California: Retiree with $183,690 Annual Pension Attacks Pension Critics

“Critics of public employee retirement benefits are engaging in hyperbole and pointing to potholes as evidence that millions of elderly Californians should be stripped of their retirement savings.”
Brian Rice, president, Sacramento Area Fire Fighters, Sacramento Bee, June 2, 2015

Notwithstanding the possibility that saying pension reformers want to see “millions of elderly Californians stripped of their retirement savings” is itself “hyperbole,” Brian Rice’s recent Sacramento Bee submission requires a detailed rebuttal. Rice’s piece, entitled “Pensions aren’t being paid at expense of filling potholes,” was in response to a study written by Stephen Eide and released by the Manhattan Institute entitled “California Crowd-Out, How Rising Retirement Benefit Costs Threaten Municipal Services,” published in April 2015.

Rice leads off by attempting to link the Manhattan Institute to the supposedly infamous Koch Bros., despite offering zero evidence that the Koch Brothers contribute to that organization. And, of course, he is relying on this unsubstantiated link to discredit Eide’s work, apparently because if the Koch’s funded the work, then the author had to come up with data and conclusions that fit their agenda, instead of the facts and logic.

We’ll get to facts and logic in a moment, but first it is necessary to consider Brian Rice’s agenda. Because there is virtually no comparison between California’s urban firefighters and the “working class,” “minority, low-income and rural communities,” to whom Rice makes reference in his article, and for whom unions are more legitimately challenged to represent. Brian Rice, who retired in 2011 after 28 years of service, collected a pension in 2013 of $183,690, NOT including other benefits which probably add at least another $10,000 to his total retirement package.

Here’s pension data for Brian Rice. Notice how during retirement his pension still increases each year.

Via: California Political Review

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The Impending California Pension Property Tax Earthquake

The most widespread and persistent folktale about California is that some day the entire state will break away from the North American continent and fall off into the vastness of the Pacific Ocean.  That day may not be too far off if what is unfolding in the growing number of municipal bankruptcy court cases in California plays out to its logical consequence without massive and politically legitimate pension reform.

As reported by urban economist Steven Malanga, municipal bond insurers may lose out in court in their attempt to get bankrupt California cities to reduce pension costs.  This may lead to more than just bondholders getting wiped out and much higher borrowing rate costs across the state.

If the courts uphold pensions as a constitutional right over bondholders’ rights, municipal workers will be entitled to earn more in pensions and health benefits than cities can currently pay.  About 70 to 80 percent of municipal operating costs are allocated to salaries and benefits.  And the lion’s share of salaries and benefit costs go to police and fire protection.  There is little room for large budget cuts in most municipalities.

Some municipalities with pre-existing pension bonds may be able to refinance them without voter approval and shift the explosion in pension costs into long-term debt. Issuing brand new pension bonds would require voter approval. But such cities would have to have enough extra budget cash flow to handle the added debt.

Via: CA Political Review

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