Surveying California’s Unfunded Retiree Healthcare Obligations
By Adam Tatum on Apr 3, 2014Under the Government Accounting Standards Board (GASB) statements No. 43 and 45, many municipalities began reporting liabilities associated with their other post-employment benefits (OPEBs).[i] OPEBs include any non-pension retirement benefit, but mainly include healthcare benefits. Typically, when public employees retire, they receive these healthcare benefits for the rest of their lives, or until they are eligible for Medicare (see Appendix A for background). These newly updated figures reveal billions of dollars in chronically underfunded OPEB liabilities. Despite that fact, OPEBs have not received nearly the same scrutiny or sense of urgency as their pension benefit counterparts.
Bay Area cities need more police, not higher pay for them
By Madhu Ravi on Mar 14, 2014Though the Bay Area is home to four of the nation's 10 highest-paid regions for public safety officers, the number of officers is declining in every major city. The math behind this trend really is quite simple: With limited budgets and higher demand for police services, cities can either employ fewer officers and pay more for overtime work, or cities can hire more officers and pay less for overtime.
CalSTRS at a crossroads
By Adam Tatum on Jan 27, 2014CalSTRS provides pension benefits to nearly 900,000 beneficiaries. To ensure that money is available to pay for future benefits, the system accumulates contributions into a trust fund. Officially, CalSTRS has only 63% of the assets it needs to provide current and future retirement benefits, leaving the system with an $80.4 billion funding shortfall (market value). Currently, that unfunded liability grows $22 million each day lawmakers forgo a solution.
Impact of 2013 Food Benefits Cuts in the State of California
By Alina Figaro on Dec 3, 2013Approximately 47 million Americans receive food stamp supplements from the federal government. Federal food stamp spending increased from $15 billion in 2001 to $80 billion this year as millions of Americans became eligible for the program during the economic downturn. Through the 2009 American Recovery and Reinvestment Act (aka the 2009 federal stimulus), Congress increased food stamp funding by nearly 14% to provide additional resources during the recession. On November 1, the higher stimulus funding levels expired, including those for the food stamp program. As the program’s funding returns to pre-stimulus levels, collectively, states will lose $5 billion in food stamp benefits by 2014. Because food costs have risen more significantly in California than many other states, the state’s $457 million decrease in program funding will have more impact.
Optimistic California surplus forecasts ignore existing challenges
By Autumn Carter on Nov 27, 2013Apparently, all is well in California. However, politicos and average citizens probably disagree on that point. Last week, a report by the California Legislative Analyst’s Office said we should expect annual budget surpluses through 2019-20, including nearly $10 billion surpluses each year starting in 2017-18. Essentially, based on tenuous predictions that have traditionally missed the mark, the LAO is arguing that California’s fiscal troubles are over. Nothing could be further from the truth.
Oakland in Review: Can it Break Free of its Troubles and Set a Steadier Course?
By Madhu Ravi on Nov 20, 2013Oakland, CA, a city known for vibrant culture, history, and industry, has been plagued by a number of problems in recent years. Oakland has ranked among the nation’s most dangerous cities (its violent crime rate is more than triple the national average), is often cited as a potential candidate for bankruptcy, has a crumbling transportation infrastructure, and is still recovering from the Great Recession. To counter these issues, Oakland has taken on debt to maintain solvency, cut expenses with layoffs and furloughs, and pursued a more informed, data-driven approach to policing crime. Moving forward, as debt and city service cuts continue to strain the city’s budgets, they will also make confronting the city’s challenges increasingly difficult.
The First Month of the Affordable Care Act Health Exchanges
By Adam Tatum on Nov 14, 2013This week, the U.S. Department of Health and Human Services released the initial data outlining the number of individuals who have enrolled in health insurance plans through these exchanges during the first month of open enrollment. According to the official figures, 106,185 individuals have enrolled in (but not necessarily paid for) a health plan through the exchanges nationwide between October 1 and November 2. This total represents only 1.5% of the 7 million individuals the Congressional Budget Office projected will enroll by the end of the open enrollment period (March 31, 2013).
How are Rising Health Costs Impacting Family Budgets?
By Adam Tatum on Nov 7, 2013In 2012, 55% of Americans received healthcare through employer-sponsored health insurance. The Milliman Medical Index (MMI), which tracks the annual cost of healthcare for a typical family of four, was $22,030 in 2013. This 117% increase is more than twice the $10,168 cost for a typical family of four’s healthcare in 2003, just a decade ago. By comparison, from 2003 to 2013, the U.S. average price for a gallon of gas rose from $1.60 to $3.62 (+126%), the average cost of public four-year college tuition rose from $4,098 to $8,646 (111% increase), and the average cost of food for a family-of-four has grown from $757 to $1,032 (36% increase).[v] All of these categories have grown faster than the median income for a family of four over the last decade, which grew from $64,374 to $79,728 (+24%).
How Does a $100 Ticket Become a $500 Ticket?
By Autumn Carter on Oct 31, 2013When rising costs exert pressure on government budgets, it is not unusual for citizens to pay higher fees and fines to provide additional revenue. In California, rising traffic violation fines reflect this trend. Statewide, running a red light for the first time results in a $100 traffic ticket. These days, however, a $100 ticket actually amounts to nearly $500.
Navigating California’s Minimum Wage Changes
By Madhu Ravi on Oct 23, 2013Governor Jerry Brown signed a bill into law that will increase California's minimum wage from $8/hr to $10/hr by 2016. In 2012, among the nation’s 75.3 million hourly paid workers, 3.6 million (4.7%) were paid at or below the federal minimum nationally. In California, 1.4% of its 127,000 hourly paid workers earn the minimum wage. At $10/hr, California's minimum wage would be the nation's highest statewide minimum and place the state's wage above a traditional $8/hr ceiling that has prevailed over the last three decades.