As part of Governor Newsom's Budget release today, similar to his 2019-20 budget, the Governor is proposing making an additional payment towards the State’s share of the $250.6 billion unfunded pension liabilities in the California Public Employees’ Retirement System (CalPERS). The Governor has proposed making an additional $1.1 billion in payments above their normal costs in an effort to save money for the State in future years. What does this mean for special district? Well, not too much. The additional investments from the State will do nothing to reduce unfunded liabilities for anyone other than the State. However, the additional dollars will reduce drawdown on the fund to pay liabilities. The reduced drawdown allows for greater investment, which in turn, has the potential to increase returns. Increased returns reduce annual payment increases. So, in this case, while special districts will not see a direct benefit, any increased contributions from the state will have some benefit to the CalPERS system as a whole. For more information on the Governor’s budget visit the Department of Finance budget website at http://www.ebudget.ca.gov/.