Issue link: http://educator.cta.org/i/214242
Policy the state's youth, retirees are a direct boost to their local economy through everyday purchases at supermarkets, restaurants, department stores, automotive services, and ultimately as taxpayers and homeowners." The study measures the impact that CalSTRS benefit payments have on California's labor income, employment, economic output and tax revenues. The findings are based on $9.2 billion in ongoing monthly and quarterly benefit payments that CalSTRS issued during the 2011-12 fiscal year, taking into account both the direct impact from expenditures and indirect, induced effects resulting from the members' initial spending of their benefits. (See map.) The benefit payments are a substantial economic driver in all areas of California. "Retiree spending is even more impactful in rural areas, where it often generates more than 1 percent of the total gross regional product," says Jeffrey Michael, director of UOP's Business Forecasting Center and a professor in the university's Eberhardt School of Business. In fact, statewide employment supported by retired educators was similar in size to the entire nonprofit sector in California. The impact on total labor income is comparable to the state's online direct sales sector. In addition, the study notes that of the $2.4 billion the state contributes annually to CalSTRS, state and local governments receive a 50 cent return on each dollar via taxes. The study shows that the spending: • upports 92,815 jobs throughout the S state. • enerates $4.4 billion in total labor G income. • reates $1.2 billion in tax payments C to state and local governments through income, sales and corporate profit taxes. You can download the study at www.cta.org/calstrsimpact. What's this? Pensions attacked! Proposed ballot measure changes constitution to cut retirement benefits of current, future workers of firefighters, police officers and school employees are likely to muster forces against a proposed statewide pension-cutting initiative filed in midOctober by San Jose Mayor Chuck Reed. Although there is no guarantee that the "Pension Reform Act of 2014" will be on next year's ballot, the measure, if passed, would change the state constitution to permit state and local government employers to cut retirement benefits of current and future workers. "We will be carefully reviewing the proposal to consider policy and legal issues, but we already have major concerns with what appears to be another effort by corporate reformers to eliminate public pensions," says CTA President Dean E. Vogel. "That is a nonstarter." One section of the proposal appears to have a particularly significant impact on the California State Teachers' Retirement System (CalSTRS). The proposal specifies that if a pension system has a shortfall, a "stabilization plan" would C TA A N D A B R O A D C O A L I T I O N be triggered leaving most pension systems unable to plan for solvency without massive costs to employees and employers. In other words, the proposal mandates unrealistic costs that will leave no alternative but to eliminate the pension plan. "If that's the case, we will once again join firefighters, police officers and other school employees in a massive campaign to defeat it, as we've done previously," Vogel says. Voters are not interested in cutting retirement benefits of public employees, according to a recent survey released by pollster David Metz. Polling shows that 63 percent of those surveyed oppose allowing public employers to unilaterally cut retirement benefits for current employees. A majority favor solving pension issues at the local level, through bargaining rather than ballot measures. At press time, the proposed initiative was under review by the Political Involvement Committee of CTA's State Council of Education. Reprinted with permission from the Frying Pan News - fryingpannews.org. NOVEMBER 201 3 Educator 11 Nov 2013 v2.1 int.indd 37 Advocacy www.cta.org 37 11/13/13 6:31 PM