6 Key Measures of California's Fiscal Health 2017-18

Monday, January 9, 2017

Senator Moorlach's Notes on Analyzing the Governor's 2017-18 Budget Proposal

1. California's Net Financial Position

California’s “net” financial position is a $169 billion deficit ($4,375 per person) according to the most recent Comprehensive Annual Financial Report (CAFR).

This figure should be positive for healthy organizations.  It is derived by tallying the state government’s assets (monetary funds, investments, buildings, roadways, bridges, parks, etc.) and subtracting its obligations. The last positive position California had was during Governor Pete Wilson’s final term where the state had $1.5 billion in net assets.

California is now ranked the worst state, below Illinois, whose net position is a negative $143 billion, or $11,174 per person. Illinois’ finances are so bad, they’re telling lottery winners that they have to delay their payments.

Deferred maintenance for the state’s roads and highways is some $59 billion.

2. Estimates of California Unfunded Pension Liabilities

CalPERS:                  $ 114.5 billion

CalSTRS:                  $   76.2 billion

UC Pensions (UCR):  $   12.1 billion

NOTE: For the 2015/16 fiscal year, CalPERS planned for a 7.5% rate of return, but only managed a 0.6% rate of return

A lower rate means the pension system anticipates earning less on investments and consequently will need more from employer contributions.

3. Current Unfunded Retiree Medical Liability

California has the nation’s highest unfunded retiree medical liability at $74.1 billion.

4. California's Transportation Infrastructure

5. California's Business & Economic Competitiveness

6. Pension Crisis is the Elephant in the Room


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