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November 18, 2005
Victory over pension bonds
Last year California's leaders made the absurd decision to float bonds to pay for obiligated payments into the state pension fund. Yes, borrowing to pay operating costs--in this case for pension investments. Kinda like using your credit card to pay for buying stocks. This stupidity is widespread at the state and local level in recent years (see here).
Today the Pacific Legal Foundation announced the courts invalidated the bonds because the state consitution requires a public vote for large bond issues, and Gov. Schwarzenegger tried to skirt around that. The court did not call bullshit on the idea of pension bonds themselves--not their purview.
The court ruling here.
The pension bond item in the 2005 California budget here.
Hat tip to PensionTsunami.com.
PLF's press release
Pacific Legal Foundation
November 17, 2005Court Invalidates California State Pension Bonds
Government Borrowing Scheme Violates State ConstitutionSACRAMENTO -- The Pacific Legal Foundation (PLF) announced today that
a Sacramento judge has struck down more than half-a-billion dollars in
pension bonds that California lawmakers included in the 2005 state
budget. The court ruled in response to a legal challenge brought by
PLF on behalf of the Fullerton Association of Concerned Taxpayers
(FACT).At issue were "pension obligation bonds" intended to help cover the
state's contribution to the public-employee pension system for 2005.
When the bond plan was first unveiled late last year, it was for
nearly $1 billion. After PLF and FACT filed their legal challenge, the
state reduced the proposed bond amount to about $550 million.PLF argued that the pension bonds violate Article XVI, Section 1, of the
California Constitution, which forbids state borrowing in excess of
$300,000 without a vote of the people. Judge Raymond M. Cadei of the
Sacramento County Superior Court agreed, ruling: "The statutes
authorizing the present bonds, and the present bonds themselves, are
therefore invalid under Article 16, Section 1.""This decision is a victory for all Californians against spendthrift
practices in the state legislature," said Pacific Legal Foundation
attorney Harold Johnson. "Today's court ruling should make it clear to
lawmakers that they can't run California on credit cards.""This is a huge win for California's future," said Fullerton businessman
Thomas Babcock, president of FACT. "California lawmakers can no longer
get away with borrowing billions on the backs of our children because
they lack the fiscal discipline to live within their means.""The case also highlights the spiraling cost of public pensions in
California," added PLF's Johnson. "The state's annual payment to the
public employee retirement system has ballooned from about $160 million
five years ago to more than $2.6 billion this year."The state contribution to the pension system is an ordinary, ongoing
cost of government, a yearly line-item in the budget. With the bonds,
the state proposed to borrow money over 20 years to pay part of the
pension contribution for 2005."That's like a homeowner getting a 20-year bank loan to cover a single
mortgage payment, or a car buyer putting a single car payment on a
credit card," said Johnson. "It amounts to reckless reliance on debt,
and if the state had gotten away with it this time, the precedent could
have encouraged more and more borrowing to pay a larger and larger share
of the costs of government."PLF brought another legal challenge on behalf of FACT in 2003,
challenging the proposed $11 billion in "deficit-reduction bonds"
enacted under former Gov. Gray Davis without voter approval. PLF's legal
challenge prompted state officials to shift course and introduce
Proposition 57, an alternative deficit-bond plan that was
constitutionally valid because it was submitted to voters and received
their approval.
Posted by adrianm at November 18, 2005 10:15 AM
I haven't been up to anything these days. So it goes. I can't be bothered with anything these days.
Comment by: Sten8754 at January 7, 2007 07:01 PM
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I can't be bothered with anything these days, but such is life. I don't care. So it goes. More or less nothing seems worth thinking about. I've just been hanging out waiting for something to happen, but that's how it is.
Comment by: Sten10833 at January 8, 2007 06:10 PM
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I've just been hanging out not getting anything done. What can I say? I've basically been doing nothing worth mentioning, but pfft. Not that it matters. Pretty much nothing exciting happening to speak of. I haven't been up to much these days.
Comment by: Sten49698 at January 10, 2007 03:19 AM
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I just don't have anything to say , but shrug. So it goes. Not much on my mind recently. I can't be bothered with anything recently.
Comment by: Sten39594 at January 10, 2007 09:16 PM
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I've just been hanging out not getting anything done. What can I say? I've basically been doing nothing worth mentioning, but pfft. Not that it matters. Pretty much nothing exciting happening to speak of. I haven't been up to much these days.
Comment by: Sten94353 at January 14, 2007 06:53 AM
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I haven't gotten anything done recently. I've just been hanging out doing nothing. I haven't been up to anything these days, but it's not important. Today was a total loss.
Comment by: Sten79359 at January 18, 2007 05:56 PM
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My mind is like a bunch of nothing, but I guess it doesn't bother me. I haven't been up to anything recently. I've pretty much been doing nothing to speak of.
Comment by: Sten50127 at January 26, 2007 07:02 PM
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I haven't been up to anything today. I don't care. I've just been staying at home not getting anything done. Basically not much happening right now. Maybe tomorrow. I guess it doesn't bother me.
Comment by: Sten34703 at January 28, 2007 10:35 AM
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I feel like a complete blank, but I don't care. Pfft. I've pretty much been doing nothing worth mentioning.
Comment by: Sten91448 at January 28, 2007 07:55 PM
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I haven't been up to much today. I've just been letting everything happen without me. Basically nothing seems worth bothering with. I've just been hanging out doing nothing. I just don't have anything to say right now. More or less nothing happening.
Comment by: Sten58387 at January 29, 2007 01:00 AM
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I just don't have much to say these days, but so it goes. Today was a total loss. I guess it doesn't bother me.
Comment by: Sten73626 at January 29, 2007 01:30 AM
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I've just been staying at home waiting for something to happen. Whatever. Not much on my mind lately. I guess it doesn't bother me.
Comment by: Sten32373 at January 29, 2007 04:04 PM
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I've just been staying at home waiting for something to happen. Whatever. Not much on my mind lately. I guess it doesn't bother me.
Comment by: Sten32373 at January 29, 2007 04:04 PM
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I haven't been up to anything these days. So it goes. I can't be bothered with anything these days.
Comment by: Sten54515 at January 30, 2007 12:29 AM
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I've just been staying at home not getting anything done. I've basically been doing nothing worth mentioning. My life's been pretty unremarkable these days. Eh.
Comment by: Sten55767 at January 30, 2007 02:01 AM
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I haven't gotten anything done today. I feel like a fog, but what can I say? I've just been letting everything wash over me lately, not that it matters. Shrug.
Comment by: Sten80064 at January 30, 2007 07:39 AM
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I haven't gotten anything done today. I feel like a fog, but what can I say? I've just been letting everything wash over me lately, not that it matters. Shrug.
Comment by: Sten41911 at January 30, 2007 03:16 PM
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I haven't been up to much these days. Today was a loss. Nothing seems important. I've just been letting everything happen without me these days.
Comment by: Sten68638 at January 31, 2007 03:49 AM
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I can't be bothered with anything these days, but shrug. I just don't have anything to say recently. I haven't gotten much done recently. Nothing seems worth thinking about.
Comment by: Sten8874 at January 31, 2007 09:41 AM
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I haven't been up to anything recently, but so it goes. Such is life. What can I say? Pretty much not much exciting going on to speak of. I haven't gotten much done lately, but I don't care.
Comment by: Sten80250 at January 31, 2007 02:34 PM
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I haven't been up to anything recently, but so it goes. Such is life. What can I say? Pretty much not much exciting going on to speak of. I haven't gotten much done lately, but I don't care.
Comment by: Sten63691 at January 31, 2007 07:38 PM
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I haven't gotten anything done recently. I've just been hanging out doing nothing. I haven't been up to anything these days, but it's not important. Today was a total loss.
Comment by: Sten70985 at February 1, 2007 12:15 AM
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Comment by: Sten27668 at February 1, 2007 03:50 AM
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I haven't been up to anything recently, but so it goes. Such is life. What can I say? Pretty much not much exciting going on to speak of. I haven't gotten much done lately, but I don't care.
Comment by: Sten42734 at February 1, 2007 05:28 AM
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My life's been pretty dull recently. Shrug. My mind is like a void. I haven't gotten anything done lately. I can't be bothered with anything recently.
Comment by: Sten72887 at February 1, 2007 08:17 AM
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I just don't have anything to say. Not that it matters. Eh. I've just been staying at home doing nothing, but I don't care. That's how it is.
Comment by: Sten13859 at February 2, 2007 03:39 AM
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I haven't gotten anything done recently. I've just been hanging out doing nothing. I haven't been up to anything these days, but it's not important. Today was a total loss.
Comment by: Sten91740 at February 2, 2007 12:03 PM
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My life's been basically bland today. More or less nothing seems worth thinking about. My mind is like an empty room. I've more or less been doing nothing to speak of. Not much on my mind recently.
Comment by: Sten16879 at February 2, 2007 02:41 PM
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Basically nothing seems worth thinking about. I haven't been up to much these days. I just don't have much to say right now. I can't be bothered with anything , but whatever.
Comment by: Sten63539 at February 3, 2007 12:23 AM
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I just don't have anything to say. Not that it matters. Eh. I've just been staying at home doing nothing, but I don't care. That's how it is.
Comment by: Sten6845 at February 3, 2007 01:12 AM
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I haven't been up to anything today. I don't care. I've just been staying at home not getting anything done. Basically not much happening right now. Maybe tomorrow. I guess it doesn't bother me.
Comment by: Sten24055 at February 3, 2007 05:41 AM
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Basically nothing noteworthy happening right now, but eh. Today was a complete loss. I haven't been up to much recently. I've pretty much been doing nothing worth mentioning.
Comment by: Sten20478 at February 3, 2007 04:58 PM
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I've just been hanging out not getting anything done. What can I say? I've basically been doing nothing worth mentioning, but pfft. Not that it matters. Pretty much nothing exciting happening to speak of. I haven't been up to much these days.
Comment by: Sten10760 at February 4, 2007 02:09 AM
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I haven't gotten anything done today. I feel like a fog, but what can I say? I've just been letting everything wash over me lately, not that it matters. Shrug.
Comment by: Sten22327 at February 5, 2007 04:25 PM
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Not much on my mind these days, but what can I say? It's not important. I just don't have much to say lately. I've just been letting everything pass me by recently, but eh.
Comment by: Sten22570 at February 5, 2007 07:05 PM
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Not much on my mind these days, but what can I say? It's not important. I just don't have much to say lately. I've just been letting everything pass me by recently, but eh.
Comment by: Sten58693 at February 6, 2007 03:25 AM
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I haven't been up to anything recently, but so it goes. Such is life. What can I say? Pretty much not much exciting going on to speak of. I haven't gotten much done lately, but I don't care.
Comment by: Sten68297 at February 6, 2007 07:49 AM
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