EDITOR: Oil companies love California (Evan’s oil-tax bill faces many obstacles,” March 10). We are the only oil-producing state that doesn’t tax oil as it leaves the ground. Alaska, Texas, North Dakota and others have taxes of as much as 25 percent at the well. California’s fees, levies and royalties are a pittance.
How did the oil companies get such a sweetheart deal? Campaign contributions and gifts to our state Assembly members, senators and governor, of course. Legalized bribery, i.e., corruption. No solution is too small to be trumped by corruption.
Without massive campaign finance reform, the United States is an oligarchy with some personal freedom thrown in to placate.
EDITOR: Lisa Maldonado and Tom Popenuck are well intentioned but do not understand pension finance (“Chuck Reed’s pension cuts bad for everyone,” Close to Home, March 10).
CalPERS’ average pension is $31,000 with a retirement of 55, compared to Social Security’s average of $15,000 at 66. Pension funds were not “doing just fine” prior to 2008. Sonoma and Marin counties respectively owed $450 million and $240 million in pension bonds and unfunded liabilities in 2007.
CalPERS’ fund did crash in 2008 because it invests in risky assets that are ill-matched to its stable liabilities. CalPERS assets are back to 2007 levels but liabilities have grown by about a third. So its funding ratio has worsened.
CalPERS has increased government contributions by 50 percent to fix dangerously low funding levels. CalSTRS needs at least $4.5 billion more annually from the state.
CalPERS had a good year in 2013, but since 2001 it has cumulatively earned 4.6 percent annually against a target of 7.5 percent.
Two-thirds of CalPERS’ income is expected to come from investment returns. This means it is a highly leveraged and risky plan.