[akchin]

This might be unpopular, but California is a great example of a place where taxes are high, but it is not spent well. I remember looking at this a few years back, and although the state claims that 2/3 of state tax dollars goes towards education, a lot of it is supporting pensions and benefits of previous generation employees and teachers. While this is admirable, it essentially takes money away from today's generation for unsustainable promises made by unions and political leaders in the 80s and 90s. CA already has one of the highest marginal tax rates in the US of 9.5%, so it is understandable the woman does not want to pay more.

For schooling, Prop 13 is an even bigger issue. Even though property taxes are high for new buyers, schools are underfunded. Parents essentially are paying higher taxes in the form of fundraising to support science and other enrichment classes, which cannot be supported by the state. There were somewhat noble ideas behind Prop 13, but essentially what we have in California, is that newer residents of Californa bear a disproportionate amount of the burden.

[x0x0]

While I'm with you on prop 13, we combine high income taxes with exceptionally low property taxes for long term property holders. Again, if we want nice things, we have to pay for them.

As for pensions, you say unsustainable promises, I say stealing from people who took cash later instead of cash immediately. Consider your last boss deciding to reach into your checking account and take $40k out because the business retroactively decided they overpaid.

According to this http://www.usgovernmentspending.com/year_spending_2016CAbs_1... pensions are 36.9/208.2 = 18% of the state budget.

[bradleyjg]

The point is that the politicians back then stole from the future. If they were going to promise cash in the future the should have set aside money back then to pay for it.

It's one thing when a government borrows money to pay for a capital project that will last long after they are out of office. The net present value of an accruing pension is an operating cost and should be paid for as the obligation is incurred.

[maxerickson]

It's possible to be unhappy with underfunded pensions and also think it would be unfair to change them retroactively.

[gozur88]

>As for pensions, you say unsustainable promises, I say stealing from people who took cash later instead of cash immediately.

This is really an accounting problem. In California, at least, changes to the pension system weren't reflected in the current budget as future obligations.

So for many years city and state controllers dealt with union demands by "off the books borrowing" in the form of more lavish pensions. City and state pensions really are unnecessarily lavish, and the reason is voters never realized what obligations they were being asked to shoulder.

[specialist]

"...a lot of it is supporting pensions and benefits of previous generation employees and teachers. While this is admirable..."

It's contract law. No admirable necessary.

Pensions etc are negotiated as part of the compensation package. Those former employees earned that money. It's not an entitlement, or charity.

Legitimate complaints would be gaming the pension system and chronic underfunding (kicking the can down the road).

[twoodfin]

They earned a promise from the government. That's not the same thing as earning the money, as many state and municipal employees will doubtless discover over the next few decades.

[eru]

Yes. The government should have been made to put that money aside when they promised it. (Or at least to keep the commitment honestly on their books, instead of hiding it.)

[twoodfin]

What you're describing is a defined-contribution pension plan (like a 401(k) or an IRA) rather than a defined-benefit pension plan.

As I understand it, public employee unions have not been big fans of defined-contribution, preferring the more generous promises. That is a risk that both the union and the government take together.

[eru]

You can still make it a defined-benefit plan. A defined benefit plan should be easy for the government to budget for---the benefits to be paid out are very easy to forecast. (And in essence equivalent to a bond, or perhaps annuity.)

[twoodfin]

"Budget" is the operative word there: Controlling the expenditure of tax dollars is one of the fundamental things elected officials do in a democracy. Thus current governments can't ever truly bind future ones.

Unless the money is in an account with your name on it, what you have is a political promise, not a contractual obligation or an asset.