March 27, 2008
Should we sell our home and pay $300,000 Capital Gain when our neighbor, a current surviving spouse, doesn’t pay any taxes?
30 Years of Prop 13 with no end in sight My wife and I raised our five children here in Santa Clara County, California. There were close to 25 children on this street of 10 homes that dead-ends into a culdesac. Our children and their friends played a modified game of baseball in the front yard until they got big enough to break windows. Read the rest of this entry »
March 14, 2008
Collision Course between Private Sector and Government Employee Pensions
Thirty years after the passage of Prop 13, state, local government, and school employee pensions, (Calpers and Calstrs), cover some 3,476,650 people, the vast majority of public employees. The cost of these plans appears to be on a collision course with the private sector’s ability to pay. In the year 2003-2004, the average annual salary paid to Calpers members was $46,124. The private sector was $35,219. Benefits paid statewide to retirees from these plans were $20.1 Billion. Total state tax revenue was $37.7 Billion. While the funding sources are different, the comparative magnitudes are alarming. Pensions can amount to 100% of their highest salary at age 55 after 30 years of service for life. The payouts are so high early, they become an incentive to terminate and move on leaving the city basically with one employee for the cost of two. The private sector cannot afford defined benefit plans for life. The Vallejo proposed bankruptcy is the first of many if the public employees don’t reduce their demands. Read the rest of this entry »