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Schwarzenegger Abandons Idea For CalPers Loan

September 18, 2010

Governor Schwarzenegger’s idea to borrow two billion dollars from CalPers has been abandoned according to a recent sac bee article. The loan would help the state of California offset its nineteen billion dollars budget shortfall. CalPers officials expressed concern over the plan, whether it was fiscally responsible and whether it was even affordable for the state due to its current bond rating. Not to mention how the state employees feel about the plan. Ultimately it would be the CalPers board who would vote on such a plan on board member is the State Controller John Chiang who the Governor has sued several times over the payment of state employee wages. This plan is very unpopular with state worker who have heard for the last several years how mismanaged CalPers has been and how much money CalPers has lost and now the Governor wants to borrow money from this mismanaged organization? Many state workers are wondering if it’s not the state finances that are mismanaged and not CalPers. Many people are saying that yes CalPers went down with the rest of the market but this article in the LA Times points out that in the last  year CalPers has generated an 11.4 percent return on their investments. This beats the target of 7.75% that the fund expects to earn and saves taxpayers money as it covers the unfunded liabilities of state worker retirements.

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One Comment
  1. makes me want to drink alchoholic beverages

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