Noll says California's pension problem is the "single biggest public policy issue in California politics today" and one that holds far reaching consequences for the future of government and the economy in California.
"Unfortunately, most California State Legislators even deny that there is a problem with the state's pension system, with less than five of Californias 120 state lawmakers even willing to publicly admit that there is a problem to begin with, let alone a need for a solution. The example of the state's pension problem shows how special interests, namely the state's public employee unions, can run rough shed over the public's interest, do significant harm to the state's business climate, and there is nobody out there that can stop them unless you want to put up millions of dollars to go to the statewide ballot," said David Kersten, president of the Kersten Institute, who is an expert in fiscal issues.
Noll is author or co-author of fourteen books and over three hundred articles and reviews. His primary research interests include technology policy; antitrust, regulation and privatization policies in both advanced and developing economies; and the economic approach to public law.
Noll has also played a prominent roll in California politics over his career, having done research for the California Constitution Revision Commission in the early 1990s and has consulted to state policymakers on many occasions with the goal of improving California government over the long-term.
We discussed several topics that will be featured in upcoming video segments including California regulatory policy, the minimum wage, and structural reform issues but Professor Noll says all of the state's policy problems are dwarfed by the "ticking time bomb" that is the state's pension problem.
He said getting the state's pension systems back on sustainable long-term footing should be the top priority for policymakers at all levels of government.
From an economics perspective, California businesses should worry about the "pension problem" more than the state's regulatory climate or any other issues because it has the potential to "tank" the whole state and local system of government, including its education system, infrastructure programs, and workforce development among other public functions of California government.
"They should get it," Noll said, noting that the business community knows that the pension problem was responsible for destroying the automobile sector before debts and pension plans were restructured. But he still says he is surprised that the California business community has not been more proactive in addressing the state's public employee pension crisis.
Noll said the pension problem is having a negative affect on the ability of state and local governments to fund important infrastructure programs. When asked about the Governor's token appropriation in the January budget of $500 million for infrastructure maintenance, Noll said the state should be paying 5-6 times that or more to build and maintain annual infrastructure.
Stanford University is one of the few academic institutions in California that is willing to challenge the status quo on the pension issue and other important policy issues such as regulatory policy.
Stanford Professor Joshua D. Rauh recently published a major report on the pension issue titled "Hidden Debt, Hidden Deficits: How Pension Promises Are Consuming State And Local Budgets," 11 April 2016, Hoover Institution Essay.
Noll's colleague at SIEPR, economics professor Joe Nation, broke the pension issue back in 2010-11 with a series of reports requested by then Governor Arnold Schwarzenegger (R).
Nation also created the state's first comprehensive pension database, called Pension Tracker (www.pensiontracker.org), which allows citizens and advocates to search for any local government entity in the state and find their total pension liabilities.
For related reports visit:
VIDEO Report: “Stanford University: Preliminary Figures Peg California Pension and Health Care Benefit Debt Crisis at $1.2 Trillion,” Insolvent Film.
“Unsustainable” Increase in “Cost of Government” Best Kept Secret in California Politics.” Insolvent Film. (New Evidence: State of CA figures included)
“California’s $1 trillion bill,” San Francisco Chronicle Editorial, April 3, 2016.