California met its budget deadline, but the state is choosing to delay payment on a massive $85 billion retiree healthcare debt—even as it plans to hand out hundreds of millions in tax breaks to Hollywood. Critics warn it’s another step toward a long-brewing financial disaster.
Key Facts:
- California passed its annual state budget by the June 15 deadline.
- The budget includes a $12 billion spending cut, while offering $750 million in tax credits to the film industry.
- Governor Newsom proposes skipping two years of payments on an $85 billion retiree medical liability.
- Delaying payments adds significant interest and worsens the long-term debt outlook.
- Former Senator John Moorlach repeatedly warned about this growing liability from 2015 to 2020.
The Rest of The Story:
California’s state government passed its budget on time, but a major part of the plan includes putting off payments on retiree health benefits.
The nearly $85 billion liability for state employee medical coverage is already underfunded.
Skipping two years of payments, which Governor Newsom is now pushing, will cause that debt to grow even more due to compounding interest.
This benefit, which most private companies don’t offer, is categorized as “Other Post-Employment Benefits” or OPEB.
Best practice is to pay into it annually through what’s called an “Annual Required Contribution” (ARC).
Failing to do so now means a bigger bill later—and greater risk that the money won’t be there when retirees need it.
Former State Senator John Moorlach, who served from 2015 to 2020, raised concerns year after year.
“We’ve got to get ahead of this mess,” he said, warning that California’s runaway liabilities were unsustainable and would hamstring future budgets.
Commentary:
California’s fiscal mismanagement isn’t new—but it is getting worse.
After two decades of one-party control under radical ideology, the state has become a high-tax, high-debt nightmare.
While the leadership claims to care about equity and sustainability, they continue to pad union perks and Hollywood handouts while ignoring long-term obligations.
Skipping an $85 billion payment isn’t just bad budgeting—it’s reckless.
These retiree healthcare benefits are promises made to workers.
Failing to fund them now puts future generations on the hook and risks a massive shortfall when it’s too late to fix it.
Meanwhile, Sacramento hands out $750 million a year to Hollywood, an industry already riddled with elite privilege and out-of-touch politics.
This isn’t just tone-deaf—it’s corrupt.
Regular Californians struggling with high taxes, failing schools, and rampant crime don’t benefit from these backroom deals.
The state’s growing debts are a direct result of ignoring the basics of responsible governance.
Instead of saving in boom years or paying down liabilities, California blew through surpluses to expand programs, bloat bureaucracy, and reward political allies.
Warnings like Moorlach’s went ignored.
Add in massive spending on benefits for illegal immigrants, and the picture becomes clear.
California’s resources are being drained by misguided priorities and a refusal to face financial reality.
The woke fantasy has produced a harsh economic truth.
Once a beacon of opportunity and innovation, California is now a cautionary tale.
Residents and businesses are leaving in record numbers, taking their tax dollars and talents with them.
Forest fires burn, streets crumble, and budgets explode—but the state’s leaders continue to double down on failed ideas.
This isn’t just bad policy.
It’s a betrayal of future Californians.
And the next governor will inherit a debt-ridden disaster created by years of denial and dysfunction.
The Bottom Line:
California is choosing short-term optics over long-term stability by delaying $85 billion in payments on retiree health benefits.
At the same time, it’s offering generous tax breaks to Hollywood.
Years of mismanagement, political cronyism, and ideological excess have turned a once-thriving state into a debt-ridden mess.
And the bill is still coming due.
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