California Common Sense has created a visualization that shows the data gathered and analyzed by Joe Nation (Stanford Institute for Economics and Policy Research) and Evan Storms (Stanford Junior and California Common Sense researcher). Below, learn what the visualization shows and feel free to share these images online or in media coverage.
The first visualization shows on the left San Jose’s expenditures, revenue, and projected pension expenditures assuming a 6.2 percent discount rate. On the right is the projected deficit. (http://beta.cacs.org/visualization/1530). See here:
This screenshot shows that assuming a 6.2% rate of return, San Jose retirement expenditures will exceed $304 million, roughly 30 percent of the city’s budget. Compared to revenue projections, this means the city will face a $200 million deficit, which is only expected to grow under the current pension system.
Using this visualization, it is also possible to ‘construct your own solution’ by changing tax rates, contribution rates, and cutting employees. For example, see a screenshot of the scenario below:
Here, we project the impact of 10 percent increases in the business tax, property tax, sales tax, and state funding. We also increase contribution rates by 10 percent and cut the number of employees by 10 percent. Despite each of these drastic changes, many of which are politically infeasible, the city’s deficit is projected to exceed $80 million. This means that core programs will almost certainly continue to be cut, given that even major increases in revenue cannot prevent the city from facing major deficits.Use the visualization to explore other potential solutions, but one thing is clear: this problem is large and needs to be addressed as soon as possible.