ALEC in The Orange County Register: Fossil Fuel Divestment Spells Crisis for Pensioners and Taxpayers
Lawmakers in Sacramento should avoid politically motivated investment decisions and learn from other states that have kept pension funds solvent and tax burdens low.
ALEC Vice President of Policy Lee Schalk and Research Manager Thomas Savidge penned an op-ed in The Orange County Register on Sacramento’s latest war on fossil fuels.
If the Fossil Fuel Divestment Act (Senate Bill 1173) becomes law, CalPERS and CalSTRS will join the University of California and Cal State University pension systems in fully divesting from fossil fuels. They will also be prohibited from making new investments in fossil fuel companies.
Unfortunately, this is likely to cost CalPERS and CalSTRs hundreds of millions of dollars, exacerbating the state’s problem of unfunded pension liabilities, which now total more than $1.5 trillion according to a new report from the American Legislative Exchange Council (ALEC).
In the annual Unaccountable and Unaffordable report, ALEC uses more prudent and conservative assumptions to calculate total unfunded liabilities. At $1.5 trillion, California is higher than any other state and up $145 billion since last year’s report. The nationwide total for all 50 states is more than $8.2 trillion.