Last October, California Governor Jerry Brown signed into law SB 1234, the California Secure Choice Retirement Savings Program. This has been hailed by progressives as a solution for those workers in the state without retirement savings or programs to provide for their income as they grow older. It forces them to contribute 3% of their income into a state managed retirement program.
With Social Security on the brink of failure by 2030 and incomes increasingly challenged by the part-time job phenomenon it is challenge enough for California’s workers to plan for retirement. With exorbitant energy taxes, a carbon tax and recent tax hikes falling most heavily on the poor, the state has grown ever less competitive as it has grown ever more expensive to live in.
But with the Democrats holding a supermajority in both houses of the legislature they can do anything they please.
The state has arrogated a power unto itself that didn’t exist without consultation or input from the public. And all of this has occurred largely under the radar screen. The newspapers and media have been silent.
The devil is in the details and the details of SB 1234 are vague. How the program is managed, safeguards, etc are all to be worked out later on. But California already has a history of mismanaged pension plans to reflect upon. How will this huge pool of money be different?
The state has been pilfering its existing pension plans to plug the gaps. It has raided gasoline taxes and highway funds. What makes it different this time?
California has the highest gas tax in the country at $0.72/gallon, which just went up 3.5 cents on July 1.With a 9.3% income tax rate that kicks in at $48,029 and a base sales tax of 7.5% rising as high as 10% in some cities and counties. The middle class has become an illusion.
The new retirement program will cost an additional 35% to the income withheld from low wage worker’s wages and will be managed by the same people who have gotten the state into a mess in the first place.
The money grab by government in California has been done by stealth and subterfuge. The state has unsustainable pension obligations for its public worker’s. The unspoken agenda is that the unions and their cronies come first and the rest of us be damned.