By Dan Walters, Sacramento Bee | California’s rapidly growing public employee retirement costs weigh heavily on the 2017-18 state budget now being fashioned, but their impact is only partially revealed in budget documents.
Gov. Jerry Brown’s proposed budget does tell us that the state has $205.9 billion in “unfunded liabilities” for pensions and health care for state and University of California employees and adds, “These retirement liabilities have grown by $51 billion in the last year alone due to poor investment returns and the adoption of more realistic assumptions about future earnings.”
The budget also reveals that the state’s mandatory “contributions” to the California Public Employees’ Retirement System “are on track to nearly double from $5.8 billion … in 2017-18 to $9.2 billion … in 2023-24.”
However, it doesn’t add a very necessary caveat – that the projection is based on CalPERS hitting an investment earnings benchmark which is probably too high after years of “poor investment returns.”
In other words, the state would be very fortunate if it was paying out only $9.2 billion in 2023-24.