California Gov. Arnold Schwarzenegger backed off a proposal to borrow $2 billion from CalPERS to help balance a state budget now almost three months overdue.
“Any idea to borrow money from the CalPERS pension fund is off the table,” Mr. Schwarzenegger said in a statement late Thursday. “The Legislature must pass a budget that lets us live within our means, and includes the necessary reforms to fix our broken budget process and rein in out-of-control pension costs.”
Anne Stausboll, CEO of the $205.5 billion California Public Employees' Retirement System, Sacramento, said this week there had been informal discussions with Mr. Schwarzenegger's department of finance on crediting the state with $2 billion this year, an idea floated by the administration to help balance the budget.
The $2 billion would have been an advance on the roughly $74 billion Mr. Schwarzenegger estimates the state would save during the next 30 years from his proposals to roll back pension benefits for government workers.