California Dreaming

A politically created crisis of epic proportions is brewing in California and elsewhere across the United States. For decades, public pension officials and politicians of both parties have promised their employees increasingly generous retirement benefits—while low-balling the contributions from government agencies and employees that are needed to cover these promises—presenting our greatest financial challenge since the Great Depression. Pushing the pension liability from today and onto our children and grandchildren leaves them with a depleted future and a potentially bankrupt California. State and local governments will scramble to find funds, forcing them to raise taxes, slash public services, and/or declare bankruptcy. Schools, parks, emergency services, and public-employee retirement benefits will be at risk. Politicians will defer until circumstances force them to reckon with a disaster of their own making. The problem? For far too long, state and local governments have promised their employees increasingly generous retirement benefits—but without ensuring that sufficient funds will be on hand when the pension payments come due. In California Dreaming, Lawrence J. McQuillan pulls back the curtains covering this unfunded liability crisis. He describes the true extent of the problem, explains the critical factors that are driving public pension debt sky-high, and exposes the perverse incentives of lawmakers and pension officials that reward them for not fixing the problem and letting it escalate. Finally, he offers the six crucial reforms needed to restore the financial health of California and other threatened jurisdictions. If California Dreaming’s roadmap for reform is adopted, the prospects for achieving a thriving, balanced and equitable future are highly favorable in California and any state or municipality facing its own public pension problem. If not, the many opportunities that once made the Golden State seem like a Promised Land will quickly evaporate.