State, school budget cuts: 100% funding if CAFR billions, trillions disclosed

Our high school principal asked our staff what suggestions we have to address our school and district’s budget cuts. You are welcome to adapt and share my response:

SRVHS budget/$ concerns versus California’s off-budget surplus billions, trillions

Dear Ruth and Social Science colleagues,

At our staff meeting, Ruth spoke of our parents contributing ~$1 million of their own money, and opened conversation for our staff to address our #1 issue of money and improved budgeting. I am willing to contribute a detailed response. I invite you to invest the time to read the following and/or allow me to brief you over a lunch or your conference period (I’m available periods 1-3 this semester), because I can document an existing solution.

As you may know, last April I was one of six international speakers at the Claremont Colleges’ monetary reform conference. We addressed this very topic of decreasing public budgets and increasing debt, and three areas of proven historical solutions. I’ll address one with you now.

This solution is professional economic cost-benefit analyses of California’s off-budget ~$600 billion in surplus taxpayer cash and investments. Professional and public consideration will conclude structural changes would instantly fully fund California’s budget. This $600 billion is disclosed in California’s 2011 Comprehensive Annual Financial Report (CAFR). About $100 billion is in cash, and $500 billion for investments claimed to fund California public pensions. To put this in perspective, our SRVUSD budget cuts are part of California’s budget deficit of $16 billion.

The page numbers with detailed account surpluses for our state’s CAFR are here.

Moreover, the current $27 billion state pension cost only received $1 billion net income from our $500 billion investment fund, with fund managers paid over $2 billion. The good news is that these colossal funds are unknown to the general public, and could be restructured to easily fully fund California’s budget. The great news is that data-sampling of California’s various 14,000 governmental agencies’ CAFRs show a grand total of $8 trillion in surplus taxpayer accounts (Los Angeles County = $66 billion, City of Los Angeles = $38 billion). This data is explained and documented with CAFR page numbers in the bullet points here.

This $8 trillion data-sampled estimate of California’s total taxpayer asset surpluses means that each of California’s ~12 million households has ~$650,000 in government-held surplus accounts. 

I know that this is news to you. What this means is if our district coordinates a political response with other school districts and interested parties, we can have these accounts known to the public and reconsidered to maximize public benefits.

Colleagues: I’m happy to sit down with anyone to explain and point to the documentation of these surplus assets. My suggestion is for a responsible party at the district and/or school board to be briefed by me, verify the data, and initiate a coordinated district response. 

If it helps to consider the value of investigating this data, please recall that I was a leader in an organization (RESULTS) that worked with both Republican and Democratic parties’ leadership for 18 years that led to two UN Summits for heads of state. We were, and still are, the principal proponent for microcredit (topic of the 2006 Nobel Peace Prize). I have worked with policy that literally saves millions of human lives in the extremely complex issue of ending poverty. This history may suggest my capacity to reliably present economic data for professional and public consideration. And that said, as educators of objective facts, the real power of this data is anyone can independently verify its accuracy. I promise that you will easily understand this data when you see it.

Importantly, I am unaware of anyone who has even attempted to refute the existence of the colossal funds revealed in CAFRs. Although I’m a leader of pointing to their existence through alternative media, interested parties have failed to receive any political response. For example, last summer I worked with my two state reps, California State Senator Carol Liu and Assemblyperson Anthony Portantino, to have them to merely confirm the data on the state’s own CAFR and respond to my request for independent professional economic cost-benefit analysis of these funds. After five weeks of my personally briefing several staff members, all I received back was obfuscation and delay that drew even my appreciation for creativity. Both offices chose to officially respond with: “No comment.” They would neither confirm nor refute the data on California’s own published and public financial document!

The final status and summary of my “summer service project” with CAFR is reported here.

In 2009, I worked with California’s Treasurer’s Office and received explanation that these account surpluses can only be addressed by the legislative branch due to their legislated designated structures.

My personal interpretation is that both parties’ leadership do not feel safe admitting to the hidden growth of these massive accounts. Putting myself in their shoes, I empathize with their position of not knowing how to disclose retaining so much taxpayer assets that return so little in public income. Close scrutiny will likely reveal massive embezzlement (peculation is the actual legal term for such acts by public officials).

I also see our current position accurately described by a quote attributed to Gandhi (who Ruth honors with Martin King on her office wall): “First they ignore you. Then they laugh at you. Then they fight you. And then you win.”

You may know that many leading economists now use blogs as their media, including Nobel Prize-winners and the author of our AP Economics text. They have found that corporate media (the “Big Six” corporations) will not accurately cover key economic areas, especially in pointing-out reform. This has certainly been true regarding CAFR data. You may also know that mainstream leaders now acknowledge alternative media sources are often more credible than corporate media, and that public polling show over 2/3 of Americans are “angry” at corporate media for their failure to accurately report on our most important issues.

If you’re curious, the other two areas of reform are public banks that remove need for these 14,000 California agencies to keep “rainy day” funds and provide at-cost credit (think a 2% mortgage and credit card that pays your state taxes by themselves), and national monetary reform to stop creating what we use for money as debt and start creating debt-free money.

Thank you for your investment of time and attention.

Feel free to share this e-mail. I am willing to contribute my time and research for public recognition that our problem already has proven historical solutions.

Carl Herman

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  • Mad Hemingway

    Carl,

    I downloaded the 2011 IL CAFR. It’s about 400 pages. Illinois has been crying poor and using that as an excuse to ditch the state union pensions, gutting social services, and early this month IL followed WI in gutting collective bargaining rights for state unions. Unlike Wisconsin, IL has a Democrat governor.

    In the CAFR, what should I look for to see if IL has the same hidden surpluses as CA?

    Thanks.

    • http://www.facebook.com/people/Carl-Herman/100000930261713 Carl Herman

      Hi MH: the first link of the California CAFR with page numbers of those amounts is a good model to compare with IL. Dems and Reps are the same with the key issues that continue to kill millions, harm billions, and loot trillions: you’re looking at the Left and Right arms of one fascist political entity.

      The biggest numbers will be in the investment accounts claimed to fund pensions. For California, that page also has data of income and expenses for those pensions. Take income, subtract expenses, find the state debt’s interest cost to also subtract, then you’ll have a total return from IL’s comprehensive use of surplus tax dollars. For CA, net income from ~$500 billion was just $1 billion (0.2%).

      It took me a few hours and CAFRs for CA, the County of L.A. and the City of L.A. to see the patterns within them.

    • Geno Kalmes

      please contact Clint Richardson and ask him to help you. He most likely will. And get a few people to donate a few bucks to him if he helps you. He is an investigative reporter on CAFR of the highest integrity.

      http://realitybloger.wordpress.com/?s=wisconsin+cafr&submit=Search

  • terry1956

    Carl, I’ve read some on this first as far back as 2000 maybe 1999 from the reports Walter Burien put out and later a man called Cafr Man.
    CAFR Man died a few years back and its been a few years since I have heard anything from Mr. Burien but both had interesting reports although they looked at the issue from two diffrent angles.
    CaFR man it seems thought its best that the government divest of most of these assets because he thought it was a conflict of interest.
    I tend to agree with that, that is with any government above the county level at least.
    I think Mr Burien had similar ideas as yours in relation to currency issue, I’m more of the Austrian- Hayek private issued competive currency outlook with no monoply but the federal government having a standard such as gold to judge the market value of the private currency issued by banks, credit unions, stores, community groups etc, requring both demand deposits and currency be backed 100% by what ever the issuer said it is backed by marked at the market rate.
    Federal, state, county and local governments would have the authority to investigate and prosecute bank, securities, currency fraud.
    The 4th branch of government juries in the form of citizen grand juries would also have the authority to investgate the above including a judge and DA that refuses to take it any further.
    The federal, state or county grand jury could send the findings to other judges and prosecutors including the findings if any relating to refusal judge and prosecutor.
    Noncontractual currency such as Time Dollars and gifting/ favors should be an exception to the 100% rule etc.

 

 

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