All along playing to the worst in people and nurturing bigotry and ignorance.
Now so many of our public institutions which they have always wanted to do away with are in dire straits and they say "see, privatization is the answer". It's akin to urinating on someone's leg and telling them it's raining.
Time to turn the tide around, get back to at least an Eisenhower style tax plan.

Ken_Volok (anonymous profile)
December 9, 2012 at 3:33 p.m. (Suggest removal)

Got it Ken. Socialist patter; demonize opponents; and no end of reasons to spend other people's money.

I like the fact you and I did agree on a few topics. Let's work from there.

Oblati (anonymous profile)
December 9, 2012 at 3:54 p.m. (Suggest removal)

Examples of demonizing vs my examples of demonstrable fact:
"Decades of trash talk and demands from the teachers unions have done more to degrade the profession than anything else.

Teachers unions remain the primary cause of the problems in education today and also the source of the primary solution. They need to get off their one trick pony bleating: we are under-paid, over-worked and under-appreciated and then yet again sticking their hands in our back-pockets for more, more, more. "

Never fear, we will soon agree again on something.

Ken_Volok (anonymous profile)
December 9, 2012 at 4:06 p.m. (Suggest removal)

ahhh, "socialist patter" ... "demonizing opponents"... who is doing this,? Oblati? Your detestation of teachers is...demonizing!
I did like your comment "The better message is we love what we do, we want your child to succeed in the modern world with essential basic skills and we will work relentlessly to ensure this happens." Most public school teachers love what they do. You have to when, at least in SB, you often get a pink slip at the end of the year and have to wait half the summer to know if you ARE being rehired.
"Essential basic skills" covers a lot. In an emerging global economy our students will need to be much better equipped than only with "essential basic skills."

DrDan (anonymous profile)
December 9, 2012 at 4:11 p.m. (Suggest removal)

Proposition 13. Let's remember that there are a lot of old people on fixed incomes paying prop 13 rates. If you want to amend parts of prop 13, (as in making sure wealthy businesses pay their fair share) then you may well have a point, but if you simple do away with prop 13 altogether then a lot of old, sick, and people on fixed incomes are going to be tossed out onto the the streets.

billclausen (anonymous profile)
December 9, 2012 at 4:26 p.m. (Suggest removal)

That would be the ideal situation BC. The middle ground is always best.

Ken_Volok (anonymous profile)
December 9, 2012 at 4:30 p.m. (Suggest removal)

Notice the consistent bait and switch: hating teacher unions becomes "hating teachers".

Nope, you don't get that one for free. Teachers can be great and they also need to start hating the teachers unions because of what they are doing now to previously their well-regarded and necessary profession.

Shoot, I even think teachers should be well-paid because I too want to attract and retain the best and make teaching a well-sought after career with a promise and a future.

Teachers need to let go of their fears they will not be well taken care of if they ditch the unions that are dragging education down for everyone, esp the students. We get what we pay for and now unions make us pay for continued poor results.

We would rather reward the teachers who do love what they are doing, are proud of their verifiable results and ditch the ones who are not reaching this level of professional accomplishment and replace them with those who can and will. That's all.

Are we still on the same page, K and D? How do we best get there. And how do we know K and D are not teacher union bosses or shop stewards who will never agree to any form of teacher accountability and compensation reform?

Oblati (anonymous profile)
December 9, 2012 at 6:14 p.m. (Suggest removal)

In my spare time I steward a couple of labor unions and mange several third world countries. I'd like to take up space exploration next year.

Ken_Volok (anonymous profile)
December 9, 2012 at 6:18 p.m. (Suggest removal)

how do we know you Oblati aren't one of the 1% [or making over $250K per year] and what's behind all your voluminous comments is simply that you detest having to pay the extra tax you will get to pay under our wonderful new Prop 30 law?
I'm not part of any union and I'm not a public school teacher. Having said that, your support of Race to the Top is ill-advised, and that program will largely not help public teachers or accountability.
EatTheRich pretty much sums it up quite well.

DrDan (anonymous profile)
December 9, 2012 at 7:04 p.m. (Suggest removal)

Guess who required the pink slips get sent out on a fixed date? The unions; not the administrators.

So stop blaming administrators who are required to send out those pink slips, or else the schools will get sued by the unions if they are one second too late when they are required give notice next year's budget may not support some teachers (LIFO) continued employment.

See if you can follow this timeline to understand why this is happening:

Schools hire and fire based upon proposed budget numbers they get from Sacramento. Put this on your calendars:

Every January the Gov sends out his/her first budget draft. Stay tuned, this is coming up soon.

If this looks like it will not support a certain employment level for the schools, they are required to send out pink slips to all affected employees by I believe March 15 to give them proper notice they may not have a job next school year. Unions put this demand on the schools.

Then after the January budget is proposed, everyone picks and fights with Gov until they come up with a revised budget which gets sent to the schools in May. Then schools have a better idea whether they can hire pink-slipped teachers back or not.

However nothing is certain in May after all because the budget is still not final until it is voted on by both houses and signed by the governor at the end of June.

And now it can get even worse because for a few years ago was there was no final budget for months well after the June 30 deadline.

Sometimes the final budget did not get signed until October, well after the school years started.

(Maldanado finally broke with Republicans to sign that one and unfortunately lived to regret this breach by his own party for this actually self-less act, rewarded as he was with the feckless Lt Gov slot. Teachers should thank him for taking one for their team too.)

Chaos yes, but be sure you know who to blame here - not the administrators who were stuck with non-existent numbers to work from. It was Sacramento under teacher-union domination that has made this dysfunctional.

But wait folks, it is not over yet. The final budget given to the schools in late June is only a projection of expected state income, based upon as much wishful thinking as realistic assessments.

Last year they wished they would get a billion dollars from Facebook IPO capital gains taxes -- which never happened. But this is how they put numbers together in Sacramento.

So even with a signed and sealed budget, there remains the final September date after the state sees how revenues are holding up.

Only in September if the budget got signed in a timely manner do schools get to pass their final adopted budget which now the state promises to make good on with back-fills or other sleight of hand deferrals.

(Continued to Part 2)

Oblati (anonymous profile)
December 9, 2012 at 7:09 p.m. (Suggest removal)

(Continued Part 2)

Only now can the schools keep their doors open, after the school term already started and previously pink-slipped teachers may or may not have been hired back.

As actual state tax revenues come in throughout the year either higher or lower those initial projections, the schools are yet again told throughout the rest of the year how they may have adjust both up or down as the year progresses if even the backfill promises cannot be met.

And then in January it all starts up again.

Schools get ready again for the fight for the next school year's projected budget, and the next round of pink slips sent by March and all the hassling and wrangling from all other public agencies starts up again.

This typically leaves the public only shaking its head at the periodic screaming headlines, union doom and gloom threats, deals, compromises and lately ever-increasing state debt to keep everyone happy but stick the bill to someone else down the road.

So this is the underlying scheme in all this madness.

Here is some more meat for you voters to chew on - the one reason the teachers unions grew in such power in Sacto -- is because the prison guards unions beat them to the punch a few years back with Three Strikes and You are Out full-time job protections.

They snuck in a grabbed a permanent lion's share of state revenues, leaving crumbs on the table for schools as the years went by. Prop 98 however has promised 50% of all state tax revenues to go to education. Schools do get protected, more than any other public entity.

Yet federal law protects public pensions over anything else. Therefore the shortfall and unfunded pension liabilities we keep hearing about are bankrupting present uses of our present tax dollars. Did I mention unions bargain for those pension rights and union friendly school boards grant them?

So what we are really seeing getting played out among the voters and tax payers is the Battle of the Giants between the teachers unions who use kids as hostages to get more money and the prison guards unions who use crooks as hostages to get more money, as both fight over whatever pot of money Sacto gets to distribute.

And there you have it. Nit-pick the details if you want, but the big picture is what is really important.

#1 Public pension reform.
#2 No more union-friendly elected officials to be on both sides of the bargaining tables when handing out benefits, perks and salaries
#3 - right to work laws that do not require union membership
#4 no more use of union dues for political purposes without member authorization
#5 - return to a functional bi-partisan legislature with moral give and take, instead of the union-dominated one we have now which is take, take, take and then tax, tax, tax.
# 6 - sufficient deregulation in this state to allow the economy to grow, innovate and thrive

Voters control all of these outcomes. You get what you vote for.

Oblati (anonymous profile)
December 9, 2012 at 7:10 p.m. (Suggest removal)

DrDan: Whether or not Oblati is part of the 1% does not invalidate the points he/she makes.

billclausen (anonymous profile)
December 10, 2012 at 2:36 a.m. (Suggest removal)

Impossible BC-To be a part of the 1%, the group that takes care of the vast majority of resources for this welfare state, means that any opinion that the folks that fund this fiasco have MUST be illegitimate.

italiansurg (anonymous profile)
December 10, 2012 at 5:27 a.m. (Suggest removal)


46 other states had no problem taking the extra federal cash for schools put on the table by Obama's Race to the Top wealth redistribution program.

Since this state loves Obama we know there is no ideological reason not to accept this largesse. So what gives?

California as one of only 4 other states in the nation who have refused to take this extra cash for education needs to explain why.

And local school boards need to weigh in on this too. Why are they not pursuing this money instead of raiding our local property taxes. Please spell out local objections to Race to the Top money that 46 other states have willingly taken for their own local schools.

Ed Heron, I hope you continue your public engagement on this matter. What is the California teachers unions official position on this?

Then tell us also why SB schools resorted to capital appreciation bonds and are they planning on putting more CAB's before the voters again so we will know better ahead of time what we are asked to vote for?

Oblati (anonymous profile)
December 10, 2012 at 8:51 a.m. (Suggest removal)

@BC yet Oblati questioned if some posters' connection with unions etc. led to their strong defense of teachers/children/Prop30, thus I question if O's "voluminous" and one-sided perspective on public school financing was based on personal economic
and yes, "federal law protects public pensions over anything else." which is mostly a good thing. I am on record in other posts favoring capping of public pensions and "reforming" them down somewhat. I supported Mayor Schneider's plan for SB public pension reform. So no, urg., my opposition to most of Oblati's 6 points isn't that "opinion that the folks that fund this fiasco have MUST be illegitimate." E.g. I go most of the way on O's pt. 5.
However, I see almost zero flexibility in O's or Botany's or urg's views...

DrDan (anonymous profile)
December 10, 2012 at 9:15 a.m. (Suggest removal)

It mkight had something to do with accepting Bush' bogus No Child Left Behind Plan. SB Unified's Science requirements alone far exceed "No Child Left Behind" and in fact curriculum would have to be dumbed down to meet NCLB guidelines.
Thus, the school board acted wisely in refusing such funds. SB schools aren't as decayed as many others in the state.

Ken_Volok (anonymous profile)
December 10, 2012 at 1:18 p.m. (Suggest removal)

Concentrate on what is being said; not speculation about who is saying it.

Good ideas stand on their own. Public pension reform is one of them. Rejecting Capital Appreciation Bonds is another. Balancing school budgets with the $11,000 per student the state pays is another.

Right to work, open shop is fundamental. Direct deposit of public employee union dues directly from the state treasury into to the union bosses bankrolls and bypassing the union member is not a good idea.

This list of good ideas and bad ideas goes on...... voters need to think about which ones they want to honor and which ones they want to reject them they voter for their elected representatives.

Oblati (anonymous profile)
December 10, 2012 at 1:47 p.m. (Suggest removal)

Any school district that turns down federal cash but then turns around and demands local property owners make up the difference, or else the "children will suffer" is .... decayed....(sic).

SB schools additionally need to explain why the state Governor's website CalFacts keeps telling us they spend $11,000 per student and SB schools howl they only get $5000 per student. Serious credibility gap that needs to be addressed.

Oblati (anonymous profile)
December 10, 2012 at 1:53 p.m. (Suggest removal)

So you're saying the school district should have downgraded the quality of the education offered to students in exchange for money? Kinda ass backwards. I vote for having not just average but the best schools, a good example to communities far and wide.

Ken_Volok (anonymous profile)
December 10, 2012 at 2:27 p.m. (Suggest removal)

Ken, you err. No proof more money alone begets proven increases in quality in education. More money just gets more money ..... for the employees, and it stops there. So no, that is not what I said.

Please in the future stick to what you want to say for yourself and spend less time putting your words into other people's mouths. It will make for a more seamless exchange of ideas ...... if in fact this is what you want.

We are on to something Ken when we stick to our own thoughts ..... there seem to be points of agreement emerging. It will be interesting to cull them out eventually from the clutter of intervening ad hominum misrepresentations.

Oblati (anonymous profile)
December 10, 2012 at 2:40 p.m. (Suggest removal)

The Feds don't just give money out without stipulations. i do know some funds offered were directly connected to No Child Left Behind which further damaged schools. So in this case the Board can be seen as wise to have not accepted the money.

Ken_Volok (anonymous profile)
December 10, 2012 at 4:15 p.m. (Suggest removal)

Let's keep the topic on Race to the Top and the fact that 46 other states happily agreed to the stipulations, yet California teachers unions protested this same program other states willingly accepted.

Rejecting Obama money is the issue; not continued Bush NCLB bashing, okay?

Also, may I please put your first comment into my Darwin Award file? (Uh, oh, there goes that equal opportunity trash talk again.)

Oblati (anonymous profile)
December 10, 2012 at 4:21 p.m. (Suggest removal)

To put some facts on the constant teachers union lament:

"We are underpaid for our 180 day year, with multiple paid vacation days, all paid holidays off, and full tax-free health and retirement benefits".

If a teacher gets a $40,000 a year pension, this is the equivalent of having a one million dollars nest egg in the bank earning 4% interest. (Do the math)

Yes, the teacher does not get to pass that million dollars on to her kids like others who actually have a real million dollars in the bank, but for his or her lifetime, she/he gets to live like a millionaire. You know, like the 1%.

Plus as a good Obama-phile, he/she believes in wealth distribution anyway so no unearned million dollar estate going down to her/his kids. That is the Obama way.

Additionally, these million dollar nest egg checks are guaranteed to keep coming in for life, regardless of what the market does. The teacher's defined-pension benefit is guaranteed in full for life the moment the teacher leaves the classroom.

Who makes up the difference when CALSTERS fails to earn 4% for that teacher?

We do, or rather your school budget has to make up the difference. They take money away from the kiddies and hand it over to the retired teachers to keep them flush in their retirement days, while Johnnie gets short-changed in the classroom during his own K-12 school days. Sweet.

Which is why schools demand never-ending parcel taxes to make up for these defined-benefit hits on their budgets, when the market goes down and CALSTRS makes poor investments while over-promising benefits. The teacher is guaranteed a set amount and someone has to pay it. Oooops, there goes Johnnie's band class. Out go those pink slips.

Private 401K pension plans are good enough for our "underpaid-overworked and under appreciated" teachers. So if you thought parcel taxes were all about letting Johnnie keep his band class? Think again.

Nope, parcel taxes are all about needing to meet those unsustainable teacher pension obligations so schools can attempt to offer students in the classroom today some sort of reasonable classroom experience at the same time they have to keep forking over more money to meet promises to teachers now long retired.

Yes, parcels taxes essentially all go to pay off promises made to the unions and nothing more. Without these union-demand pension drains on school budgets for retired workers, there is plenty of state money for Johnnie's band class .... and more. Don't let the teachers unions let them tell you otherwise.

(Continued part 2)

Oblati (anonymous profile)
December 10, 2012 at 11:03 p.m. (Suggest removal)

(Continued to part 2)

No wonder teachers like their unions and no wonder they keep electing union-friendly school board members to bargain on their behalf to keep those pension benefits intact.

No wonder the Democratic machine is so intent on flooding all local school boards with their party members, some of whom who are not competent to run a dog fight, let alone a functional educational system. Their only talent is to vote the way the unions tell them to vote.

So if you wonder how did we get into this unsustainable public debt owed public employee pensions, look no further than your own vote for your own local union-friendly school boards.

Just thought you would like to know. As always when things don't make sense, follow the money. Change all starts with your vote next school board election and why it is so important to elect candidates who are independent and non-partisan and not just teacher-union shills.

Everyone wants good education for our kids. But we now have to say no to unsustainable teachers pensions which are robbing our children today of what they deserve.

And in turn makes any retired teacher in this state the fiscal equivalent of the stereo-typical greedy 1% millionaire. Tax the wealthy? Sure, but start with those "millionaire" teachers first. That is where your tax dollar rubber hits the road. And stop voting for parcel taxes which mask over this ongoing millionaire-teacher boondoggle.

Oblati (anonymous profile)
December 10, 2012 at 11:06 p.m. (Suggest removal)

BTW: how apt is this story's lead photo: A guy in the present having to pay, throttling the guy who voted for the CAB Measure Q in the past.

Oblati (anonymous profile)
December 11, 2012 at 9:54 a.m. (Suggest removal)

If you don't like reading what I have to say on this topic, look what Bloomberg tells you about the same thing:

Oblati (anonymous profile)
December 11, 2012 at 2:19 p.m. (Suggest removal)

I read the Bloomberg piece, thanks, it's also a conservative screed vs. unions and everything else you rant about, Oblati.
One thing stood out, "the state’s public schools dropped to 35th nationally in 2009-2010", and we only give about $9000 per kid per year to public schools (not your $11,000 figure), and remember in NY State they give $19,000 per kid. Prop 30 won't correct this imbalance much.
I admit I was concerned by how very much the so-called public salaries in Calif. and how high they were. This is again a 1% or 2% problem issue of typical corruption -- we do need to cap some things, cap pensions over 100,000, hold the line on pay increases at least until the Recession is honestly over...

DrDan (anonymous profile)
December 11, 2012 at 5:23 p.m. (Suggest removal)

Perhaps the Governors office quote that it costs the state $11,000 per student, included what the schools have to pay out to make up for the CALSTRS/PERS losses? (See Cal Facts)

What should concern us all is how much of the present "education" dollar now goes to support retired teachers, because of particularly unsustainable pension promises their unions made and got delivered to their members.

CALSTRS poor fiscal management has come up short handling both these pension investments and promises of unrealistic returns, which they have not achieved now for many years. This should be a mutual concern.

That is when and why CALSTRS then comes after the schools present money to make up for their poor planning so they can keep paying out their guaranteed "millionaire" teacher retirement benefits. Money has to come from somewhere. Magical unicorns and money trees is not the correct answer. Wishful thinking is no longer the answer.

The money to support "millionaire" teacher retirement comes out of the classroom today and tax payers pockets with never ending parcel taxes.

We think this is wrong. We want to stop to paying these "millionaire" retired teachers, who are raiding today's classrooms. This has to stop now. Sure, those already on the gravy train get to continue because of federal protections. But all unvested public employees need to be switched to defined contribution plans ASAP.

And please, don't forget California had rejected federal Race to the Top dollars which is why the state gets less money than those 46 other states who did agree to teacher reforms in order to cash in on that extra cash.

You need to ask your school boards why they are leaving money on the table and stop asking local tax payers to hand it over to you instead.

Oblati (anonymous profile)
December 11, 2012 at 10:08 p.m. (Suggest removal)

You can't just state that an organization opposed some form of federal funding without saying "why". I'm not going to do research to back up your slew ideological slanted innuendo and assumptions. I'll just end up debunking you anyways. Considering there's only about four states I'd ever consider living in, I'd be interested in knowing who the other three were.

Ken_Volok (anonymous profile)
December 12, 2012 at 1:09 a.m. (Suggest removal)

this statement - "The money to support "millionaire" teacher retirement" -- is absurd, and shows true colors. It's just about the money for some...

DrDan (anonymous profile)
December 12, 2012 at 6:35 a.m. (Suggest removal)

"Millionaire" teachers: it takes one million dollars earning 4% to pay for a single teacher's $40,000 a years guaranteed pension, for life.

(Do the math for any other guaranteed pension pay-out amounts)

Teachers therefore retire as if they were virtual millionaires, living off the interest earned on one million dollars principal.

Remember now how teachers retire and get paid, as if they were virtual "millionaires" when they claim they are: under-paid, over-worked and under-appreciated.

Remember this especially when tax payers have to make up the losses when CALSTRS and CALPERS can't deliver on what they promised to support these defined-benefit pension awarded to all public employees.

You taxpayers now have to make up the difference when these irresponsible pension plans fail to deliver which were promised during the Gray Davis, Democrat-controlled years almost 10 years ago.

You can change this leap off the fiscal cliff by reversing this 10 year detour: change all future public employee pensions to defined contribution plans and slowly eliminate these "millionaire" teacher defined-benefit plans for the future.

We are stuck with the ones granted during the last 10 years, but we don't have to keep handing them out to new hires.

We can' afford them. Period. They were a mistake and the economy can no longer support them.

Oblati (anonymous profile)
December 12, 2012 at 9:34 a.m. (Suggest removal)

LA Times: California refuses reforms to qualify for Race to the the Funding

Do us all a favor Ken. Don't complain California teachers getting less money per student, when at the same time California among only a few other states consistently has refused taking federal Race to the Top funds.

Stop dunning us with more local parcel tax demands to make up for California teachers blatant refusal to even consider education reforms.

Oblati (anonymous profile)
December 12, 2012 at 9:39 a.m. (Suggest removal)

Defined-benefit pension plans for public employees were a mistake.

They are no longer sustainable, and must no longer be offered to new public employees.

Oblati (anonymous profile)
December 12, 2012 at 9:46 a.m. (Suggest removal)

You refuse to detail why California didn't take the "race to the Top" money. Could it be because standards would be lowered? That'd be pretty valid.
Instead all you offer us is ideological masturbation.

Ken_Volok (anonymous profile)
December 12, 2012 at 11:17 a.m. (Suggest removal)

Oblati, good idea, we need more dunning with more local parcel taxes to fund quality public education!
I'm glad Calif didn't accept race to the Top money. There have been several articles (Stanford professors in LA Times, you look 'em up Oblati) showing the value added tests are skewed and do not help us effectively evaluate teachers.
So much fear there, Oblati. KV said it best about your endless posts: ideological masturbation.

DrDan (anonymous profile)
December 12, 2012 at 11:45 a.m. (Suggest removal)

"Value added" tests? Can I get fries with that?

Ken_Volok (anonymous profile)
December 12, 2012 at 12:09 p.m. (Suggest removal)

Race to the Top, a failed program, insists on including value added tests which also "grade" the teachers by using standardized test scores. Several educators, not union flacks, have decried their lack of usefulness.
Two Standford professors wrote a devastating critique of using students' standardized test scores to evaluate teachers: see

DrDan (anonymous profile)
December 12, 2012 at 1:07 p.m. (Suggest removal)

Are public pensions no longer sustainable as Oblati insists?

One way to assess the health of a pension is to look at its "funded status", a measure of current assets vs current & future obligations. Funded status these days appears as a line item in the pension's annual report.

Here's a look at the latest funded status of pensions for local/state public pensions and some commerical companies doing busines in our area (higher % is better):

ATK, 71%
Catepillar, 68%
Lockheed Martin, 67%
Raytheon, 72%

ATK is Alliant Tech in Goleta, CALSTRS is the CA teachers pension, CALPERS/PERF is the CA state pension (PERF is their largest plan), Catepillar is the tractor company, Raytheon and Lockheed are in Goleta, and SBCERS is the SB County pension.

Based on my (painful) review of annual reports, I don't see much difference between the health of these selected public & private sector pensions (although CALPERS is exceeding the average).

EastBeach (anonymous profile)
December 12, 2012 at 1:30 p.m. (Suggest removal)

appreciate the refs EB...there are over 85 public pension plans in Calif. so it's very tough to learn all that... These don't look so bad. When folks like Oblati start slamming the biggest of all, Social Security, we learn it's funded through about far into the future does one of these have to be "guaranteed". There is plenty of evidence that 401(K) type pensions (they aren't pensions really) are far less beneficial to the retiree...they swing up and down with the market. Oh yes, but if you dislike teachers and oppose public education then...

DrDan (anonymous profile)
December 12, 2012 at 1:53 p.m. (Suggest removal)

Let's see. Lockheed/Raytheon are basically fronts for the federal defense industry, getting tons of taxpayer money and are willing to dance to their tune.

Caterpiller was on the brink of bankruptcy and is luckily making much of its money overseas. Not sure what your point is here.

Good the discussion about "millionaire" teachers living like the 1% in retirement is finally into public view.

Funny the teachers unions were the primary agents creating the smoke-screen of the Occupy movement when in fact they are right up there with the nasty corporate 1%

Taxpayers are not interested in splitting hairs. They are tired of this old refrain: we are over worked, under-paid and under-appreciated. Ever think about thanking taxpayers for always coming to their feigned rescue?

Oblati (anonymous profile)
December 12, 2012 at 2:20 p.m. (Suggest removal)

It's true there are more public pension "plans" than there are actual pension funds. Looking at SBCERS as an example, they have something like 4 or 5 different plans (e.g. police, fire, general, etc.). Each plan can have different contribution requirements and benefit levels. But SBCERS provides only one financial report - that makes me conclude there is a single investment fund supporting all the plans.

In contrast, CALPERS issues multiple financial reports associated with different plans (I listed the largest CALPERS fund, PERF). So it seems CALPERS is big enough where they have seperate funds.

I observed a similar situation for the private-sector pensions. My guess is this is caused by company mergers & acquisitions when the assets of one company's pension is absorbed by another, but they maintain different plans for employees in different divisions.

EastBeach (anonymous profile)
December 12, 2012 at 2:33 p.m. (Suggest removal)

"Seems CALPERS is big enough where they have separate funds"? Hello........

Like how about both CALSTRS and CALPERS are the biggest sovereign wealth funds on the planet? Yes, I would call them "big enough".

Both created solely with California tax dollars diverted into unsustainable pension promises, where now their poor investments have failed to meet their promised payouts.

Even with their billions in the bank they can't meet their unfunded liabilities and now must demand present dollars from current public budgets to backfill their promised retirement money flowing to these public employees.

They still act like they are still making the go-go years 8%, when in fact they have barely seen more than 2%. That is what is called "unsustainable".

Here is the way to fix the whole problem of unsustainable public pension problems once and for all.

Create, or allow, all workers to have a (1) social security type pension plan, (2) an equivalent of a private industry 401K and (3) access to any appropriate additional IRA type tax sheltered retirement plan options.

Throw in some employer sponsored budgeting and prudent financial planning seminars and you have the entire new public employee pension package.

In this way, present dollars get used for present needs and any long-term pension coverage no longer exceeds the pension plan's ability to pay, like it does currently with out-of-date defined benefit plans.

Present public workers will get raises because less money is leaking out of present state funding to make up the losses caused by the former unsustainable promises committed by CALPERS/CALSTRS ......ETC.

Fixed. Done. Stick with the basic problems. Wander in the weeds if all you want to do is create another bust of an Occupy smokescreen to divert the public from the real issues:



Oblati (anonymous profile)
December 12, 2012 at 2:51 p.m. (Suggest removal)

Your words betray your claim of objectivity.

Ken_Volok (anonymous profile)
December 12, 2012 at 3:02 p.m. (Suggest removal)

Defined-benefit public pensions were a mistake. Their time has now passed

Public agencies shall now offer only defined-contribution plans to new workers, for the best of all possible worlds.

Present tax dollars will be now used to cover present needs and services; and not diverted continually to backfill failed defined-benefit pension plan short-falls.

Oblati (anonymous profile)
December 12, 2012 at 4:25 p.m. (Suggest removal)

Who wants to enter into a contract with undefined benefits? And using words such as "shall" sound rather grandiose don't you think?

Ken_Volok (anonymous profile)
December 12, 2012 at 4:38 p.m. (Suggest removal)

I suspect any one of the 9% unemployed workers or non-benefited part-time workers out there today would be happy to step up to any job offering any level of benefits.

So there you have it. If workers don't like defined-contribution plans they have the freedom to reject the contract and walk away and look for some other employer who will offer what they demand. Simple as that.

Private industry today functions on defined-contribution plans; not defined benefit plans. Self-employed depend upon IRA's. Welcome to the big world. Many workers get no benefits at all and make do on the salary they earn.

Public employment is an anachronism and defined-benefit plans have gone the way of the dodo bird. Good while they lasted, but like all excessive public benefits the money finally ran out. As well as the continued generous mood of the public.

I do believe those in the civil service should be well paid for what they do on the job in the present. Helps prevent corruption of critically necessary public services.

But we can no longer spend increasing amounts of present dollars on past services. That is why public pension reform has become essential. The numbers can not longer support these hoary old defined benefit plans.

Stop worrying if this is what you already have - you get to keep yours. But future workers will never see anything like this again, because they never should have been offered to the public payroll in the first place.
They were an ill-advised detour 9 years ago and this shall now be corrected.



Oblati (anonymous profile)
December 12, 2012 at 5:03 p.m. (Suggest removal)

Because Oblati didn't like my original list of pension plans for apparently random reasons, I've added 4 more from the top of the S&P 500 to the head of my list:

Pension funding level (higher % is better)

AT&T, 82%
Exxon Mobil, 63%
General Electric, 70%
Proctor & Gamble, 59%
ATK, 71%
Catepillar, 68%
Lockheed Martin, 67%
Raytheon, 72%

This sampling shows that public pensions have funding levels similar to their private sector counterparts.

The truth of the matter is pension plans, both public and private, have been suffering because of the poor investment climate of this century:

Over the past 15 years, the S&P 500 rose at an annual rate of less than 5 percent, even with dividends reinvested. There hasn't been such a poor 15-year investment period since 1945. Bonds have also done poorly during the last 15 years, though not as bad as equities.

EastBeach (anonymous profile)
December 12, 2012 at 5:10 p.m. (Suggest removal)

what a mess

Ken_Volok (anonymous profile)
December 12, 2012 at 5:21 p.m. (Suggest removal)

Yes a mess! The crappy economy (at least for most folks) has turned everyone against each other.

EastBeach (anonymous profile)
December 12, 2012 at 6:36 p.m. (Suggest removal)

I was curious what CA teacher salaries are like. It turns out the CA Dept of Education just released their 2012 statistics here:

The Sacramento Bee has taken that data and put it into a user-friendly web database. For any school district, you can see:

- Average teacher salary
- Lowest salary
- Highest salary
- Number of full-time employees
- Superintendant pay
- etc.

Guess which local school district has the hightest average teacher salary in the state? At $101K, its the tiny Montecito Union district. That's on par with many tech professionals in town (I'm not complaining, just making an observation). Most of the local districts have an average salary around $70K. And the starting salaries are considerably lower in the $40K range.

Here are all the local districts:

And here is the entry point to the database (Santa Barbara is in the region "Central Coast"):

Based on this data, I'm glad teachers seem to be making OK wages on the whole.

EastBeach (anonymous profile)
December 12, 2012 at 6:56 p.m. (Suggest removal)

Now I know why a teacher friend of mine was so hot to get into the Palo Alto Unified district. The Silicon Valley districts have considerably higher pay than the state average of $68K. I'm sure some of that is offset by cost-of-living differences. Interestingly, Santa Barbara Unified's average is barely above the state average at $69K.

EastBeach (anonymous profile)
December 12, 2012 at 7:12 p.m. (Suggest removal)

Yet the cost of living here is stupidly higher.

Ken_Volok (anonymous profile)
December 12, 2012 at 7:22 p.m. (Suggest removal)

$69K is for a 180 day year, plus approximately $10,000 worth of medical and retirement benefits.

When health care and retirement are covered benefits, teachers get the full spending power of their entire salary unlike most other workers who have to fund health insurance and retirement savings out of their take home pay.

Teachers get to spend it all on themselves in any way they want, which is an additional bonus because health and pension are already taken care before they even see their paychecks.

Standard 12 month year has 260 work days. So teachers who make $69K "a year" are in fact working 80 days less than in a typical work year.

Since teachers make approx $383 per day, they actually make the equivalent of $99,000 typical 12 month year. (Keeping in mind they get that medical/retirement package on top of this $99,000 base pay equivalent.

Teachers who then also get $40,000 a year pension for the rest of their lives after they retire, have the additional income power of someone with one million dollars in the bank earning 4% interest.

Teachers additionally also have the opportunity to make even more money teaching summer school (more like the typical full work year like most employees, instead of their normal 9 month year).

The better way to judge what a teacher actually makes is to calculate the total compensation package as found on the W-2 forms, and monetize the tax free value of health and pension benefits on top of the W-2 total salaries.

Why do you suppose teachers constantly tell taxpayers they are: under-paid, over-worked and under-appreciated?

Are you starting to feel you have been getting conned ... but when they put your own children's welfare at stake with their seasonal threats of bad morale if you don't pay them more, they know this attack on your emotional jugular works so why stop.

Your call next time they say they are: under-paid, over-worked and under-appreciated. They are not. See above.

Do you want these people in your children's class room when lies and manipulations come so easily to them as a way of life? What in fact are they teaching your children.

BTW: I am glad we pay our good teachers well. I am not happy they bully taxpayers every year for more and more, and never show any gratitude or satisfaction without their constant whining and holding our children's classroom environment hostage with their threats of "bad morale" if we don't keep adding to this already generous compensation package.

Oblati (anonymous profile)
December 12, 2012 at 8:20 p.m. (Suggest removal)

East Beach, what is the fundamental difference between taxpayer funded schools producing only intangible value compared to corporate business interests producing for value in the commercial market place?

To increase income for schools you have to increase taxes, if the economy is not growing to support increased Prop 98 share of state revenues.

To get more income in the corporate world, you produce and sell better widgets.

So let's compare apples to apples. You still have to make your case to the taxpayers to prove you are worth more taxation. Showing us what GE does because it can and will produces more and better products and services of value does not make you case.

I think you are getting lost in the weeds and want to drag this discussion down into obfuscating but meaningless detail. This does not bode well for your classrooms.

Stay focused: Defined-benefit pension plans were a mistake. There time is over. And they are no longer the standard in private industry as well. The public no longer supports them.

Oblati (anonymous profile)
December 12, 2012 at 8:29 p.m. (Suggest removal)

This is not a "crappy" economy. It is a realistic economy.

The prior "economy" you seem to use as a benchmark standard was based upon the unsustainable housing bubble. That was the "crappy" economy and do not understand why you want to take the country back to these days.

Oh that's right, because during those go-go years you made more money, that is your personal standard for a "good economy"; not dreadful, never to be replicated fundamentals that were at work creating it.

How soon one forgets those "good times" were in fact some of our worst times because of the fraud that supported this false sense of un-earned prosperity.

The banksters and Wall street, with the encouragement of the government pumped up the economy beyond any ability to sustain itself while the government created massive public debt -- yet you now claim this was the "good economy" and the realistic deflation of that real estate/Wall Street bubble was not the crappy economy?

Please tell me you are not teaching your students economics. Occupy people, you speak with forked tongue. Clue: your last "good economy" benchmark was really in fact the crappy economy. Meditate on this a bit. You'll get it.

Balancing budgets is the sign of a good economy. Going into debt and mortgaging your future is a bad economy. We are presently in the economy we are in: it is not good or bad; it just is. Live with it.

Oblati (anonymous profile)
December 12, 2012 at 8:40 p.m. (Suggest removal)

Do us all a favor Oblati and don't pretend to have some authority as to what people can and cannot comment on. People are armed with facts to deal with your opinion, live with it.

Ken_Volok (anonymous profile)
December 12, 2012 at 8:49 p.m. (Suggest removal)

The dialogue continues to be useful.

Oblati (anonymous profile)
December 12, 2012 at 9:09 p.m. (Suggest removal)

Dialogue is always useful, castigating people for participating isn't.

Ken_Volok (anonymous profile)
December 12, 2012 at 9:14 p.m. (Suggest removal)

Especially if they've had no cigarettes.

Ken_Volok (anonymous profile)
December 12, 2012 at 10:27 p.m. (Suggest removal)

Dialogue seems to be the least of Oblati's concerns. His/her comments are more like a monologue shouted at any passerby. Reading too much Lanny Ebenstein will do that to ya :)

EastBeach (anonymous profile)
December 12, 2012 at 10:51 p.m. (Suggest removal)

We MUST cheer 'cause O's seen the LIGHT: "BTW: I am glad we pay our good teachers well." We SHALL admire his/her magnanimity...ahhhh

DrDan (anonymous profile)
December 13, 2012 at 6:07 a.m. (Suggest removal)

"Dialogue is always useful..." @Ken_Volok

Right there. That's your problem. You thought you were engaged in an "exchange" of ideas, A.K.A. a "dialogue" with Oblati. Read through the above posts again and you'll see that this was never about exchanging ideas but instead was all about digging a trench, building a wall and settling in. Oblati fires a salvo. Ken et al. posts a reaction that we'll call a response...lather, rinse, repeat. It's the recipe for how things go on this site (in this country?) when people disagree. How's it workin' for yous? Any changed minds out there? Did Oblati or Ken (or anyone else) blow anybody away with their rhetoric? Seems like all the usual talking points were addressed. Good on ya. You've both played your roles well and haven't given an inch.

The one thing I can count on in this world (besides death and the mortgage) is that everyone who posts here is always "right", myself included. Thank goodness.

Kingprawn (anonymous profile)
December 13, 2012 at 7:56 a.m. (Suggest removal)

@KP: If you've found a way to not "count on" taxes, you've outwitted luminaries such as Ben Franklin.

Some may find it interesting to compare the pension funding percent numbers presented by Eastbeach, above, with those shown for US states (in an incongruous letter in a supplies catalog):

It seems clear that partially funded pensions are not uncommon, and perhaps they are the norm.

I found the Uline letter interesting as it is another example of polarization that is based on a well-meaning but not fully informed or consistent position: the funding level of pensions in the red states are similar to those of large successful corporations.

hodgmo (anonymous profile)
December 13, 2012 at 8:30 a.m. (Suggest removal)

Bringing arguments out of the shadows, rather than the one-sided progressive pitch the Independent has long been known for is dialogue success in my mind.

Readers following this thread at least get exposed to a wider range of viewpoints which is as much of a winning score as one could hope for. No one would expect the participating posters minds would be changed, nor is it necessary. Just the opposite in fact.

My goal is to get the full spectrum of ideas on the table for the passive readers. I think this a worthy goal, and I think is happening.

And at least point-counter-point is happening in the electronic cosmos, regardless of actual readership. It is the wider reading audience who gains most from this on-going exchange.

Thank you SB Independent for not burying this exchange but keeping it linked on your homepage. Paucity of rebuttal speaks as loudly as points gained or lost.

Oblati (anonymous profile)
December 13, 2012 at 8:42 a.m. (Suggest removal)

@hodgmo...oh, hell @everyone

I have not. Taxes are going to continue to increase until the end of time whether people like it or not. I believe in paying taxes, I believe in education and I believe in paying educators well probably because my mother was a public school teacher for 35 years. I saw how hard she worked. She was a fantastic teacher who often expressed disdain for the union politics that interrupted her ability to educate.

Because I grew up around my mom and her friends, who were also public school teachers, I also believe that reform is needed to ensure that funding is used efficiently, that teachers are held accountable for their performance and so that politics and personal interests aren't allowed to interfere with the quality of public education.

I understand and or agree with much of what Oblati and Ken have said-they each have some good points-but not with how they chosen to engage in "discussion". We have witnessed increasing gridlock at the local, state and federal government levels over the past 15-20 years as a result of what appears to be politically motivated unwillingness to compromise or work together to solve problems.

Ideas are interesting. Demonstrating cognitive flexibility and problem solving skills is much more impressive than digging in or calling your opponent a "lib", "tea-bagger", union "shill" etc. in an effort to diminish their point of view.

Kingprawn (anonymous profile)
December 13, 2012 at 9:14 a.m. (Suggest removal)

Public pensions are funded with public tax dollars, dedicated to making prudent investments to ensure promised pay-outs. Taxpayers are left on the hook when the public pension funds fail to meet their promises, because these fiducuiary promises must be upheld.

Comparing payouts of public and private pension plans is an exercise in futility because the underlying fundamentals are so non-compatable.

Continuing in this failed line of argument as we are now witnessing here only perpetuates the wounded howls of public employees confirming their sense of victimhood - clearly a tried and true public employee union tactic: we are underpaid, over-worked and under-appreciated. Pay up taxpayers or else.

Oblati (anonymous profile)
December 13, 2012 at 9:21 a.m. (Suggest removal)

Comparing public and private pensions is realistic and valid because the funds are managed the same way. The fund managers have the same goals and similar resources. And most if not all of the companies listed above are publically traded – a significant slice of the public owns the shares, and therefore is funding the pensions. The failure of any of the major pensions, public or private, will have similar effects.

hodgmo (anonymous profile)
December 13, 2012 at 9:55 a.m. (Suggest removal)

There are a few chestnuts to mine within this wide-ranging exchange. Ideas that should gain traction for education reform that can be accomplished by our local school boards here and now:

1. Stop tracking every student into college prep. Bring back serious vocational education at the K-12 level that leads to jobs post graduation or with only a two-year college vocational certificate that are hand-on, and won't be out-sourced. Some kids are intellectually gifted; some kids are mechanically gifted. Honor them both.

Both groups of students are frustrated when schools force all students in to a one-size-fits-all education. Two-year colleges exist for those that change their minds later - and that can work both ways. Doors remain open for those with academic degrees to get vocational training and those who tracked into post K-12 into vocational can go back and resolve any later perceived academic deficiencies.

Use two-year colleges as an integrated part of an entire K-14 educational plan for young people, which is exactly what Lanny Ebenstein is proposing and is a darn good idea. Don't discard the idea because you don't like the speaker.

2. Accept the reforms here locally and get the Race to the Top money for our local schools. Forget the marching orders coming from the Sacramento-based teachers union driven agenda.

Oblati (anonymous profile)
December 13, 2012 at 10:01 a.m. (Suggest removal)

Some major ticking here:

hodgmo (anonymous profile)
December 13, 2012 at 10:20 a.m. (Suggest removal)

next time King Prawn buy a ticket.

Ken_Volok (anonymous profile)
December 13, 2012 at 10:30 a.m. (Suggest removal)

Any discussion about @Ken_Volok's comments is prohibited without the expressed written consent of @Ken_Volok...or the purchase of a "ticket".

Sure, sure.

Kingprawn (anonymous profile)
December 13, 2012 at 10:52 a.m. (Suggest removal)

I.e. I'm not emotionally invested in this online discussion.

Ken_Volok (anonymous profile)
December 13, 2012 at 11:37 a.m. (Suggest removal)

I believe you. All of your comments go to 11. One louder. If you had emotions you'd be a wreck.

Kingprawn (anonymous profile)
December 13, 2012 at 12:39 p.m. (Suggest removal)

I.e. I got it the first time. Ken finds discussions about Ken's contributions to discussions boring.

Kingprawn (anonymous profile)
December 13, 2012 at 1:02 p.m. (Suggest removal)

Actually several of KV's comments have been thoughtful and to the point. King Prawn is only on these threads for his own amusement, according to him, so KV he's just playing with you. You are serious, and so am I. Oblati just rants, & King Prawn likes to make fun of all of us who are trying to be serious. And I have indeed checked some of O's refs and commented about them.

DrDan (anonymous profile)
December 13, 2012 at 1:18 p.m. (Suggest removal)

@hodgmo, you got it. When Oblati made the unsubstantiated claim that "public pensions are unsustainable", I wanted to offer data to others so they could make up their minds whether he/she was blowing smoke or not.

The data from my sampling clearly shows the big CA public pensions, teacher pensions, and our own SB County pension are on par with the private-sector.

Combine the above with the knowledge that pension analysts have concluded the relatively low funding levels of pensions since the recession and beyond are heavily impacted by the poor shape of the economy & markets ... despite ongoing and increased contributions into the pensions. Now you've got some data to draw some conclusions.

To answer your question ... of the large S&P500 companies, 338 have pensions. Some are open to new employees, some are not. Of those, only 18 were fully funded as of summer 2012. This from the NYT Business Section (I lost the link).

Beware that some of those companies will claim very high funding levels ... but that's based on an optional accounting practice where they use "accumulated" pension obligations to estimate their funding level. This considers only payouts necessary if the pension closed today - it doesn't consider future obligations to current or future retirees.

All the funding levels I reported are standard in that they are based on current & future obligations (i.e. the worst case).

EastBeach (anonymous profile)
December 13, 2012 at 2:37 p.m. (Suggest removal)

Good on ya, DrDan. You're doing what I've been suggesting Ken should do.

Kingprawn (anonymous profile)
December 13, 2012 at 2:51 p.m. (Suggest removal)

And what pray tell might that be? Stop providing free fodder for cranks?

Ken_Volok (anonymous profile)
December 13, 2012 at 3:02 p.m. (Suggest removal)

Reflection, buddy. You're clearly smart, but you're prone to using superlatives and your posts often (not all the time) suggest an unwillingness to really try to understand people who have ideas or beliefs that differ from your own.

DrDan is the similar but a little meaner and way more dismissive.

Kingprawn (anonymous profile)
December 13, 2012 at 3:37 p.m. (Suggest removal)

Do private companies go to the taxpayers to make up deficiencies in their pensions plans? (Okay, too easy of course - look no further than Government Motors)

The more elucidating list is all the primary US industries that went bankrupt over their pension liabilities forcing them to produce products no longer competitive in the global marketplace.

Citing a mere list of private companies as some sort of justification for continued tax payer bailouts of failed public pension plans is meaningless -- but I suppose this is good enough to keep some troops satisfied this passed for cogent argument and continued justification of this looming unfunded trillion dollar liability (aka - an unsustainable pension plan).

Even Gov Brown who admitted up front in his current administration public pensions need to be reformed. Quickly. The rest here is smokescreen. Admit it.

I am also sure private corporations will be pleased to learn those often associated with the Eat the Rich, Malign the 1% and Occupy crowd now look to private industry corporate pensions as a model of best practices.

Who would have guessed. There is an underlying belief if the principles of Protestant Capitalism after all.

But back to basics: defined-benefit pension plans for public employees were a mistake. They will cease to exist. Hold on to your own vested rights in the old plans; but they are now extinct for all new workers. This is the better course of action. It is the sustainable course of action.

Defined-benefit public employee plans that demand present dollars be used to backfill over-bloated promises to retirees are unsustainable and need a quick and hasty death. They were a mistake. And they are sapping the economic growth of this state.

Defined-benefit pension plans were predicated on sustained economic growth of this state which now is suffering because of its massive public employee benefit burdens. One has to love the irony here.

Oblati (anonymous profile)
December 13, 2012 at 3:37 p.m. (Suggest removal)

You just gotta love this comment from Sandra Doria:

"If you don’t have enough in the bank, and you aren’t going to raise tax rates, then you resort to a CAB,” said Sandra Doria, business manager for the Hope Elementary School District."

It absolutely, completely does not occur to Ms. Doria that another option is to *cut spending* or *improve efficiencies local government and schools by deploying the right incentives*.

If Prop 32 had *not* passed, we would only be at 2007 spending levels. That would be only about a 6% below where we are spending today. There is at least 20% of unnecessary spending within the 225% increase in staffing of non-classroom workers in the SB School District over the past 20 years.

Unbelievable what these people will do and how they think.

willy88 (anonymous profile)
December 13, 2012 at 3:49 p.m. (Suggest removal)

ahh, I love it when his omniscience knows all, and it's so much fun for him as well. But yeah, I am meaner, and it's easy to dismiss you KP.

DrDan (anonymous profile)
December 13, 2012 at 5:15 p.m. (Suggest removal)

oops, I meant it's easy to dismiss your pontificating, Kingprawn.

DrDan (anonymous profile)
December 13, 2012 at 5:17 p.m. (Suggest removal)

Did you write the algorithms yourself, DrDan?

Kingprawn (anonymous profile)
December 13, 2012 at 6:41 p.m. (Suggest removal)

Reported today that projected state tax revenues are already down 10%. And this means what?

Go back a few posts to review the primer about the state budgeting process and the various benchmarks used to see if the projected budget holds.

Ooops, it didn't. Prop 30 has now just been rendered meaningless. Surely there must be some more rich people left in this state to fleece. Zut alors, we simply cannot cut back on spending. Nein.

Oblati (anonymous profile)
December 13, 2012 at 7:07 p.m. (Suggest removal)

"Citing a mere list of private companies as some sort of justification for continued tax payer bailouts of failed public pension plans is meaningless ..."
-- Oblati

@Oblati, I challenge you to quote any of my previous comments where I said anything remotely similar to what you are attributing to me. You can't.

You've been putting words into the mouths of others, myself included. In case you didn't realize that, let me summarize ...

With no data or analysis based on data, you made a claim that "public pensions are unsustainable".

I found your claim interesting. Was it true or false? To provide myself and other readers with data so we could draw our own conclusions, I produced hard data indicating public pensions are arguably no better or worse off than private-sector pensions. And I said as much.

Now here's the FUNNY FUNNY part. Read all my posts carefully. You will note that I never posted *any* judgement or conclusion about whether your original claim was true or false!!! I merely put out my data to see what conclusions other readers would reach !!!

I don't want to be mean Oblati, but your reading comprehension has failed you ... that or you're an idealogue.

EastBeach (anonymous profile)
December 13, 2012 at 7:11 p.m. (Suggest removal)

"Now here's the FUNNY FUNNY part..." @EastBeach

I think you mean the status quo around here. We all know that it is unpossible to understand points of view that differ from our own. So why even try?

Never give an inch, Oblati. If you read EastBeach's comments in entirety you'll almost certainly be indoctrinated by the wizardry of the trickster's words. Heck, you'll probably find yourself in line for a handout at DSHS tomorrow morning and you won't remember how you got there! You are the knower, nay, the decider. Eastbeach is the liberal, union lovin', nanny-state smoochin', race-card playin', socialism espousin', freedom suckin' enemy of all that is holy. Get 'im.

Kingprawn (anonymous profile)
December 13, 2012 at 8:14 p.m. (Suggest removal)

observe Kingprawn stoking the pseudo-debate for his own enjoyment. "Get 'im," he intones.
EastBeach has offered solid web references and has taken Oblati's pension claims seriously, and O has no response, has never challenged any of his careful research, thus no actual dialogue, thus O's obviously an ideologue or a paid hack or both. Readers should carefully peruse EB's detailed & factual responses re. how public pensions in Calif. stand. I quote him:
"Here's a look at the latest funded status of pensions for local/state public pensions and some commerical companies doing busines in our area (higher % is better):
ATK, 71%
Catepillar, 68%
Lockheed Martin, 67%
Raytheon, 72%
ATK is Alliant Tech in Goleta, CALSTRS is the CA teachers pension, CALPERS/PERF is the CA state pension (PERF is their largest plan), Catepillar is the tractor company, Raytheon and Lockheed are in Goleta, and SBCERS is the SB County pension."

Most teachers, unless in Montecito Union District, aren't paid terribly well and both deserve and need their public pensions. O simply hates teachers (despite his pious treacle), hates paying taxes, and rants the same screed ad nauseum.
These public plans in many cases do need to be capped, and carefully scrutinized for abuses.
Kingprawn is obviously highly intelligent, but s/he simply likes to poke around and engender argumentation for his/her own enjoyment (not edification). Why not show some humanity and contribute your own ideas and points for these discussions?

DrDan (anonymous profile)
December 14, 2012 at 8:13 a.m. (Suggest removal)

Eastbeach's list is an argument for nothing. Public pensions are supported by public tax dollars and they are clearly unsustainable in their present configuration. They must be reformed to become defined contribution plans. End of discussion.

And there is finally movement in this direction. Look no further than SB County who recognized they had unsustainable public pension plans.

Making public pension plans "sustainable" by diverting more and more present resources in to them is not "sustainable". Nor can public agencies generate more sustainable pension income when promised rates of return fail and present budgets have to be raided to "sustain" their unfunded mandates.

Public pensions have to stand or fall on their own merits. So defined-benefit plans fail today by any measurement of their future success and shall be eliminated for all future workers.

Again, comparing today's public pension funding levels to those remaining defined-benefit plans found in private (profit-generating) industry is a meaningless exercise. Eastbeach knows this. I know it and certainly King Prawn knows this.

But I can see where this union-generated smokescreen argument is trying to go, and King Prawn described this diversionary tactic perfectly,

Not to worry KP, I can smell Union-Speak at a thousand paces. After all, their intellectual capacities were hot-housed in too many years of failed California public education. They trip themselves up themselves.

It is like shooting fish in a barrel. Almost too easy, but it is good to have these specious Union-Speak arguments trotted out for public review and public rebuke. That is the value of this continuing dialogue.

Oblati (anonymous profile)
December 14, 2012 at 11:30 a.m. (Suggest removal)

when Oblati starts with "Public pensions are supported by public tax dollars..." why s/he's totally correct! That's the law, and that's how you define "pension". So to quote O again from the same post, "End of discussion."

DrDan (anonymous profile)
December 14, 2012 at 4:39 p.m. (Suggest removal)

Ergo, when public tax dollars run out, so to the public pensions. End of story. End of boondoggle.

Oblati (anonymous profile)
December 14, 2012 at 5 p.m. (Suggest removal)

Here is the deal. Public employees pay into their pension plans X numbers of dollars. Pension investments grow at an Y rate of return.

However, previous pension promises were made to pay out X+Y+Z (defined benefit plans).

When X + Y are insufficient to pay what was promised as they are now, Z now has to come from general state operating revenues to back-fill those defined-benefit pension promises.

The extra promised Z therefore must be taken from present state revenues that should have been made available to schools, prisons, social services and state infrastructure in the present.

Z could be taken from the massive X dollar principal held by CALSTRS and CALPERS, but in fact X belongs to a lot more people than just the one demanding to get paid X+Y+Z.

The X dollars and the Y investment rate of return is therefore currently "unsustainable" when unions ordered the pay out X+Y+Z. (Defined-benefit plans)

Defined contribution plans mean the future pension will consist of X + Y, but no extra promise of Z.

Defined-benefit plans were a mistake. The available dollars and demand for present state services cannot support them. Defined-benefit pension plans are unsustainable.

Unsustainable public defined-benefit pension plans cannabilize our present needs and serve only those no longer working or producing. All state tax supported employee must convert to defined-contribution plans as much as legally possible.

Oblati (anonymous profile)
December 14, 2012 at 5:16 p.m. (Suggest removal)

State pension plans long promised they would return 8% to support pension benefits. However for years they were only returning 2%. How did they respond to this new fiscal reality? They reduced their promised rate of return to 7.5%.

So where does the short-fall between promised rates of returns and actual rates of return get made up? Out of present state tax payer funded operating budgets. Retired employees walk off with what they were promised under their defined-beneift plans.

Present workers and programs have to make up the differenc,e taking dollars away from present needs. Tax payers then get dunned by "starving" present workers to make up the difference that was promised to past employees.

Just so you know the next round of parcel taxes does in fact go to the unions.

Oblati (anonymous profile)
December 19, 2012 at 9:02 a.m. (Suggest removal)

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