You’ve got to love our Governor. Out of one side of his mouth, he wants to reduce gasoline consumption in the state. Out of the other side of his mouth, he wants to tax gasoline consumption with a per gallon tax in order to repair roads (whose maintenance he neglected). Also see MOORLACH UPDATE — SB 1 — March 9, 2017 march 9, 2017 john moorlach.
As for the state budget, out of one side of his mouth he claims that a recession is coming and that major cuts are on the horizon. Out of the other side of his mouth, he wants to deposit $6 billion into CalPERS, right before this anticipated market downturn. Boy, isn’t this double talker lucky that he is out of office in a few months?
Yesterday, I followed through with my comments from Saturday’s UPDATE (see MOORLACH UPDATE — Addressing Pension Mess — June 24, 2017 june 24, 2017 john moorlach). However, we did not hear AB 100 in Committee. We heard SB 84, the Senate equivalent, on the Senate Floor. The debate is covered in the first piece below by Associated Press, which is on the KCRA website, among others. For the video of my Floor speech, see https://youtu.be/PyCXpupgNag.
“I’m not an immediate ’No.’ I’m a ’Yes — but,’“ Moorlach said. ”Let’s get the details and see if it make sense.“
After seeing the details, asking the questions, being unimpressed by the responses, and offering improvements, to no avail, I voted against SB 84, which barely passed.
Last Friday I enjoyed an annual tradition of being the Master of Ceremonies for the Daily Pilot’s Hall of Fame. The Daily Pilot covers it on their website in the second piece below. Congratulations to all of the recipients!
California lawmakers advance pension borrowing plan
Story by Associated Press writer Jonathan J. Cooper
SACRAMENTO, Calif. (AP) —
California lawmakers on Monday approved a plan to borrow $6 billion from a state savings account to pay down massive debt in the nation’s largest public-employee retirement program.
The Senate sent the measure to Gov. Jerry Brown despite concerns from some lawmakers that it could be risky to borrow money and invest it through the California Public Employees’ Retirement System.
CalPERS’ $325 billion investment fund, the largest public-employee pension fund in the country, has enough money to cover only about two-thirds of the benefits promised to retired public employees. The CalPERS board has steadily increased mandatory contribution rates for the state, cities, counties and school districts to make up for the shortfall. The state’s share of the unfunded liability is estimated to be $59 billion, with its minimum payment forecast to increase from $5.8 billion this year to $11.2 billion in 2031.
Brown in May proposed borrowing money to pay down that debt, saying the state can lend from its own short-term investment account and earn a higher return through the more aggressive investments at CalPERS. He said the proposal would save $11 billion over 20 years through lower annual pension costs.
Money borrowed from the short-term account, known as the Surplus Money Investment Fund, would be repaid with interest using money from Proposition 2, which was approved by voters in 2014 and requires the state to spend a portion of revenue paying down debts.
Republican Sen. John Moorlach of Costa Mesa said he likes the idea of prepaying retirement costs and even joined Democratic Treasurer John Chiang in writing a newspaper editorial supporting the plan. But he voted against it Monday, citing Brown’s repeated warnings that a recession is inevitable.
"If that’s the case, we will have put $6 billion into the retirement system at the most inopportune time," Moorlach said. "That is my concern, that we invest at the top of the market."
CalPERS has struggled to hit its own investment target, which is phasing down to 7 percent per year. Last year, the fund earned 0.61 percent, down from 2.4 percent the prior year.
Democratic Sen. Steve Glazer of Orinda said the idea may have merit but lawmakers should wait until it’s been more thoroughly studied.
"A few months of analysis in a public setting so everybody can hear, not in a back room, can only be a healthy thing for us to ensure this is the right course to take," Glazer said.
H.D. Palmer, a spokesman for Brown’s Finance Department, said the proposal was carefully developed with insight from lawmakers and Chiang, who has a legal obligation to responsibly oversee the state’s investments.
"We’ve fully disclosed all of the potential risks and inherent benefits it entails, and we are convinced that it’s a sound and prudent step to take," Palmer said.
The measure was approved in a 24-13 vote with support mostly from Democrats.
8 honored at Daily Pilot community service luncheon
By Bradley Zint
Eight community members were honored Friday at the ninth annual Daily Pilot Community Service Hall of Fame Luncheon.
The event at American Legion Post No. 291 in Newport Beach recognized members of Newport Beach and Costa Mesa service clubs. State Sen. John Moorlach (R-Costa Mesa) was master of ceremonies.
- Peter Nevins of Costa Mesa Kiwanis
- Ross Minion of Newport Beach Sunrise Rotary
- Bob Kelly of Rotary Club of Newport-Balboa
- George Lesley of the Exchange Club of Newport Harbor
- Barbara Hayward of the Harbor-Mesa Lions Club
- Dr. Brigide Daily of Soroptimist International of Newport Harbor Area
- Joel Carlson of the Kiwanis Club Newport Beach-Corona del Mar
- Bea Foster of the American Legion Yacht Club and American Legion Auxiliary Unit 291
This e-mail has been sent by California State Senator John M. W. Moorlach, 37th District.
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