Autumn Carter

Autumn Carter

Autumn Carter is the Executive Director of California Common Sense, a nonpartisan non-profit research organization dedicated to making California’s government accessible to its citizens.

The debate about California’s Propositions 30 and 38 has zeroed in on what has become the crux of a much larger (and unsettled) debate – the state of education in the Golden State.  Beginning with discussion of Californians’ existing tax burden, the debate transitioned quickly to student and teacher performance in the classroom. Naturally, number-spinning has been full force as each side offers competing measures of California’s K-12 performance compared to other states’.

Both Prop 30 (sponsored by California Gov. Jerry Brown) and Prop 38 (sponsored by Pasadena attorney/activist Molly Munger) propose tax increases for Californians. Proponents of both ballot measures say that the new revenue will go to classrooms, thereby helping to improve K-12 performance. That, in turn, has sparked a debate over how best to measure educational performance and whether increased funding leads to improved performance.

(Brown’s initiative (details here) would raise $5-$7 billion a years, for five years, by raising the state’s sales tax and income taxes on the state’s wealthiest residents. Munger’s proposal (details here) would increase income taxes on all but the state’s poorest residents, giving an estimated $10 billion annually to schools.)

A recent debate on the Stanford campus underscores the rivalry between the competing measures. Pro-30 Don Dawson of the California Teachers Association and pro-38 Carol Kocivar of the California State PTA argued that each of their propositions would restore funding to California’s underfunded and woefully underperforming classrooms. Kocivar repeatedly invoked a 2012 Education Week study that ranked California 47th in per-pupil spending. “We’re funding our schools at 47th in the nation. We’re in the basement. The philosophical premise [of Prop 38] is that we cannot continue to do this. We cannot continue to deny an entire generation of children the education they deserve,” said Kocivar.

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When it comes to pension funding, Californians should be able to get a straight answer to the following question: How much have the state and municipal governments promised to pay California public employees upon their retirements?

However, pension plan administrators, researchers, and politicians offer wildly different answers.

Why? Here’s a primer:

Defined Benefit Plans

First, there’s an inherent level of uncertainty surrounding the amount a given retiree will receive in pension payments, and thus how much the government needs to set aside today to pay all retirees later (the total liability).

California’s government employers generally offer defined benefit pensions plans, meaning that they promise to pay each retiree a certain amount each month for the rest of the retiree’s life. Variable retirement ages (governments often incentivize early retirement) and rising life expectancy rates make it difficult for even one entity to nail down an accurate estimate of how long an individual will receive pension payments, and thus how much the government will pay out overall.

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