Local and state governments have been spending freely on other things, too. The point is that pensions are only ONE small part of the puzzle. In the case of California, pension contributions represent approximately 3-5% of the state’s expenditures. On a local level, it’s quite a bit higher, though it still varies greatly, depending on the location (high RE prices/taxes, vibrant economy with higher income and sales taxes).

Some local agencies will be in a particularly bad spot because the communities they serve present a double whammy for them: low taxes (property, sales, and income) and a much higher public service burden. These are communities where the houses cost less or where more of the homes are owned by old-timers or landlords who are paying the old Prop 13 taxes, so the property taxes are lower. They also tend to have lower income taxes, where applicable, and lower sales taxes if the community, in general, is poor and there’s not enough high-end commercial RE to boost sales tax revenues. It’s these communities that will also tend to have a much higher crime problem, requiring more cops, often at a higher cost than in more affluent communities (because most cops will move to a nicer area, all else being equal).

And their fire departments will require more personnel and more equipment because these communities will have more crime victims, overdoses, and more patients who will call 911 for medical care vs. going to a doctor and utilizing preventative care measures, etc. They will also have more buildings that have been illegally altered and added onto…resulting in more fires, etc.

It’s a pickle for the govt leaders who try to “do the right thing” by their constituents by providing the necessary services, while also trying to manage a smaller and more volatile budget, as revenues and spending in these communities tend to be affected more by general economic trends than agencies in more affluent areas are.