Next Up!

According to the state pension retirement fund, CalPERS, in 2001 there were 2 workers for each state retiree. Today, that is 1.3 workers, and in the near future (10-20 years) there will have 6/10 of a worker. Obviously, the numbers do not work out.
An LA Times article on the next candidate to declare bankruptcy identifies the 110,000 populated Bay Area city of Richmond, California. The city has already cut its city workforce by 20%, its streets are returning to their natural state, and its is even cutting library books. The city’s bond rating is at a junk bond status, and the residents rejected a new tax increase. 

The average income of the city residents is $55,000 but the average city worker averages $92,000. The police and firefighter average income in the city is $137,000.

By 2021, pensions will consume 41% of the city’s annual budget. Bankruptcy is in the offing, and there is no relief in sight. Richmond will join four other California entities, Vallejo, Stockton, San Bernardino and Mammoth Lakes in bankruptcy, but other cities are in equally bad shape. Four cities in California are in similar shape with Richmond, and the state itself has more than a $100 billion unfounded pension deficit.

The description of California as an economic landmine with beautiful coastline, is accurate.

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