Category: Articles & Op-Eds

What Accrual Accounting Would Have Exposed, Part II

In response to my last post (What Accrual Accounting Would Have Exposed, Part I), a journalist asked if California was not already employing accrual accounting of the type I describe. The short answer is “no.” The accrual basis form of…

Further to “More Truthiness From CalSTRS’s CEO”

Further to my “truthiness” post about CalSTRS’s latest annual report, see here for a wonderful counter-example published this weekend. Among other things, notice how Berkshire’s CEO reports the all-important measure of book value from the most recent fiscal year that…

What Accrual Accounting Would’ve Exposed

Nothing has the power of accrual accounting to unmask and curtail reckless fiscal behavior by elected officials. As one example, accrual could’ve stopped the largest non-voter-approved debt issuance in California history. That happened in 1999, when legislation proposing a retroactive…

More Truthiness From CalSTRS’s CEO

In 2005 Stephen Colbert coined the word “truthiness” to describe “truths we want to exist.” His invention was timely because at that moment I was contending with truthiness as practiced by the California State Teachers Retirement System (CalSTRS), to whose…

Jerry Brown’s Excellent Budget — At Least On a Cash Basis

Last week Governor Jerry Brown continued his steady stewardship of state finances by proposing a budget for the 2016–17 fiscal year that restrains spending despite hefty projected revenue growth. Brown once again reminded observers that healthy revenues today are likely…

Steep Drop in CalPERS Funded Ratio, 1995–2015

A reader of a recent post asks the following: “On page 100 of its 2015 annual report, CalPERS notes with approval that it earned a 20-year investment return of 7.76%, exceeding its 7.50% investment return assumption. Did that healthy investment…

Update: CA’s FY2015 Pension Liability

Annual reports just issued by California’s two largest public pension funds indicate that the state added roughly $24 billion of unfunded public pension liability in fiscal year 2015. In December, California’s two principal pension funds, CalPERS and CalSTRS, posted online…

Donors Should Ask Candidates About Vergara and Pensions

Candidates for state office are pressing hard for year-end contributions. Before you donate, press them about two recent events: Without fanfare, California’s public schools quietly reported $9 billion of new pension debt over the last year, as explained here. Unless…

Flash: California Issues $9 Billion in Debt

Did you know that California just issued $9 billion in debt? There wasn’t a press release— in fact, the announcement was buried on page seven of a report quietly posted on a website — even though this debt is larger than 95%…

Before You Contribute To A Candidate…

California’s next governor won’t take office for more than three years. Still, Lt. Governor Gavin Newsom has already declared his candidacy and at least four others (John Chiang, Tom Steyer, Antonio Villaraigosa and Steve Westly) are rumored to be considering…