For five weeks I journalistically hammered that California’s Comprehensive Annual Financial Report (CAFR) reveals $600 billion in surplus taxpayer assets, and the various local government agencies’ CAFRs are data-sampled to total $8 trillion in surplus assets.
Last week, the California Parks and Recreation Department was found to be hiding $54 million in assets; more than twice their claimed $22 million budget deficit. This disclosure of fiduciary malfeasance led to the department director’s resignation, and the firing of the second-in-command.
Today, the San Jose Mercury News reports a total of $2.3 billion more was “found” in 500 accounts.
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Let’s summarize what we’ve documented so far about the data of California’s 2011 Comprehensive Annual Financial Report (CAFR) and what it means for the state’s 12 million households (22-minute television interview of my explanation here):
- Officials and corporate media never remind taxpayers, but California holds $600 billion in taxpayer cash and investments ($50,000 non-disclosed assets per household).
- California’s ~14,000 various government entities’ CAFRs have a sampled-data total estimate of $8 trillion in surplus taxpayer assets ($650,000 non-disclosed assets per household). For examples, page 63 of L.A. County’s 2011 CAFR shows $66 billion in cash and investments; page 58 of the City of L.A. CAFR shows $38 billion.
- The state’s $600 billion cash and investment fund is explained as designated for funding state pensions. The CAFR data show the opposite: $27 billion in pension cost receives only $1 billion income from $600 billion in withheld taxpayer assets.
- Californians are taxed $19 billion to pay for pensions (95% of the public cost) while also losing $50,000 in assets the state withholds in cash and investments.
- The $600 billion fund in cash and investments contributed 4% of the state’s $27 billion pension costs, but since 2008 has been “managed” to cost taxpayers more than the net income it produces, in 2011 provided over twice the net income to its investment “managers” than to California’s pensions, and the massive $68 billion increase in “fair value” of stock ownership did not translate to significant pension funding.
- Governor Brown is silent about the $600 billion in surplus cash and investments, claiming the $16 billion budget deficit can only be addressed by austerity – massive funding cuts to our essential infrastructure ($16 billion is a 2.8% divestment of the fund).
So the natural question is if the state’s withholding of $600 billion in our cash and investments does not fund pensions, address a budget deficit, or prevent devastation to infrastructure, how can we best restructure the purpose and use of OUR MONEY for optimal public benefits?
I see three obvious solutions in monetary reform, public credit/banking, and this reform of CAFR-disclosed trillions in surplus taxpayer accounts.