California Court Rules Teacher Tenure Unconsitutional

26,555 Views | 216 Replies | Last: 11 yr ago by Unit2Sucks
southseasbear
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Big C_Cal;842325834 said:

I believe that bill refers to "gross misconduct" cases, whereas the subject here is geared more towards "significantly below average" to "way below average" teachers.


The bill specifies two tiers for dismissal, not just "gross misconduct."
southseasbear
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OdontoBear66;842325711 said:

Those rights, I believe I indicated, were abused before Taft-Hartley, and my best guess was for a period of time thereafter. Those protections have long since been cast in concrete. It is the reach of unions to protect their bureaucracy and the forced contributions from "all" members that go to lobbying that I find objectionable. If you have read any other appeals of mine in this thread and others it is toward a moderate stance. I do not think you would find me objecting to any of the rights you have listed above. And I do think you know what my reference is to---that of unions existing for unions per se, not for "the kids" as they infer in any way.

Let me give you an example. I am a member of AARP. I get certain benefits, but object to most of their political stances. I can weigh whether the benefits I get are more important than the philosophy I disagree with, and decide as to continue being a member or not. Or if I were to work for a bank or a brokerage house, or an insurance company I would not be forced to have a portion of my salary go to a political party I did not agree with. Something along that order, but not specifically correct.


First, Taft-Hartley does not apply to public sector.

Second, unions neither "infer" nor imply that they are "for the kids." To the contrary, unions have a statutory duty to represent their members, but the members (teachers) are "for the kids" sacrificing a significant amount of time (and sometimes their very lives) to the students entrusted to them.

Third, anyone can "opt out" of the portion of dues that goes to political causes. It is not a significant savings as teacher unions in California limit this amount to $6 per year (but usually pay less). When teacher unions contribute funds to politicians it is from their PAC accounts to which members voluntarily contribute.
1979bear
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Have any of the teachers posting here gone to bat for the administration (and yourselves) to testify against the bad teachers or otherwise worked to remove them?
wifeisafurd
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southseasbear;842325695 said:

The bipartisan bill predates the Vergara verdict and was a response to the bill proposed by Alex Padilla that would have destroyed due process protections. Without writing a treatise on its flaws, the bottom line is that teachers would still have had the "right" to a hearing before an administrative law judge, but the opinion would be advisory, so even if a teacher had compelling evidence to dispute frivolous charges, the district would retain sole discretion to dismiss. Now some of you may say, "so what, that's what happens in private sector." It's important to understand that public sector employees make less than those in private sector, and (more importantly) there is a stigma in public sector, particularly education, regarding employees dismissed elsewhere. You may get "let go" from a bank, movie studio, law firm, etc. and still find a job elsewhere; that is not the case with public school teachers.

The current bipartisan bill is supported by CTA (and I think CFT) but it too has flaws: it requires districts to reveal any allegations of a serious matter regardless of how old and regardless of the outcome. So, an innocent teacher is accused of child abuse (which happens all the time, as retaliatory students have learned it gets the teacher removed from the school for months, even if the teacher gets to keep his/her job), exonerated, and then ten years later chooses to move to another part of the state. The district would have to reveal the allegations to the prospective employer.


You don't think its suspicious that both the state senate and assembly only voted on the bill after the decision was announced? Also, you don't think the only reason that the unions supported the bill was the decision?
1979bear
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wifeisafurd;842325992 said:

You don't think its suspicious that both the state senate and assembly only voted on the bill after the decision was announced? Also, you don't think the only reason that the unions supported the bill was the decision?


Nice no BS observation.
wifeisafurd
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Big C_Cal;842325834 said:

I believe that bill refers to "gross misconduct" cases, whereas the subject here is geared more towards "significantly below average" to "way below average" teachers.


Or acts of incompetence are included in gross misconduct. I do appreciate that when people here gross misconduct these days they automatically think of sex abuse, and I appreciate that students who are disciplined use abuse as a shield, even when its absurd (we had a friend (a slight woman) who was accused of physically abusing a very large gang member who she disciplined). But gross misconduct is much broader than abuse cases.
88Bear
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1979bear;842325987 said:

Have any of the teachers posting here gone to bat for the administration (and yourselves) to testify against the bad teachers or otherwise worked to remove them?


Are you freaking kidding me?

This is rapidly turning into one of the most unsettling threads that I have ever read on this site.

In response to your question - are they somehow obligated to? Which of you "non-teachers' has swooped in (regarding your respective profession) and gone 'to-the-mat' to eradicate the perceived wrongdoing in your workplace? What a crock of crap. How is a teacher more obligated to take on the health of an entire school than you are to somehow 'fix' your place of employment? There are a whole lot of "high horses" on this site.

The amount here that folks don't know about collective bargaining can't be shoehorned into Memorial Stadium.

The notion that people somehow can't be fired if they are under an MOU - teachers specifically in this thread - is flat ridiculous. I hope the folks here realize that when a Union signs a contract, it is also signed by MANAGEMENT. The protections extended (or won) in contract negotiations are usually gained over time by concessions in some other area which are demanded by management. Grievances occur when management is guilty (or at least accused) of not following the contract that they themselves helped craft.

My wife is a Director of HR for a large private company. I work for a Union. We regularly discuss how often an employee's case arises to some crisis level because a great many managers simply won't manage. If management simply crosses their 't's and dots their 'i's - see DOCUMENTS - their case against an employee over a reasonable time (say 6 months), it is usually a slam dunk to terminate them. I'm not directly knowledgeable about how long it takes to terminate an ineffective teacher, but I'm virtually certain it is eminently doable. MY guess is that it typically doesn't happen because most Administrators simply won't take the time to perform their due diligence.

I'd also really like to hear how many folks here have ever even read a union contract. I think most would find the content to be more than reasonable. Wages, hours, working conditions. Management always retains the right to manage.
southseasbear
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BearGoggles;842325755 said:

No one has suggested that teachers should be deprived due process or denied "just cause" protections. The problem is that the current tenure regime (that is an apt description of it, even if the actual word is not used in statutes or CBAs) makes firing a teacher prohibitively expensive and time consuming.

Notwithstanding your assertion that they have no blame, the unions are absolutely to blame for intentionally creating a system where firing a teacher is next to impossible. Your assertion that this system "benefits the employer" is laughable - if that was the case why would the Unions be fighting any and all reforms to the current system?

Moreover, there has been extensive reporting on the lengthy time period and extremely high cost of firing teachers. The procedural roadblocks and attorneys fees create a strong disincentive to even try. "California has more than 1,000 school districts and 300,000 teachers, yet only 667 dismissal cases were filed with the Office of Administrative Hearings between January 2003 and March 2012, according to the Los Angeles Unified School District's chief labor and employment counsel, Alex Molina" (see linked CC Times article below). By any measure, this is not a system that benefits the employer, unless you believe that less than .3% (yes, less than 3/10ths of one percent) of teachers deserve to be fired.

Even in the rare circumstance a district does try to fire a teacher, the review "commissions", stacked by the Unions and their political cronies, often fail to fire teachers even in extreme circumstances (such as a teacher found with porn, pot, and coke at school).

So the issue isn't due process. The issue is that the process has become so expensive and time consuming, that it is almost impossible to fire a teacher even for just cause. The problem is so bad, that in NY, they are simply paying teachers not to teach, rather than firing them.

http://articles.latimes.com/2009/may/03/local/me-teachers3

http://www.contracostatimes.com/ci_22454532/firing-tenured-teacher-california-can-be-tough

http://www.huffingtonpost.com/2009/06/22/new-york-teachers-paid-to_n_219336.html


First, I can't speak to New York. Indeed, the Vergara case doesn't affect New York.

Second, as I stated before, the statistics regarding the number of teachers who went through the dismissal process are skewed by the large number of employees who resign rather than face the indignity of being fired. This is particularly true in districts that offer some form of retiree health benefits (better to resign and retire than be dismissed).

Third, it is not "almost impossible" to fire a teacher - at least not for a competent administrator. The problem is that most (I'm not exaggerating) administrators are not competent. In many cases they are failed teachers who couldn't cut it in a classroom.

Fourth, unions are not "fighting any and all reforms." Perhaps you missed it, but there is reform legislation backed by the unions making its way through the legislature. A previous bill, also supported by the unions, was vetoed by the Governor last year.

Fifth, I know Alex Molina. He and his boss (John Deasy) would like to fire experienced teachers because they have higher salaries and can be replaced by younger, cheaper, newer teachers fresh out of graduate programs. This is all part of trying to replicate private sector culture; remember, it's called "downsizing." Yes, so-called "tenure" exists to prevent that abuse.
Big C
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1979bear;842325987 said:

Have any of the teachers posting here gone to bat for the administration (and yourselves) to testify against the bad teachers or otherwise worked to remove them?


"Testify" against the bad teachers? Do you realize how little observation teachers do of other teachers?

"Yeah, from what I hear from some of my students, Teacher X is pretty lame." That'd really hold up, wouldn't it?

As for "working to remove them", I can say that, at each of the three high schools I have worked at, the social culture was such that those generally recognized as good teachers have been considered "cool" (regardless of age or teaching style) and are respected by their peers. Those considered significantly below average tend to be shunned: It's kinda awkward. A group will be in the lunchroom and it'll be like "Oh, hi Bob."
1979bear
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88Bear;842326003 said:

Are you freaking kidding me?

This is rapidly turning into one of the most unsettling threads that I have ever read on this site.

In response to your question - are they somehow obligated to? Which of you "non-teachers' has swooped in (regarding your respective profession) and gone 'to-the-mat' to eradicate the perceived wrongdoing in your workplace? What a crock of crap. How is a teacher more obligated to take on the health of an entire school than you are to somehow 'fix' your place of employment? There are a whole lot of "high horses" on this site.

The amount here that folks don't know about collective bargaining can't be shoehorned into Memorial Stadium.

The notion that people somehow can't be fired if they are under an MOU - teachers specifically in this thread - is flat ridiculous. I hope the folks here realize that when a Union signs a contract, it is also signed by MANAGEMENT. The protections extended (or won) in contract negotiations are usually gained over time by concessions in some other area which are demanded by management. Grievances occur when management is guilty (or at least accused) of not following the contract that they themselves helped craft.

My wife is a Director of HR for a large private company. I work for a Union. We regularly discuss how often an employee's case arises to some crisis level because a great many managers simply won't manage. If management simply crosses their 't's and dots their 'i's - see DOCUMENTS - their case against an employee over a reasonable time (say 6 months), it is usually a slam dunk to terminate them. I'm not directly knowledgeable about how long it takes to terminate an ineffective teacher, but I'm virtually certain it is eminently doable. MY guess is that it typically doesn't happen because most Administrators simply won't take the time to perform their due diligence.

I'd also really like to hear how many folks here have ever even read a union contract. I think most would find the content to be more than reasonable. Wages, hours, working conditions. Management always retains the right to manage.


I take your answer as a "no". If you want someone out and don't help push them out, you aren't helping solve the problem. If the union contract prevents this assistance, you're reminding me why I walk through picket lines to buy things I don't need. At least you can be happy that Kershaw no hit the Rockies just now.
88Bear
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1979bear;842326017 said:

I take your answer as a "no". If you want someone out and don't help push them out, you aren't helping solve the problem. If the union contract prevents this assistance, you're reminding me why I walk through picket lines to buy things I don't need. At least you can be happy that Kershaw no hit the Rockies just now.


This is a nonsensical take.

No contract obligates members to attempt to ruin the careers of other members. Discipline is the purview of management.

I really don't see where this is any different than private industry.

Frankly, I could care less if you are anti-union. Suffice it to say that we don't agree. The middle-class virtually owes any quality in its collective 'work life' to unions, but each to their own.

(In addition, I have absolutely no idea what your Kershaw comment means. Are you making some reference to the player's union?)
southseasbear
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88Bear;842326034 said:

This is a nonsensical take.

No contract obligates members to attempt to ruin the careers of other members. Discipline is the purview of management.

I really don't see where this is any different than private industry.

Frankly, I could care less if you are anti-union. Suffice it to say that we don't agree. The middle-class virtually owes any quality in its collective 'work life' to unions, but each to their own.

(In addition, I have absolutely no idea what your Kershaw comment means. Are you making some reference to the player's union?)


Is 1979bear actually suggesting that teachers leave their classrooms (an act that would endanger their jobs as well as their credentials) to go spy on other teachers and then report to management? Seriously? The administrators get higher pay and no classes (even college administrators at times teach class) so that they can walk around and drop in on classes to observe teachers and students. If they are not doing their jobs (and, unfortunately, too many do not as they are more content to sit at their desks to feel and look important) then that is the problem, not the fact that teachers aren't picking up the slack for their overpaid bosses.

How do teachers know that a colleague or two aren't doing their jobs? Simple, they observe how ill-prepared those students are compared with others. Everyone at a school knows when there is "dead wood." The administrators should know, if they are paying attention. If they don't know, fire the administrators and replace them with people who are willing get off their butts to do their jobs.
southseasbear
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By the way, for a great overview of the issues in Vergara, please read this article from the LA Times (an anti-union paper) that appeared in the Business (!) Section yesterday:


http://eedition2.latimes.com/Olive/ODE/LATimes/LandingPage/LandingPage.aspx?href=TEFULzIwMTQvMDYvMTg.&pageno=MTk.&entity=QXIwMTkwNA..&view=ZW50aXR5


Don't know how to post a link, but you can copy and paste the above into your browser.
cbbass1
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88Bear, I congratulate you for being an oasis of sanity in this discussion. What you assert is true -- the rise of the U.S. middle class, and the wealth of our nation, was driven by the New Deal and strong union membership, which helped to raise wages and salaries.

The economics are very simple: Workers = Consumers, and Wages & Salaries = Demand. When policies like the New Deal are implemented to keep wages & salaries high, as they were from the 1930s to the 1970s, the resulting demand drives the economy.

The essence of Reaganomics (aka 'Supply Side'/Voodoo/Trickle-Down Economics), and the ensuing War On The Middle Class, was that increasing corporate profits should be the policy goal, instead of high wages. To that end, high wages & salaries were seen as a problem -- not a positive.

The economy we have today is a direct result of these policies. Consumer demand is horribly low; small businesses are dying in towns everywhere because people can't afford what they used to buy.

Unfortunately, nearly our entire nation has bought into the Investor/Corporate view of the economy over the last 34 years, and we've collectively forgotten about what makes an economy work.

If you think that profits or investment drive the economy, then you've allowed yourself to be misled, and most likely, propagandized. And you would be [U]wrong[/U].

Does anyone actually think that by paying workers less, across the board, our consumer economy will improve?

A consumer economy is driven by the consumers' (i.e., workers') disposable income, their economic security, and their perception of future economic prospects. NOT the DJIA or the S&P 500 index.

The incessant union-bashing and complaints about employee incompetence are coming from an Investor/Corporate viewpoint. The premise is that if the organization isn't performing well, the lazy, overpaid employees and their union are to blame; and the solution is to get rid of the union, fire the "lowest-performing" 1/3 of employees, hire great, young, motivated employees to replace the fired ones -- at a lower salary(!) -- and of course, funnel greater rewards toward the administrators & managers who are able to accomplish this.

When I see this in action, I'm reminded of the old adage, "It's a poor carpenter who blames his tools."

In California, we're getting -- precisely -- the K-12 performance that we're paying for. Thanks to Prop 13 and the Investors' Revolt, CA is well below the national median in per-pupil funding (only $8378/pupil/yr in 2011), with no extra $$ to accommodate the needs of the large population of immigrants (many non-English-speaking) who are encouraged to join the oversupply of workers in the State -- for the purpose of keeping wages & salaries down!

Prop 13 was sold to us in 1978 because many seniors were, in fact, getting taxed out of their homes. This was due to the meteoric rise in the value of those homes! Today, the valuation exemption only applies to about 1% of the residences in CA, but it applies to all of the commercial properties. Here's how it works: http://closetheloophole.com/sf-weekly-prop-13. This is yet another way in which large corporations evade taxes, and push the State's tax burden onto the backs of workers and individuals.

I think that $8378/pupil/yr is outrageous and inadequate for CA. If we moved up to #10 (Minnesota, at $12,500), we would have much better results. All we would need to do is
+ update assessments on all CA commercial properties, and
+ release all non-violent drug offenders from CA prisons (and save ~$47,100 per inmate per year)
+ return management of CA prisons to the State

I believe in having excellent Public Education. That's why I went to Cal. It's an investment that we make in our students because we need them to be educated, intelligent, and to have good judgment.

That includes NOT being misled.
GivemTheAxe
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cbbass1;842327052 said:

88Bear, I congratulate you for being an oasis of sanity in this discussion. What you assert is true -- the rise of the U.S. middle class, and the wealth of our nation, was driven by the New Deal and strong union membership, which helped to raise wages and salaries.

The economics are very simple: Workers = Consumers, and Wages & Salaries = Demand. When policies like the New Deal are implemented to keep wages & salaries high, as they were from the 1930s to the 1970s, the resulting demand drives the economy.

The essence of Reaganomics (aka 'Supply Side'/Voodoo/Trickle-Down Economics), and the ensuing War On The Middle Class, was that increasing corporate profits should be the policy goal, instead of high wages. To that end, high wages & salaries were seen as a problem -- not a positive.

The economy we have today is a direct result of these policies. Consumer demand is horribly low; small businesses are dying in towns everywhere because people can't afford what they used to buy.

Unfortunately, nearly our entire nation has bought into the Investor/Corporate view of the economy over the last 34 years, and we've collectively forgotten about what makes an economy work.

If you think that profits or investment drive the economy, then you've allowed yourself to be misled, and most likely, propagandized. And you would be [U]wrong[/U].

Does anyone actually think that by paying workers less, across the board, our consumer economy will improve?

A consumer economy is driven by the consumers' (i.e., workers') disposable income, their economic security, and their perception of future economic prospects. NOT the DJIA or the S&P 500 index.

The incessant union-bashing and complaints about employee incompetence are coming from an Investor/Corporate viewpoint. The premise is that if the organization isn't performing well, the lazy, overpaid employees and their union are to blame; and the solution is to get rid of the union, fire the "lowest-performing" 1/3 of employees, hire great, young, motivated employees to replace the fired ones -- at a lower salary(!) -- and of course, funnel greater rewards toward the administrators & managers who are able to accomplish this.

When I see this in action, I'm reminded of the old adage, "It's a poor carpenter who blames his tools."

In California, we're getting -- precisely -- the K-12 performance that we're paying for. Thanks to Prop 13 and the Investors' Revolt, CA is well below the national median in per-pupil funding (only $8378/pupil/yr in 2011), with no extra $$ to accommodate the needs of the large population of immigrants (many non-English-speaking) who are encouraged to join the oversupply of workers in the State -- for the purpose of keeping wages & salaries down!

Prop 13 was sold to us in 1978 because many seniors were, in fact, getting taxed out of their homes. This was due to the meteoric rise in the value of those homes! Today, the valuation exemption only applies to about 1% of the residences in CA, but it applies to all of the commercial properties. Here's how it works: http://closetheloophole.com/sf-weekly-prop-13. This is yet another way in which large corporations evade taxes, and push the State's tax burden onto the backs of workers and individuals.

I think that $8378/pupil/yr is outrageous and inadequate for CA. If we moved up to #10 (Minnesota, at $12,500), we would have much better results. All we would need to do is
+ update assessments on all CA commercial properties, and
+ release all non-violent drug offenders from CA prisons (and save ~$47,100 per inmate per year)
+ return management of CA prisons to the State

I believe in having excellent Public Education. That's why I went to Cal. It's an investment that we make in our students because we need them to be educated, intelligent, and to have good judgment.

That includes NOT being misled.


Thanks for your post.
IMO many of the criticisms of the recent BART strikers were based on the Investor/corporate viewpoint. They were criticized because they were among the highest paid transit workers in the nation, while failing to mention that the Bay Area has among the highest cost of living in the nation. Did we hear anything about the salaries of BART management being among the highest in the nation.
IMO the criticism was driven to create envy and dissension among "the Middle class". What the public should have been asking was not "why are the BART workers getting paid so much". But "why am I not also getting paid more". This last question the investor/corporate group does not want workers to ask.
jyamada
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cbbass1;842327052 said:

88Bear, I congratulate you for being an oasis of sanity in this discussion. What you assert is true -- the rise of the U.S. middle class, and the wealth of our nation, was driven by the New Deal and strong union membership, which helped to raise wages and salaries.



The economics are very simple: Workers = Consumers, and Wages & Salaries = Demand. When policies like the New Deal are implemented to keep wages & salaries high, as they were from the 1930s to the 1970s, the resulting demand drives the economy.

The essence of Reaganomics (aka 'Supply Side'/Voodoo/Trickle-Down Economics), and the ensuing War On The Middle Class, was that increasing corporate profits should be the policy goal, instead of high wages. To that end, high wages & salaries were seen as a problem -- not a positive.

The economy we have today is a direct result of these policies. Consumer demand is horribly low; small businesses are dying in towns everywhere because people can't afford what they used to buy.

Unfortunately, nearly our entire nation has bought into the Investor/Corporate view of the economy over the last 34 years, and we've collectively forgotten about what makes an economy work.

If you think that profits or investment drive the economy, then you've allowed yourself to be misled, and most likely, propagandized. And you would be [U]wrong[/U].

Does anyone actually think that by paying workers less, across the board, our consumer economy will improve?

A consumer economy is driven by the consumers' (i.e., workers') disposable income, their economic security, and their perception of future economic prospects. NOT the DJIA or the S&P 500 index.

The incessant union-bashing and complaints about employee incompetence are coming from an Investor/Corporate viewpoint. The premise is that if the organization isn't performing well, the lazy, overpaid employees and their union are to blame; and the solution is to get rid of the union, fire the "lowest-performing" 1/3 of employees, hire great, young, motivated employees to replace the fired ones -- at a lower salary(!) -- and of course, funnel greater rewards toward the administrators & managers who are able to accomplish this.

When I see this in action, I'm reminded of the old adage, "It's a poor carpenter who blames his tools."

In California, we're getting -- precisely -- the K-12 performance that we're paying for. Thanks to Prop 13 and the Investors' Revolt, CA is well below the national median in per-pupil funding (only $8378/pupil/yr in 2011), with no extra $$ to accommodate the needs of the large population of immigrants (many non-English-speaking) who are encouraged to join the oversupply of workers in the State -- for the purpose of keeping wages & salaries down!

Prop 13 was sold to us in 1978 because many seniors were, in fact, getting taxed out of their homes. This was due to the meteoric rise in the value of those homes! Today, the valuation exemption only applies to about 1% of the residences in CA, but it applies to all of the commercial properties. Here's how it works: http://closetheloophole.com/sf-weekly-prop-13. This is yet another way in which large corporations evade taxes, and push the State's tax burden onto the backs of workers and individuals.

I think that $8378/pupil/yr is outrageous and inadequate for CA. If we moved up to #10 (Minnesota, at $12,500), we would have much better results. All we would need to do is
+ update assessments on all CA commercial properties, and
+ release all non-violent drug offenders from CA prisons (and save ~$47,100 per inmate per year)
+ return management of CA prisons to the State

I believe in having excellent Public Education. That's why I went to Cal. It's an investment that we make in our students because we need them to be educated, intelligent, and to have good judgment.

That includes NOT being misled.


Nice post, CB!
88Bear
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cbbass1;842327052 said:

88Bear, I congratulate you for being an oasis of sanity in this discussion. What you assert is true -- the rise of the U.S. middle class, and the wealth of our nation, was driven by the New Deal and strong union membership, which helped to raise wages and salaries.

The economics are very simple: Workers = Consumers, and Wages & Salaries = Demand. When policies like the New Deal are implemented to keep wages & salaries high, as they were from the 1930s to the 1970s, the resulting demand drives the economy.

The essence of Reaganomics (aka 'Supply Side'/Voodoo/Trickle-Down Economics), and the ensuing War On The Middle Class, was that increasing corporate profits should be the policy goal, instead of high wages. To that end, high wages & salaries were seen as a problem -- not a positive.

The economy we have today is a direct result of these policies. Consumer demand is horribly low; small businesses are dying in towns everywhere because people can't afford what they used to buy.

Unfortunately, nearly our entire nation has bought into the Investor/Corporate view of the economy over the last 34 years, and we've collectively forgotten about what makes an economy work.

If you think that profits or investment drive the economy, then you've allowed yourself to be misled, and most likely, propagandized. And you would be [U]wrong[/U].

Does anyone actually think that by paying workers less, across the board, our consumer economy will improve?

A consumer economy is driven by the consumers' (i.e., workers') disposable income, their economic security, and their perception of future economic prospects. NOT the DJIA or the S&P 500 index.

The incessant union-bashing and complaints about employee incompetence are coming from an Investor/Corporate viewpoint. The premise is that if the organization isn't performing well, the lazy, overpaid employees and their union are to blame; and the solution is to get rid of the union, fire the "lowest-performing" 1/3 of employees, hire great, young, motivated employees to replace the fired ones -- at a lower salary(!) -- and of course, funnel greater rewards toward the administrators & managers who are able to accomplish this.

When I see this in action, I'm reminded of the old adage, "It's a poor carpenter who blames his tools."

In California, we're getting -- precisely -- the K-12 performance that we're paying for. Thanks to Prop 13 and the Investors' Revolt, CA is well below the national median in per-pupil funding (only $8378/pupil/yr in 2011), with no extra $$ to accommodate the needs of the large population of immigrants (many non-English-speaking) who are encouraged to join the oversupply of workers in the State -- for the purpose of keeping wages & salaries down!

Prop 13 was sold to us in 1978 because many seniors were, in fact, getting taxed out of their homes. This was due to the meteoric rise in the value of those homes! Today, the valuation exemption only applies to about 1% of the residences in CA, but it applies to all of the commercial properties. Here's how it works: http://closetheloophole.com/sf-weekly-prop-13. This is yet another way in which large corporations evade taxes, and push the State's tax burden onto the backs of workers and individuals.

I think that $8378/pupil/yr is outrageous and inadequate for CA. If we moved up to #10 (Minnesota, at $12,500), we would have much better results. All we would need to do is
+ update assessments on all CA commercial properties, and
+ release all non-violent drug offenders from CA prisons (and save ~$47,100 per inmate per year)
+ return management of CA prisons to the State

I believe in having excellent Public Education. That's why I went to Cal. It's an investment that we make in our students because we need them to be educated, intelligent, and to have good judgment.

That includes NOT being misled.


Right on.
wifeisafurd
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cbbass1;842327052 said:

88Bear, I congratulate you for being an oasis of sanity in this discussion. What you assert is true -- the rise of the U.S. middle class, and the wealth of our nation, was driven by the New Deal and strong union membership, which helped to raise wages and salaries.

The economics are very simple: Workers = Consumers, and Wages & Salaries = Demand. When policies like the New Deal are implemented to keep wages & salaries high, as they were from the 1930s to the 1970s, the resulting demand drives the economy.

The essence of Reaganomics (aka 'Supply Side'/Voodoo/Trickle-Down Economics), and the ensuing War On The Middle Class, was that increasing corporate profits should be the policy goal, instead of high wages. To that end, high wages & salaries were seen as a problem -- not a positive.

The economy we have today is a direct result of these policies. Consumer demand is horribly low; small businesses are dying in towns everywhere because people can't afford what they used to buy.

Unfortunately, nearly our entire nation has bought into the Investor/Corporate view of the economy over the last 34 years, and we've collectively forgotten about what makes an economy work.

If you think that profits or investment drive the economy, then you've allowed yourself to be misled, and most likely, propagandized. And you would be [U]wrong[/U].

Does anyone actually think that by paying workers less, across the board, our consumer economy will improve?

A consumer economy is driven by the consumers' (i.e., workers') disposable income, their economic security, and their perception of future economic prospects. NOT the DJIA or the S&P 500 index.

The incessant union-bashing and complaints about employee incompetence are coming from an Investor/Corporate viewpoint. The premise is that if the organization isn't performing well, the lazy, overpaid employees and their union are to blame; and the solution is to get rid of the union, fire the "lowest-performing" 1/3 of employees, hire great, young, motivated employees to replace the fired ones -- at a lower salary(!) -- and of course, funnel greater rewards toward the administrators & managers who are able to accomplish this.

When I see this in action, I'm reminded of the old adage, "It's a poor carpenter who blames his tools."

In California, we're getting -- precisely -- the K-12 performance that we're paying for. Thanks to Prop 13 and the Investors' Revolt, CA is well below the national median in per-pupil funding (only $8378/pupil/yr in 2011), with no extra $$ to accommodate the needs of the large population of immigrants (many non-English-speaking) who are encouraged to join the oversupply of workers in the State -- for the purpose of keeping wages & salaries down!

Prop 13 was sold to us in 1978 because many seniors were, in fact, getting taxed out of their homes. This was due to the meteoric rise in the value of those homes! Today, the valuation exemption only applies to about 1% of the residences in CA, but it applies to all of the commercial properties. Here's how it works: http://closetheloophole.com/sf-weekly-prop-13. This is yet another way in which large corporations evade taxes, and push the State's tax burden onto the backs of workers and individuals.

I think that $8378/pupil/yr is outrageous and inadequate for CA. If we moved up to #10 (Minnesota, at $12,500), we would have much better results. All we would need to do is
+ update assessments on all CA commercial properties, and
+ release all non-violent drug offenders from CA prisons (and save ~$47,100 per inmate per year)
+ return management of CA prisons to the State

I believe in having excellent Public Education. That's why I went to Cal. It's an investment that we make in our students because we need them to be educated, intelligent, and to have good judgment.

That includes NOT being misled.


Well this sounds more like the voice insanity to me.

California public schools are underfunded and the higher education is underfunded relative to most states. Yet California has been highest to second highest taxing state is the nation over the last 10 years, and has the highest (or second highest) tax rate for wealthy individual and corporations of all states over the last ten years, just in case you want to know who is paying for all this. So what else is the money being spent on? At some points your going to have to understand there is trade-off between public welfare, public services and employee compensation and funding the school system.

And what does the future hold? I doubt with your liberal rants you have read a California bond OS lately or even know what that is, but there is a huge future [U]unfunded [/U]pension liability that is not considered in the purported budget surplus (its off books), all of which you can learn about from doing some homework. Its so large that without the state declaring bankruptcy and "reorganizing" its obligations, you either will have to eliminate most social welfare programs for decades or devastate the school system. You could tax taxpayers in the top 25% at a 100% per the next 100 years and still not make a dent in the unfunded obligation. I don't think you understand that paying governmental workers way above what other governments do comes with a cost of pushing out governmental service (like education) because in the long run there really is a cap on taxes levels because people and capital make decisions to move, avoid taxes, or tax rebellions (so for example, you end up with votes choosing RR or Thatcher).

I don't want to get into a blow by blow response to each of your comments (and I agree with some, like how much Cali spends on prisoners is absurd (we certainly overpay our union guards), but the property tax issue is far more complicated than the garbage article you posted to. The residential numbers are just bogus. Do you have any conception how many people and companies rec'd Prop 8 reductions during the last recession (my guess is you have no clue of why this is significant and shows the articles claims are BS). And who gets these reductions? Or who would pay for the increase in taxes. Since you undoubtedly have no idea how a commercial lease works you probably don't know its the tenants, not the property owners. If there was a reassessment to today's market values, how many small tenants could afford to pay these massive increases? Brown will threaten and oppose any such effort because we are looking at massive unemployment cause by the collapse of small businesses. And some point public unions and public management need to understand that the private sector pays for their largess and there is a day of reckoning coming even without these incredibly short sided taxing concepts.

My sense is you see those who pay for the schools as evil and declaring war on you and your beloved unions. You speak in conspiratorial over the top language regarding forces that you think result in what essentially can be reduced to broader concept of income inequality. Since its clear you have no background economics, my suggestion is read Thomas Piketty's book on Capital (it bears that name) so you can actually get a some idea, from an actual data standpoint, the sources of income inequality, where and when it exists, and the implications of same. (Piketty btw is considered the leading economist on income distribution, and is a French socialist for those that like labels).

Suffice to say most taxpayers reading your rant don't want you teaching their kids, and if this the views of public teachers, won't support public educaton.
Cal_Fan2
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wifeisafurd;842327365 said:

Well this sounds more like the voice insanity to me.

California public schools are underfunded and the higher education is underfunded relative to most states. Yet California has been highest to second highest taxing state is the nation over the last 10 years, and has the highest (or second highest) tax rate for wealthy individual and corporations of all states over the last ten years, just in case you want to know who is paying for all this. So what else is the money being spent on? At some points your going to have to understand there is trade-off between public welfare, public services and employee compensation and funding the school system.

And what does the future hold? I doubt with your liberal rants you have read a California bond OS lately or even know what that is, but there is a huge future [U]unfunded [/U]pension liability that is not considered in the purported budget surplus (its off books), all of which you can learn about from doing some homework. Its so large that without the state declaring bankruptcy and "reorganizing" its obligations, you either will have to eliminate most social welfare programs for decades or devastate the school system. You could tax taxpayers in the top 25% at a 100% per the next 100 years and still not make a dent in the unfunded obligation. I don't think you understand that paying governmental workers way above what other governments do comes with a cost of pushing out governmental service (like education) because in the long run there really is a cap on taxes levels because people and capital make decisions to move, avoid taxes, or tax rebellions (so for example, you end up with votes choosing RR or Thatcher).

I don't want to get into a blow by blow response to each of your comments (and I agree with some, like how much Cali spends on prisoners is absurd (we certainly overpay our union guards), but the property tax issue is far more complicated than the garbage article you posted to. The residential numbers are just bogus. Do you have any conception how many people and companies rec'd Prop 8 reductions during the last recession (my guess is you have no clue of why this is significant and shows the articles claims are BS). And who gets these reductions? Or who would pay for the increase in taxes. Since you undoubtedly have no idea how a commercial lease works you probably don't know its the tenants, not the property owners. If there was a reassessment to today's market values, how many small tenants could afford to pay these massive increases? Brown will threaten and oppose any such effort because we are looking at massive unemployment cause by the collapse of small businesses. And some point public unions and public management need to understand that the private sector pays for their largess and there is a day of reckoning coming even without these incredibly short sided taxing concepts.

My sense is you see those who pay for the schools as evil and declaring war on you and your beloved unions. You speak in conspiratorial over the top language regarding forces that you think result in what essentially can be reduced to broader concept of income inequality. Since its clear you have no background economics, my suggestion is read Thomas Piketty's book on Capital (it bears that name) so you can actually get a some idea, from an actual data standpoint, the sources of income inequality, where and when it exists, and the implications of same. (Piketty btw is considered the leading economist on income distribution, and is a French socialist for those that like labels).

Suffice to say most taxpayers reading your rant don't want you teaching their kids, and if this the views of public teachers, won't support public educaton.


Nice post WIAF...

Right on.....
southseasbear
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wifeisafurd;842327365 said:

Well this sounds more like the voice insanity to me.

California public schools are underfunded and the higher education is underfunded relative to most states. Yet California has been highest to second highest taxing state is the nation over the last 10 years, and has the highest (or second highest) tax rate for wealthy individual and corporations of all states over the last ten years, just in case you want to know who is paying for all this. So what else is the money being spent on? At some points your going to have to understand there is trade-off between public welfare, public services and employee compensation and funding the school system.

And what does the future hold? I doubt with your liberal rants you have read a California bond OS lately or even know what that is, but there is a huge future [U]unfunded [/U]pension liability that is not considered in the purported budget surplus (its off books), all of which you can learn about from doing some homework. Its so large that without the state declaring bankruptcy and "reorganizing" its obligations, you either will have to eliminate most social welfare programs for decades or devastate the school system. You could tax taxpayers in the top 25% at a 100% per the next 100 years and still not make a dent in the unfunded obligation. I don't think you understand that paying governmental workers way above what other governments do comes with a cost of pushing out governmental service (like education) because in the long run there really is a cap on taxes levels because people and capital make decisions to move, avoid taxes, or tax rebellions (so for example, you end up with votes choosing RR or Thatcher).

I don't want to get into a blow by blow response to each of your comments (and I agree with some, like how much Cali spends on prisoners is absurd (we certainly overpay our union guards), but the property tax issue is far more complicated than the garbage article you posted to. The residential numbers are just bogus. Do you have any conception how many people and companies rec'd Prop 8 reductions during the last recession (my guess is you have no clue of why this is significant and shows the articles claims are BS). And who gets these reductions? Or who would pay for the increase in taxes. Since you undoubtedly have no idea how a commercial lease works you probably don't know its the tenants, not the property owners. If there was a reassessment to today's market values, how many small tenants could afford to pay these massive increases? Brown will threaten and oppose any such effort because we are looking at massive unemployment cause by the collapse of small businesses. And some point public unions and public management need to understand that the private sector pays for their largess and there is a day of reckoning coming even without these incredibly short sided taxing concepts.

My sense is you see those who pay for the schools as evil and declaring war on you and your beloved unions. You speak in conspiratorial over the top language regarding forces that you think result in what essentially can be reduced to broader concept of income inequality. Since its clear you have no background economics, my suggestion is read Thomas Piketty's book on Capital (it bears that name) so you can actually get a some idea, from an actual data standpoint, the sources of income inequality, where and when it exists, and the implications of same. (Piketty btw is considered the leading economist on income distribution, and is a French socialist for those that like labels).

Suffice to say most taxpayers reading your rant don't want you teaching their kids, and if this the views of public teachers, won't support public educaton.


Well, I will try to be brief in my response to your long rant (to use your word, since it applies to your angry and arrogant post).

I could write paragraphs on how unbecoming it is for you to attack 88Bear for his political views, on how you ignore the recent pension reforms that have been enacted (and which amount to serious paycuts for underpaid public employees), and even the spelling and diction errors, but I will focus on your last sentence:

[INDENT]Suffice to say most taxpayers reading your rant don't want you teaching their kids, and if this the views of public teachers, won't support public educaton [sic].[/INDENT]

First, where do you get the authority to believe that you speak on behalf of "most taxpayers?" Frankly, everyone is a "taxpayer," since even the poor who do not pay income tax devote a disproportionate amount of their limited funds to a regressive sales tax. So, you think you speak on behalf of most Californians? Or perhaps you mean those in your tax bracket?

Second, and more relative to the topic, I want to thank you for proving the need for so-called "tenure." You don't know what kind of teacher 88Bear is (actually, he is not a teacher, but that is a different matter) and yet you have decided that you and apparently some other people do not want him teaching your kids because of his/her political beliefs without regard to his abilities and job performance. Incredible! This is no different from taxpayers demanding that their school teachers attend the "right" churches.

The permanent teacher dismissal process was designed to prevent narrow minded people from making personnel decisions based on irrelevant factors such as one's political or religious beliefs. Yes, a district can fire a a bad teacher, one whose performance is below expectations, and a district can fire a teacher for misconduct. But to your great annoyance, a district cannot fire a teacher for having personal political beliefs such as those expressed (on a private message board) by 88Bear.

How proud you must feel with the trial court's Vergara decision. We are one step closer to making sure that teachers in your community worship at the right religious establishment, belong to the right club, date (and ultimately marry) the right person, read the right books (such as "Thomas Piketty's book on Capital"), and harbor the right political and economic beliefs.

Has it ever occurred to you that somewhere in a community miles away from yours, there is a teacher with similar beliefs to yours, beliefs that are unpopular in that particular area, but who is protected by having "just cause?"

More importantly, do you believe excluding people for factors such as those listed above will improve instruction in our schools? Perhaps you do, in which case we will have to agree to disagree.
88Bear
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wifeisafurd;842327365 said:

Well this sounds more like the voice insanity to me.

California public schools are underfunded and the higher education is underfunded relative to most states. Yet California has been highest to second highest taxing state is the nation over the last 10 years, and has the highest (or second highest) tax rate for wealthy individual and corporations of all states over the last ten years, just in case you want to know who is paying for all this. So what else is the money being spent on? At some points your going to have to understand there is trade-off between public welfare, public services and employee compensation and funding the school system.

And what does the future hold? I doubt with your liberal rants you have read a California bond OS lately or even know what that is, but there is a huge future [U]unfunded [/U]pension liability that is not considered in the purported budget surplus (its off books), all of which you can learn about from doing some homework. Its so large that without the state declaring bankruptcy and "reorganizing" its obligations, you either will have to eliminate most social welfare programs for decades or devastate the school system. You could tax taxpayers in the top 25% at a 100% per the next 100 years and still not make a dent in the unfunded obligation. I don't think you understand that paying governmental workers way above what other governments do comes with a cost of pushing out governmental service (like education) because in the long run there really is a cap on taxes levels because people and capital make decisions to move, avoid taxes, or tax rebellions (so for example, you end up with votes choosing RR or Thatcher).

I don't want to get into a blow by blow response to each of your comments (and I agree with some, like how much Cali spends on prisoners is absurd (we certainly overpay our union guards), but the property tax issue is far more complicated than the garbage article you posted to. The residential numbers are just bogus. Do you have any conception how many people and companies rec'd Prop 8 reductions during the last recession (my guess is you have no clue of why this is significant and shows the articles claims are BS). And who gets these reductions? Or who would pay for the increase in taxes. Since you undoubtedly have no idea how a commercial lease works you probably don't know its the tenants, not the property owners. If there was a reassessment to today's market values, how many small tenants could afford to pay these massive increases? Brown will threaten and oppose any such effort because we are looking at massive unemployment cause by the collapse of small businesses. And some point public unions and public management need to understand that the private sector pays for their largess and there is a day of reckoning coming even without these incredibly short sided taxing concepts.

My sense is you see those who pay for the schools as evil and declaring war on you and your beloved unions. You speak in conspiratorial over the top language regarding forces that you think result in what essentially can be reduced to broader concept of income inequality. Since its clear you have no background economics, my suggestion is read Thomas Piketty's book on Capital (it bears that name) so you can actually get a some idea, from an actual data standpoint, the sources of income inequality, where and when it exists, and the implications of same. (Piketty btw is considered the leading economist on income distribution, and is a French socialist for those that like labels).

Suffice to say most taxpayers reading your rant don't want you teaching their kids, and if this the views of public teachers, won't support public educaton.


Well, if the point of your post was to be as condescending and offensive as you could possibly be in what has been relatively respectful posting to this point, kudos!

I find it immediately telling that within your screed, you don't really address the fundamental issue of tenure, or education for that matter, rather you argue against the taxation rate and management of funds in the state of California - as a means of apparently justifying some odd, anti-union sentiment. If you are complaining that the management of PERS and the future of benefits for California civil employees is a problem - agreed. The argument regarding the long-term disposition of pensions in California is worth discussing, but it isn't 'the fault' of unions. I'm wondering if you know how union contracts are determined. Suffice it to say, the union side of 'the Table' does not dictate how pension funds are managed. They bargain for the dollar amount that the State will contribute.

In addition, it is ironic that you chastise the poster for his/her lack of 'homework' but provide zero support for your points. Rather than insult, why not actually attempt to educate if your point is so readily apparent? If you have some actual facts or articles/numbers which explain or detail the subject of reassessment of valuations within the real estate market, I for one am willing to learn. Educate me if you know better. At the same time, I feel extremely confident that your understanding of the state prison system is virtually nil as that is my area of knowledge. The pay and benefits of Correctional Officers is completely peripheral to any REAL numbers when you are talking about the state budget. Any ideas regarding what officers make? How many there are? What a 1% raise costs the state? What their MOU covers?

BTW, I actually have Piketty's book sitting in front of me right now. While I haven't completed it yet, I'm really wondering what part of it even remotely supports your apparent viewpoint? As you rightly point out, his position is FAR left of where you appear to be as income redistribution is an imperative from his point of view.

While it is clear that you were at some level offended by the anti-business/corporate elements within this thread, you have certainly replied in such a way as to ensure offense to those with which you might otherwise have had a productive discussion. If all you were about was demeaning those with a different opinion, then your post simply served to make you look egotistical.

I don't pretend to be anything other than 'adequate' in my limited understanding of economics, but I do understand the math and reality of the past 70 years - the economy of this country, as it pertains to the health of the middle class, has largely mirrored the health of the union movement as a whole. There is evidence that a union presence can have deleterious effects to straight profitability, but I would argue that profit is NOT the sole factor which should be used to determine the economic health of an entity. An economy exists solely to improve the life of its citizens. When the greatest number do not benefit, the economy is not democratic. The most ridiculous conflation that has been foisted upon the American psyche is that democracy and capitalism are synonymous. Nothing could be further from the truth.
wifeisafurd
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southseasbear;842327528 said:



I could write paragraphs on how unbecoming it is for you to attack 88Bear for his political views, on how you ignore the recent pension reforms that have been enacted (and which amount to serious paycuts for underpaid public employees....,


How proud you must feel with the trial court's Vergara decision. We are one step closer to making sure that teachers in your community worship at the right religious establishment, belong to the right club, date (and ultimately marry) the right person, read the right books (such as "Thomas Piketty's book on Capital"), and harbor the right political and economic beliefs.

.


Before I get into the detail, I have not said in any post that I disfavor the tenure system, though I did note that the legislature, with union support, has responded to the court's decision by making it much easier to fire teachers without even saying whether I view this as good or not.

Tenured teachers get laid off in mass when the PUBLIC schools get emasculated. Lets try some recent articles from the Chronicle, since I don't think you know what your talking about when it comes to pension shortfall or have any comprehension of what it means:

Just the teachers:
.
In Gov. Jerry Brown's promise to start paying off California's massive liabilities, the largest single unfunded debt will not be seeing any additional pay-down in the coming fiscal year.

The unfunded liability for teachers' pensions stands at more than $80 billion, a gap so large that the fund is projected to deplete all its assets in about 30 years. It is the largest single component of both the state's unfunded retirement liabilities, which the Department of Finance puts at nearly $218 billion, and of the state's overall $354 billion in long-term obligations.

Gov. Jerry Brown responds to a question concerning his proposed 2014-15 state budget he unveiled at a news conference at the Capitol in Sacramento, Calif.,
Gov. Jerry Brown responds to a question concerning his proposed 2014-15 state budget he unveiled at a news conference at the Capitol in Sacramento, Calif., Thursday Jan. 9, 2014. (Rich Pedroncelli / AP)
The deficit for the nation's largest educator-only pension fund is so huge it would cost teachers, local school districts, community colleges and the state budget a combined $4.5 billion a year to bridge. The California State Teachers' Retirement System says it grows by $22 million each day nothing is done.

Brown has no plans to start closing the gap in the fiscal year starting July 1.

Instead, he said he will meet with the key players over the next year to create a plan for long-term solvency. The proposal, which he discussed Thursday as he released his annual budget blueprint, is likely to include higher contributions from teachers whose future pension checks might otherwise be in jeopardy.

The debate "is going to be quite contentious," said Brown, a Democrat who is up for re-election this year.

Unlike other professions, teachers in California do not pay into Social Security and thus do not receive it when they retire, making their CalSTRS pensions particularly vital.

And unlike the California Public Employees' Retirement System, which covers a wide range of state and municipal employees, CalSTRS cannot unilaterally increase the amount it collects from state and local governments. CalSTRS contributions can be increased only if the Legislature votes to do so.

While CalPERS plans to boost contribution levels again next month for the third time in the last two years, the 8 percent that teachers pay into the pension fund from their salaries has not changed since 1972. The 8 percent that school districts pay has not been altered since 1990.

While the state's share can vary slightly, it has hovered at 5.5 percent including an annual cost-of-living adjustment -- about $1.4 billion a year. The state's general fund contribution to CalPERS is projected to top $1.8 billion next fiscal year.

The bulk of the pension funds' revenue comes not from contributions but from investment income. And that also is the cause of CalSTRS' problems.

The dot-com boom led to the fund being fully funded by 1998, but the windfall prompted state lawmakers to increase benefits and decrease the state's contribution. CalSTRS Chief Executive Officer Jack Ehnes said the fund has been seeking an increase ever since the tech market balloon deflated more than a decade ago, but the bottom really dropped out during the Great Recession.

There is general agreement that the gap cannot be bridged by the rebounding economy alone, said Ehnes and Ryan Miller, a CalSTRS analyst with the state's nonpartisan Legislative Analyst's Office.

"There is no silver bullet," Ehnes said.

The Brown administration says the state cannot afford to absorb the full $4.5 billion annual increase because it would overwhelm other budget priorities. Paying $4.5 billion on top of the current $1.4 billion would eclipse state spending for the University of California and California State University systems combined, according to the legislative analyst.

And while we are at it, let's move on the State:

Just when things couldn't be more challenging for California's budget, we are discovering that the shortfall in three major public employee pension funds (CalPERS, CalSTRS and the UC Retirement System) is far worse than expected. According to our analysis, these three funds face a $500 billion shortfall, about six times this year's state budget.

As members of the generation that must face this fiscal burden, we urge that this not become a political tug of war between liberals and conservatives. Instead, the discussion should center on building a sustainable retirement system that honors our commitment to state retirees, but also sets our state on a path to long-term financial stability.

State law affirms that pension benefits are a form of deferred compensation and must be paid. In short, the debts owed to retired state workers are no different from state general obligation debt.

Why does that matter? Retirement funds discount the value of their future liabilities at the expected rate of investment returns (e.g., 7.75 percent for CalPERS). That accounting gimmick grossly understates future liabilities because payments to retirees are guaranteed.


Instead, sound accounting and economic principles require that future liabilities be discounted at what we call a "risk-free" rate, similar to a long-term U.S. Treasury bond.

Using that risk-free rate, combined with the recent market decline, we estimate that California's three largest pension funds face a shortfall of approximately $500 billion.

Our research team also discovered that understating liabilities is only one element of a broader accounting and fund management problem. Public employee pension funds project an expected rate of return on investments, but downplay market volatility and uncertainty.

That means that funds ignore the wide range of possible investment outcomes, including outcomes when investments underperform expectations. For instance, we discovered - irrespective of how we discount future liabilities - that there is a 44 percent chance that CalPERS will be at least $250 billion underwater in the next 16 years. That means the money has to come from somewhere.

Solutions to this mounting crisis require that more money be injected into pension funds today and that funds invest in less risky assets. Contributions should also be made to pension funds on a steady basis, unlike in the past when payments were allowed fluctuate with market conditions.

And despite much opposition, the state should implement a 401(k)-style retirement system for its future hires, which takes the state taxpayers off the hook if the pension funds don't perform well enough to cover promised payouts.

This predicament will not go away; in fact, it will worsen over time unless proactive change begins now. It is a significant problem for taxpayers and state residents, who will see services decline as the state is forced to cover increased pension obligations. We urge fiscal realism and a productive debate focused on implementing the difficult changes, not the politics we can no longer afford.

JUST SO YOU GET IT: THIS IS THE PRESENT SHORTFALL WITH THE STOCK MARKET AT ALL TIMES HIGH, AND WITHOUT INCLUDING FUTURE PENSIONERS. SO TELL ME, HOW DO YOU WANT TO CUT A DEFICIT THAT WITH THE TEACHERS ADDED THAT IS SEVEN TIMES THE ENTIRE CURRENT STATE BUDGET DESPITE HAVING THE HIGHEST TAX IN THE COUNTRY AND MORE TAX REVENUES THAN ANY OTHR STATE. DESPITE A DFICIT THAT IS 7 TIMES THE ANNUAL STATE BUDGET FOR EXISTING PENSIONS. YES, THE PROBLEM MAY GROW LESS WITH LESS PENSIONS FOR FUTRE EMPLOYEES (SO WHAT, ITS ONLY 9 OR 10 TIMES THE TOTAL STATE BUDGET IN THE FUTURE?).,

THE LAST TIME THERE WAS A ANNUAL BUDGET SHORTFALL, IN FELL ON THE PUBLIC SCHOOL AND HIGHER EDUCATION. WHEN THE PENSION PAYMENTS HAVE TO BE MADE, DO YOU THINK ITS GOING TO BE ANY DIFFERENT? YOU CAN BLAME VODOO ECONOMICS, TRICKLE DOWN, OR THE REST OF THE MISSTATED MACROECONOMIC CRAP MENTIONED IN THE POST, BUT NONE OF IT APPLIES TO THE CURRENT SITUATION IN CALIFORNIA. NOR WAS IT THE LACK OF TAX REVENUES OR THE LACK OF TOP INCOMERS PAYING TAXES (MORE ABOUT REVENUES IN THE NEXT POST). IT WAS HORRIBLE GIVE AWAYS BY THE STATE. AND THE VICTIM IN ALL THIS WILL BE PUBLIC EDUCATION UNLESS YOU CAN SHOW ME WHERE THE HUNDREDS OF BILLIONS OF DOLLARS WILL COME FROM. DO YOU REALLY THINK YOU CAN RAISE TAXES IN THIS STATE TEN FOLD (HINT: AT THE HIHGER RATES 9OU END-UP WITH MORE THAN 100%)?

MORE ON WHAT '88 SAID IN ANOTHER POST SINCE NOTHING IN IT HAS ANYTHING TO DO WITH TENURE.
beelzebear
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WHEN THE FREAKIN' ALL CAPS GET WHIPPED OUT, it's time for you guys to get a freakin' room. It'll be bear on bear fun baby!

Only one rule...the libertarian leaning bears get it first, you know pay to play!

Enjoy beotches!
wifeisafurd
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southseasbear;842327528


First, where do you get the authority to believe that [B said:

you speak on behalf of "most taxpayers?" Frankly, everyone is a "taxpayer," since even the poor who do not pay income tax devote a disproportionate amount of their limited funds to a regressive sales tax. So, you think you speak on behalf of most Californians? Or perhaps you mean those in your tax bracket?

CA has approx 38 million of 308 million people in all states, so let's say around 12%.

So to the taxes. My source is the US Census which puts out an annual report on taxes collected by state all in dollars.

Overall: Starting with 2013. CA collected 133 billion. The next state was New York (77 billion), and then Texas with (51 billion). You can do the math, but Cali was by far the largest tax collector on a per capita basis. Its been like that for the last 10 years, except in one year, where New York took the honor.

Income taxes: here is the biggest structural problem in the way CA imposes taxes. It collected 74 billion versus 354 for all states. So about 20% of all income taxes collected were by California meaning CA is far more reliant on income taxes than other states, and therefore prone to business cycles.

Property taxes: CA collected around 2 billion which is about 18% of all property taxes collected and again means Cali is more reliant on property taxes, which also are impacted by business cycles. It also means the attached article (opinion) was BS. When property values in an area decline property tax assessors are obliged to conduct "decline in value reviews" to ensure that the tax assessed value of a property is set at a lower rate than the tax value of the property under Prop 13. When a property is assigned a lower value as the result of such a review, this is known as a "Proposition 8 reduction. According to the CA State Assessor, over 1 million properties have had these reductions since 2010, about half residences. So the article 1% number is just unmitigated BS.

Sales taxes: 48 million collected by CA versus 398 collected by all states, or around 12%, which matches CA's population. I was surprised because CA sales tax rates are among the highest in the nation, but CA also provides a lot of exemptions on items used disproportionately by the poor (e.g. unprepared food) to eliminate the regressive nature of the tax.

Capital is not a "right" book. Its a book by a left leaning economist who finally provides some empirical discussion about income distribution. It notes that there has been worse income inequality than present, agrees that income inequality can occur during times of growth, and certainly doesn't have the same history as '88's post. in fact, the main factor that seems to contribute to income inequality is when rates on capital (net of taxes for those of you who wish to comment about the capital gains tax) exceeds the rate of growth of output and national income (net of taxes). That has nothing to do with the stuff in '88's post, and it puzzling that '88 is reading the book and wonders what I meant (in fairness, I have an economies degree and a MBA). Its a great book at debunking a lot of the myths surrounding income distribution, and conservatives won't like it.

I will discuss the actual post next, but tomorrow. My Republican furdie wife is demanding I watch 24 with her and then go to bed (we are back east so the time is later).
wifeisafurd
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beelzebear;842327585 said:

when the freakin' all caps get whipped out, it's time for you guys to get a freakin' room. It'll be bear on bear fun baby!

Only one rule...the libertarian leaning bears get it first, you know pay to play!

enjoy beotches!


sorry to all libertarians
wifeisafurd
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88Bear;842327542 said:

Well, if the point of your post was to be as condescending and offensive as you could possibly be in what has been relatively respectful posting to this point, kudos!

I find it immediately telling that within your screed, you don't really address the fundamental issue of tenure, or education for that matter, rather you argue against the taxation rate and management of funds in the state of California - as a means of apparently justifying some odd, anti-union sentiment. If you are complaining that the management of PERS and the future of benefits for California civil employees is a problem - agreed. The argument regarding the long-term disposition of pensions in California is worth discussing, but it isn't 'the fault' of unions. I'm wondering if you know how union contracts are determined. Suffice it to say, the union side of 'the Table' does not dictate how pension funds are managed. They bargain for the dollar amount that the State will contribute.

In addition, it is ironic that you chastise the poster for his/her lack of 'homework' but provide zero support for your points. Rather than insult, why not actually attempt to educate if your point is so readily apparent? If you have some actual facts or articles/numbers which explain or detail the subject of reassessment of valuations within the real estate market, I for one am willing to learn. Educate me if you know better. At the same time, I feel extremely confident that your understanding of the state prison system is virtually nil as that is my area of knowledge. The pay and benefits of Correctional Officers is completely peripheral to any REAL numbers when you are talking about the state budget. Any ideas regarding what officers make? How many there are? What a 1% raise costs the state? What their MOU covers?

BTW, I actually have Piketty's book sitting in front of me right now. While I haven't completed it yet, I'm really wondering what part of it even remotely supports your apparent viewpoint? As you rightly point out, his position is FAR left of where you appear to be as income redistribution is an imperative from his point of view.

While it is clear that you were at some level offended by the anti-business/corporate elements within this thread, you have certainly replied in such a way as to ensure offense to those with which you might otherwise have had a productive discussion. If all you were about was demeaning those with a different opinion, then your post simply served to make you look egotistical.

I don't pretend to be anything other than 'adequate' in my limited understanding of economics, but I do understand the math and reality of the past 70 years - the economy of this country, as it pertains to the health of the middle class, has largely mirrored the health of the union movement as a whole. There is evidence that a union presence can have deleterious effects to straight profitability, but I would argue that profit is NOT the sole factor which should be used to determine the economic health of an entity. An economy exists solely to improve the life of its citizens. When the greatest number do not benefit, the economy is not democratic. The most ridiculous conflation that has been foisted upon the American psyche is that democracy and capitalism are synonymous. Nothing could be further from the truth.


I was really ticked off to see your post when I consider what is going to happen to speeding on public education in California, and what you blame for causing the problem. The education is coming in several posts. Again, my apologies on the tone.
88Bear
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wifeisafurd;842327607 said:

I was really ticked off to see your post when I consider what is going to happen to speeding on public education in California, and what you blame for causing the problem. The education is coming in several posts. Again, my apologies on the tone.


I suggest that you reread this thread as I have actually posted very little in the area of funding public education in California. The bulk of my posting has been in the area of union realities. Where have I assigned blame?

In addition, never once did I dispute the realities of the pension problems in this state, I simply said that it was incorrect to blame the unions for the poor management decisions which were made regarding state pensions.

As I admit that I haven't finished the book, I find it odd that you need to mock me over it. Again, strange that you feel the need to criticize someone who has conceded less than perfect understanding of economics for their lack of economic acumen.

That being said, you did not comment on the history of the union movement and its indisputably positive effects on the middle class. Your posts have been full of accusatory rhetoric which has castigated liberalism and unions in general - a position which I frankly feel to be idiotic. While not a 'conservative' under any modern notion of the term, I am relatively conservative in a fiscal sense. I object to any discussion which falsely assigns blanket ideals to individual ideologies which are invariably more complex than the simplistic versions which you seem to assign. I do understand the tendency to overstate when we are angry - something of which, I too, am often guilty.

As for the Piketty book, as I have it, direct me to the portions which support your thesis please. Again, WHERE are you getting that the book doesn't support the history I have laid out (being that I HAVEN'T done so)? The only history I've mentioned is the parallel strength of the union movement and the middle class in the past 70 years.
dajo9
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Funny how Republicans always get hysterical about paying down the deficit when Democrats are President / Governor. Then, when their own are in charge, they fall silent. Hey, Reagan proved deficits don't matter, right Dick Cheney?

I'm all for fiscal responsibility. WIAF, can you tell me what percentage of California's GDP the unfunded pension liability is, applying the same timeframe to both? Honest question, you clearly know more about it than me.
jyamada
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88Bear;842327542 said:

Well, if the point of your post was to be as condescending and offensive as you could possibly be in what has been relatively respectful posting to this point, kudos!

I find it immediately telling that within your screed, you don't really address the fundamental issue of tenure, or education for that matter, rather you argue against the taxation rate and management of funds in the state of California - as a means of apparently justifying some odd, anti-union sentiment. If you are complaining that the management of PERS and the future of benefits for California civil employees is a problem - agreed. The argument regarding the long-term disposition of pensions in California is worth discussing, but it isn't 'the fault' of unions. I'm wondering if you know how union contracts are determined. Suffice it to say, the union side of 'the Table' does not dictate how pension funds are managed. They bargain for the dollar amount that the State will contribute.

In addition, it is ironic that you chastise the poster for his/her lack of 'homework' but provide zero support for your points. Rather than insult, why not actually attempt to educate if your point is so readily apparent? If you have some actual facts or articles/numbers which explain or detail the subject of reassessment of valuations within the real estate market, I for one am willing to learn. Educate me if you know better. At the same time, I feel extremely confident that your understanding of the state prison system is virtually nil as that is my area of knowledge. The pay and benefits of Correctional Officers is completely peripheral to any REAL numbers when you are talking about the state budget. Any ideas regarding what officers make? How many there are? What a 1% raise costs the state? What their MOU covers?

BTW, I actually have Piketty's book sitting in front of me right now. While I haven't completed it yet, I'm really wondering what part of it even remotely supports your apparent viewpoint? As you rightly point out, his position is FAR left of where you appear to be as income redistribution is an imperative from his point of view.

While it is clear that you were at some level offended by the anti-business/corporate elements within this thread, you have certainly replied in such a way as to ensure offense to those with which you might otherwise have had a productive discussion. If all you were about was demeaning those with a different opinion, then your post simply served to make you look egotistical.

I don't pretend to be anything other than 'adequate' in my limited understanding of economics, but I do understand the math and reality of the past 70 years - the economy of this country, as it pertains to the health of the middle class, has largely mirrored the health of the union movement as a whole. There is evidence that a union presence can have deleterious effects to straight profitability, but I would argue that profit is NOT the sole factor which should be used to determine the economic health of an entity. An economy exists solely to improve the life of its citizens. When the greatest number do not benefit, the economy is not democratic. The most ridiculous conflation that has been foisted upon the American psyche is that democracy and capitalism are synonymous. Nothing could be further from the truth.



That's some good stuff, 88bear. You, Southseas and CB are doing a great job in this thread!
southseasbear
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wifeisafurd;842327571 said:

Before I get into the detail, I have not said in any post that I disfavor the tenure system, though I did note that the legislature, with union support, has responded to the court's decision by making it much easier to fire teachers without even saying whether I view this as good or not.

Tenured teachers get laid off in mass when the PUBLIC schools get emasculated. Lets try some recent articles from the Chronicle, since I don't think you know what your talking about when it comes to pension shortfall or have any comprehension of what it means:

Just the teachers:
.
In Gov. Jerry Brown's promise to start paying off California's massive liabilities, the largest single unfunded debt will not be seeing any additional pay-down in the coming fiscal year.

The unfunded liability for teachers' pensions stands at more than $80 billion, a gap so large that the fund is projected to deplete all its assets in about 30 years. It is the largest single component of both the state's unfunded retirement liabilities, which the Department of Finance puts at nearly $218 billion, and of the state's overall $354 billion in long-term obligations.

Gov. Jerry Brown responds to a question concerning his proposed 2014-15 state budget he unveiled at a news conference at the Capitol in Sacramento, Calif.,
Gov. Jerry Brown responds to a question concerning his proposed 2014-15 state budget he unveiled at a news conference at the Capitol in Sacramento, Calif., Thursday Jan. 9, 2014. (Rich Pedroncelli / AP)
The deficit for the nation's largest educator-only pension fund is so huge it would cost teachers, local school districts, community colleges and the state budget a combined $4.5 billion a year to bridge. The California State Teachers' Retirement System says it grows by $22 million each day nothing is done.

Brown has no plans to start closing the gap in the fiscal year starting July 1.

Instead, he said he will meet with the key players over the next year to create a plan for long-term solvency. The proposal, which he discussed Thursday as he released his annual budget blueprint, is likely to include higher contributions from teachers whose future pension checks might otherwise be in jeopardy.

The debate "is going to be quite contentious," said Brown, a Democrat who is up for re-election this year.

Unlike other professions, teachers in California do not pay into Social Security and thus do not receive it when they retire, making their CalSTRS pensions particularly vital.

And unlike the California Public Employees' Retirement System, which covers a wide range of state and municipal employees, CalSTRS cannot unilaterally increase the amount it collects from state and local governments. CalSTRS contributions can be increased only if the Legislature votes to do so.

While CalPERS plans to boost contribution levels again next month for the third time in the last two years, the 8 percent that teachers pay into the pension fund from their salaries has not changed since 1972. The 8 percent that school districts pay has not been altered since 1990.

While the state's share can vary slightly, it has hovered at 5.5 percent including an annual cost-of-living adjustment -- about $1.4 billion a year. The state's general fund contribution to CalPERS is projected to top $1.8 billion next fiscal year.

The bulk of the pension funds' revenue comes not from contributions but from investment income. And that also is the cause of CalSTRS' problems.

The dot-com boom led to the fund being fully funded by 1998, but the windfall prompted state lawmakers to increase benefits and decrease the state's contribution. CalSTRS Chief Executive Officer Jack Ehnes said the fund has been seeking an increase ever since the tech market balloon deflated more than a decade ago, but the bottom really dropped out during the Great Recession.

There is general agreement that the gap cannot be bridged by the rebounding economy alone, said Ehnes and Ryan Miller, a CalSTRS analyst with the state's nonpartisan Legislative Analyst's Office.

"There is no silver bullet," Ehnes said.

The Brown administration says the state cannot afford to absorb the full $4.5 billion annual increase because it would overwhelm other budget priorities. Paying $4.5 billion on top of the current $1.4 billion would eclipse state spending for the University of California and California State University systems combined, according to the legislative analyst.

And while we are at it, let's move on the State:

Just when things couldn't be more challenging for California's budget, we are discovering that the shortfall in three major public employee pension funds (CalPERS, CalSTRS and the UC Retirement System) is far worse than expected. According to our analysis, these three funds face a $500 billion shortfall, about six times this year's state budget.

As members of the generation that must face this fiscal burden, we urge that this not become a political tug of war between liberals and conservatives. Instead, the discussion should center on building a sustainable retirement system that honors our commitment to state retirees, but also sets our state on a path to long-term financial stability.

State law affirms that pension benefits are a form of deferred compensation and must be paid. In short, the debts owed to retired state workers are no different from state general obligation debt.

Why does that matter? Retirement funds discount the value of their future liabilities at the expected rate of investment returns (e.g., 7.75 percent for CalPERS). That accounting gimmick grossly understates future liabilities because payments to retirees are guaranteed.


Instead, sound accounting and economic principles require that future liabilities be discounted at what we call a "risk-free" rate, similar to a long-term U.S. Treasury bond.

Using that risk-free rate, combined with the recent market decline, we estimate that California's three largest pension funds face a shortfall of approximately $500 billion.

Our research team also discovered that understating liabilities is only one element of a broader accounting and fund management problem. Public employee pension funds project an expected rate of return on investments, but downplay market volatility and uncertainty.

That means that funds ignore the wide range of possible investment outcomes, including outcomes when investments underperform expectations. For instance, we discovered - irrespective of how we discount future liabilities - that there is a 44 percent chance that CalPERS will be at least $250 billion underwater in the next 16 years. That means the money has to come from somewhere.

Solutions to this mounting crisis require that more money be injected into pension funds today and that funds invest in less risky assets. Contributions should also be made to pension funds on a steady basis, unlike in the past when payments were allowed fluctuate with market conditions.

And despite much opposition, the state should implement a 401(k)-style retirement system for its future hires, which takes the state taxpayers off the hook if the pension funds don't perform well enough to cover promised payouts.

This predicament will not go away; in fact, it will worsen over time unless proactive change begins now. It is a significant problem for taxpayers and state residents, who will see services decline as the state is forced to cover increased pension obligations. We urge fiscal realism and a productive debate focused on implementing the difficult changes, not the politics we can no longer afford.

JUST SO YOU GET IT: THIS IS THE PRESENT SHORTFALL WITH THE STOCK MARKET AT ALL TIMES HIGH, AND WITHOUT INCLUDING FUTURE PENSIONERS. SO TELL ME, HOW DO YOU WANT TO CUT A DEFICIT THAT WITH THE TEACHERS ADDED THAT IS SEVEN TIMES THE ENTIRE CURRENT STATE BUDGET DESPITE HAVING THE HIGHEST TAX IN THE COUNTRY AND MORE TAX REVENUES THAN ANY OTHR STATE. DESPITE A DFICIT THAT IS 7 TIMES THE ANNUAL STATE BUDGET FOR EXISTING PENSIONS. YES, THE PROBLEM MAY GROW LESS WITH LESS PENSIONS FOR FUTRE EMPLOYEES (SO WHAT, ITS ONLY 9 OR 10 TIMES THE TOTAL STATE BUDGET IN THE FUTURE?).,

THE LAST TIME THERE WAS A ANNUAL BUDGET SHORTFALL, IN FELL ON THE PUBLIC SCHOOL AND HIGHER EDUCATION. WHEN THE PENSION PAYMENTS HAVE TO BE MADE, DO YOU THINK ITS GOING TO BE ANY DIFFERENT? YOU CAN BLAME VODOO ECONOMICS, TRICKLE DOWN, OR THE REST OF THE MISSTATED MACROECONOMIC CRAP MENTIONED IN THE POST, BUT NONE OF IT APPLIES TO THE CURRENT SITUATION IN CALIFORNIA. NOR WAS IT THE LACK OF TAX REVENUES OR THE LACK OF TOP INCOMERS PAYING TAXES (MORE ABOUT REVENUES IN THE NEXT POST). IT WAS HORRIBLE GIVE AWAYS BY THE STATE. AND THE VICTIM IN ALL THIS WILL BE PUBLIC EDUCATION UNLESS YOU CAN SHOW ME WHERE THE HUNDREDS OF BILLIONS OF DOLLARS WILL COME FROM. DO YOU REALLY THINK YOU CAN RAISE TAXES IN THIS STATE TEN FOLD (HINT: AT THE HIHGER RATES 9OU END-UP WITH MORE THAN 100%)?

MORE ON WHAT '88 SAID IN ANOTHER POST SINCE NOTHING IN IT HAS ANYTHING TO DO WITH TENURE.


I don't know how this thread morphed from one about whether teachers should have due process prior to being dismissed (the Vergara case) to the issue of pension, but okay, here goes (quoting liberally from a CTA bargaining advisory:

The pension shortfall is real but not due to unions. The CalSTRS unfunded liability was created primarily by the stock marked downturn of the early 2000's and the Great Recession of 2008 which led to lower than expected investment returns. The occurrence of twin economic declines of such proportions in a single decade is the primary reason CalSTRS faces an approximately $74 billion. Without these events, CalSTRS would likely have been fully funded.
southseasbear
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(continued)

Member contribution rates have been at 8% since 1972, while the 8.25% contributed by employers has remained the same since 1986. The state's contribution to CalSTRS in 1998 was 4.6.07% of payroll. As of 2013-14, the State's contribution rate is 3.041%.

The contributions to CalSTRS are lower than the contributions made to other retirement systems. Moreover, it is important to note that the State's contribution is lower, not higher than before and remains the smallest of the three sources. The majority comes directly out of the teachers' paychecks (8%) or from the employer (8.25%) which is not a gift but a form of delayed compensation.

In order to address the CalSTRS shortfall, the Governor has proposed to increase contributions incrementally over the next few years. Starting in 2014-15 member contributions would increase based on the two tiers (established by the Public Employees' Pension Reform Act [PERPRA]) phased in 3 years (see below for explanation of 2% at 60 and 2% at 62*)
  • from 8% to 10.25% - for 2% at 60 members; or
  • from 8% to 9.21% - for 2%at 62 members; and

employer contributions would increase from 8.25% to 19.1 % phased in 7 years; and
the state's contribution would increase from 3% to 6.3% in 3 years.

* One other reform that has been implemented is PERPRA (AB340) which was passed in September 2012. The pension legislations changed pension benefits for all employees newly hired and new to CalSTRS after January 1, 2013. The passage of PERPRA allowed for new CalSTRS members to have a different set of retirement terms than those who were in the system prior to the passage of PERPRA. Prior to PERPRA, teachers could retire at 60 for a 2% retirement factor (receiving 2% of salary for each year worked) and get a full retirement factor of 2.4% at 63. PERPRA changed the numbers to 2% at 62 and 2.4% at 65. Based on the fact that the newer members (those who have to wait to 62 to get 2%) will have a lesser benefit due to PEPRA, the amount of their increase will be less than the ones who will receive 2% at 60.

These are needed reforms to correct a problem that is not the fault of teachers or employer districts but which will allow the pension fund to be fully funded and thus able to survive another economic downturn.

Other changes have been made. Previously, a teacher could "buy" up to 5 years of "air time" (additional years), but this has been eliminated. Also, teachers could retire as early as 50 if they had 30 years of service, but the minimum age has been increased to 55 regardless of years of service.

I should note, a previous poster repeated the false allegation that teachers work a short period of time and retire with pensions that pay more than their salaries. If a teacher retires at 60 with 30 years of service, he or she will get 60% of salary (2% retirement factor times 30 years = 60). If the teacher waits until 63 to get "full" retirement, he or she will get 79.2% of salary (2.4% times 33 years = 79.2%). Of course, those figures are under the "old" system; newer teachers will have to work longer or have lower pensions.

Finally, while many teachers are in their second profession (coming from private sector) they lose Social Security they earned due to an "offset."
dajo9
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southseasbear;842327656 said:

I don't know how this thread morphed from one about whether teachers should have due process prior to being dismissed (the Vergara case) to the issue of pension, but okay, here goes (quoting liberally from a CTA bargaining advisory:

The pension shortfall is real but not due to unions. The CalSTRS unfunded liability was created primarily by the stock marked downturn of the early 2000's and the Great Recession of 2008 which led to lower than expected investment returns. The occurrence of twin economic declines of such proportions in a single decade is the primary reason CalSTRS faces an approximately $74 billion. Without these events, CalSTRS would likely have been fully funded.


I'm not an expert on the California pension system but this excuse doesn't hold up to scrutiny. All those stock market downturns have been overcome and the stock market is at record levels. If the pension fund has insufficient stock market returns it is due to poor management, not the overall level of the market.
wifeisafurd
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dajo9;842327625 said:

Funny how Republicans always get hysterical about paying down the deficit when Democrats are President / Governor. Then, when their own are in charge, they fall silent. Hey, Reagan proved deficits don't matter, right Dick Cheney?

I'm all for fiscal responsibility. WIAF, can you tell me what percentage of California's GDP the unfunded pension liability is, applying the same timeframe to both? Honest question, you clearly know more about it than me.


I am not a Republican. I did practice tax at a then Big 8 and also was in the tax department at a mega-law firm. I also represented many large governmental entities, including with respect to bond issuances.

We have a huge federal deficit, which can be dealt with because ultimately the federal government can print money and therefore has liquidity through borrowing that is worldwide (e.g., the Chinese buy our debt). That doesn't mean funding the deficit does not come without costs ultimately, but it is something that can be managed. None of this applies to CA. For starters, CA can't operate at deficit by law, which is why the pension liability is off books. By law, you have to show you have the funds to pay off all current obligations, including debt which is currently due. Gov. Arnie dealt with this by postponing the payments by pushing back the timing for same with long term borrowing. Of course if you borrow too much, the next Gov ends up with a problem.

And the problem is that when there is a huge current deficit, the capital market becomes unavailable, and you end up with draconian cuts to higher education in particular, and cuts to K-12 - like what just happened. This is what the pension "crises" (not my wording) is all about. When you have a liability that is predicted to be (when you add local governments) 10 to 15 times annual budgets in future years, and when the current portion of the existing bond debt and pension debt reaches a certain level, you can't borrow, and your choices are a bankruptcy cram down or massive cuts like what happened a few years ago. This isn't just from me, you can ask Governor Brown.

You ask a great question about GDP. Just a technical comment. GSP is the state counterpart to a country's gross domestic product (GDP). The United States Bureau of Economic Analysis (BEA) derives GSP for a state as the sum of the GSP originating in all the industries in the state. The BEA defines GSP, or its value added, as equal to its gross output (sales or receipts and other operating income, commodity taxes, and inventory change) minus its intermediate inputs (consumption of goods and services purchased from other U.S. industries or imported) of CA based companies and individuals. So we have state numbers by GSP. CA's annual GSP is slightly above $2 trillion depending on what source you use (for my money, the bond official statements are the best since investors can sue if the information is materially inaccurate). But I don't think either GDP or GSP is relevant for reasons I will discuss below

The other technical issue is that I can not find the cash flow requirements for the retirement payments anywhere. So I can't give you a direct answer to your question. But I can suggest why the question would be better phrased what percentage of taxable income is the pension overhang over time?

Now GSP is not even close to what is taxable income in California for purposes of income or sales tax. For example, companies are taxed on profit generally, and not gross receipts (that is not true for LLCs). Second, most businesses are taxed on sales where they take place, rather not where product was developed or manufactured (even though CA GSP will increase for these sales) under standard tax formulas that all states accept. So when Facebook sells data about you to an advertising company in New York, California gets credit for the sale from a GSP standpoint, but New York receives the tax on the transaction. Same with just a simple sale by a California manufacturer where their New York sales office takes the sales order from a New York customer. This works the other way as well, for example, when a Tennessee manufacturer (say a car company) sells in California. California may apply sales tax to the transaction, and ask the Tennessee company (assuming it has a "presence" in CA) for its share of the income tax on the transaction.

The problem is that what CA produces often is not taxable. Let's start with tech. There are huge worldwide sale outside of CA that CA can't tax for sales tax purposes. But what about the profits for income tax purposes? The problem is tech companies move their profit outside the country by placing the intellectual property rights in places like Geneva, and then charging huge royalties to their US affiliates. The same could be said for the entertainment business, which also moves its profits off shore. That is why there is such a huge amount of money offshore (a Presidential debate issue), and California businesses are at the forefront is developing these tax havens. The more you increase taxes, the more you incentivize companies to react like this.

But what about taxing individuals more, since they also contribute to GSP? Well according to '88, if people have less money, they consume less and your economy suffers. I don't disagree, but also suggest that a contracting economy caused by California consumers means less California taxes (see my post about how CA taxes above). Unemployment also has the same impact, unless you provide the unemployed with benefits to buy goods. (So consider I made a rant against Congress). California has the highest taxes and tex revenues in the country (again see my post above) and does as a great job, better than any other state, at going after taxable revenue. where it exists. Nevertheless, it often has huge current deficits without the overhang of paying these future obligations.

I can only assume that a good portion of the existing pension deficit will come due sooner, rather than later, as looks at retirees and fully vested pensioners (its 25 years in most governmental entities). Barring super inflation or a bankruptcy cram down of state employee pensions, where is the money coming from? Answer: like before, higher education and the K-12.

Just one edit. CA raises far more taxes than any other state, but is almost last in per capita speeding on K-12 and higher education right now. Why is that? Supply side economics? Is that what makes CA different from all these other states?

Second edit: we have had cities go BK in CA, and they did do cram downs. For example, Riverside no longer contributes to CALPERS (CALPERRS lost in court). I assume, but don't know, that CALPERS still will honor the full pension of the Riverside employees even though those pensions will not be funded. So other cities' taxpayers will be subsidizing Riverside.
OdontoBear66
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dajo9;842327667 said:

I'm not an expert on the California pension system but this excuse doesn't hold up to scrutiny. All those stock market downturns have been overcome and the stock market is at record levels. If the pension fund has insufficient stock market returns it is due to poor management, not the overall level of the market.


+1, but more importantly, why have so many people privately suffered the same downturns, but retired and survived those downturns, albeit with a bit of pain? Union activity and pragmatism rarely cohabit the same space. I also find myself in complete agreement with wifeisafurd's sentiments, whether each fact passes fact check or not. His message summarizes our dllemma.
wifeisafurd
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southseasbear;842327657 said:

(continued)

Member contribution rates have been at 8% since 1972, while the 8.25% contributed by employers has remained the same since 1986. The state's contribution to CalSTRS in 1998 was 4.6.07% of payroll. As of 2013-14, the State's contribution rate is 3.041%.

The contributions to CalSTRS are lower than the contributions made to other retirement systems. Moreover, it is important to note that the State's contribution is lower, not higher than before and remains the smallest of the three sources. The majority comes directly out of the teachers' paychecks (8%) or from the employer (8.25%) which is not a gift but a form of delayed compensation.

In order to address the CalSTRS shortfall, the Governor has proposed to increase contributions incrementally over the next few years. Starting in 2014-15 member contributions would increase based on the two tiers (established by the Public Employees' Pension Reform Act [PERPRA]) phased in 3 years (see below for explanation of 2% at 60 and 2% at 62*)
  • from 8% to 10.25% - for 2% at 60 members; or
  • from 8% to 9.21% - for 2%at 62 members; and

employer contributions would increase from 8.25% to 19.1 % phased in 7 years; and
the state's contribution would increase from 3% to 6.3% in 3 years.

* One other reform that has been implemented is PERPRA (AB340) which was passed in September 2012. The pension legislations changed pension benefits for all employees newly hired and new to CalSTRS after January 1, 2013. The passage of PERPRA allowed for new CalSTRS members to have a different set of retirement terms than those who were in the system prior to the passage of PERPRA. Prior to PERPRA, teachers could retire at 60 for a 2% retirement factor (receiving 2% of salary for each year worked) and get a full retirement factor of 2.4% at 63. PERPRA changed the numbers to 2% at 62 and 2.4% at 65. Based on the fact that the newer members (those who have to wait to 62 to get 2%) will have a lesser benefit due to PEPRA, the amount of their increase will be less than the ones who will receive 2% at 60.

These are needed reforms to correct a problem that is not the fault of teachers or employer districts but which will allow the pension fund to be fully funded and thus able to survive another economic downturn.

Other changes have been made. Previously, a teacher could "buy" up to 5 years of "air time" (additional years), but this has been eliminated. Also, teachers could retire as early as 50 if they had 30 years of service, but the minimum age has been increased to 55 regardless of years of service.

I should note, a previous poster repeated the false allegation that teachers work a short period of time and retire with pensions that pay more than their salaries. If a teacher retires at 60 with 30 years of service, he or she will get 60% of salary (2% retirement factor times 30 years = 60). If the teacher waits until 63 to get "full" retirement, he or she will get 79.2% of salary (2.4% times 33 years = 79.2%). Of course, those figures are under the "old" system; newer teachers will have to work longer or have lower pensions.

Finally, while many teachers are in their second profession (coming from private sector) they lose Social Security they earned due to an "offset."


What you read was just the unfunded amount. That means you have to add the funded amount to realize the full amount of retirement payments this State has been willing to grant some of its employees. So what would the current full obligation be then. In the order of what 30 times the annual State budget? Its not at this level in any other state.

So why would California politicians be willing to grant public employees these unprecedented retirement benefits? Could it be the all the money their unions spend on politicians? Could it be they would be termed out when the impact of this give away hit?

But what I was talking about is the existing deficit, circa now, and not the future or past. Your spin about stock markets doesn't make sense to me in view of current market conditions. All your discussion about reforms doesn't apply to current or retired vested employees, as the State Supreme Court has declared any change in vested benefits is unconstitutional. What you are talking about means that the rate of growth of the deficit will grow at less pace, since the burden is falling on new employees, and with respect to teachers, maybe the state will pay more in if it gets concessions from teachers (see the article I posted about what Gov. Brown wants to do).

Teachers clearly are on a different system than other state employees. For starters, their deficit, is only 80 billion, and is a lot smaller (only 80 billion may not give teachers much comfort, especially when you divide that amount by the numbers of teachers in the State). Most State employees bail in their 50s because they can make the same amount of money (actually the average of their last five years) being retired due to full vesting. Its called the brain drain, and I represent several governmental agencies where this is an issue.

BTW, if the stock market tumbles from its current all time highs, the deficits likely grow considerably more. That is the problem with funding unprecedented retirement benefits with assumptions about growth rates in investments, when the investments are subject to business cycles. If you don't think this will have a perverse impact on our public schools and teachers your hiding you head in the sand. I urge to read the articles again. This is a crises now.
 
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